Fundamentals of Accounting Concepts and Methods

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Accounting

Meaning

  1. Recording
  2. Classifying
  3. Reporting
  4. Financials
  5. Stakeholders

Nature

  1. Systematic
  2. Structured
  3. Standardized
  4. Accurate
  5. Reliable

Concept

  1. Accrual
  2. Matching
  3. Materiality
  4. Consistency
  5. Comparability

Purpose

  1. Information
  2. Decision
  3. Resource
  4. Allocation
  5. Stewardship

Scope

  1. Financial
  2. Statements
  3. Balance
  4. Income
  5. Cashflow

Users and Types

Users

  1. Investors
  2. Creditors
  3. Management
  4. Employees
  5. Regulators

Need

  1. Information
  2. Decision
  3. Resource
  4. Allocation
  5. Stewardship

Nature of Information

  1. Internal
  2. External
  3. Financial
  4. Non-financial
  5. Strategic

Concept of Stakeholder Focus

  1. Stakeholder
  2. Decision
  3. Resource
  4. Allocation
  5. Stewardship

Importance Criteria

  1. Accurate
  2. Reliable
  3. Timely
  4. Relevant
  5. Consistent

Accounting Process

Steps

  1. Identification
  2. Recording
  3. Classification
  4. Reporting
  5. Analysis

Nature of Process

  1. Systematic
  2. Cyclical
  3. Accurate
  4. Reliable
  5. Consistent

Core Concepts

  1. Accrual
  2. Matching
  3. Materiality
  4. Consistency
  5. Comparability

Process Objectives

  1. Information
  2. Decision
  3. Resource
  4. Allocation
  5. Stewardship

Key Qualities

  1. Accurate
  2. Reliable
  3. Timely
  4. Relevant
  5. Consistent

Single Entry System

Meaning

  1. Simple
  2. Incomplete
  3. Limited
  4. Cash-based
  5. Non-standardized

Nature

  1. Incomplete
  2. Limited
  3. Non-standardized
  4. Non-comparable
  5. Non-reliable

Concept Basis

  1. Cash
  2. Accounting
  3. Non-accrual
  4. Non-matching
  5. Non-materiality

Advantages

  1. Simple
  2. Easy
  3. Low-cost
  4. Quick
  5. Basic

Limitations

  1. Incomplete
  2. Limited
  3. Non-standardized
  4. Non-comparable
  5. Non-reliable

Double Entry System

Meaning

  1. Complete
  2. Accurate
  3. Reliable
  4. Standardized
  5. Comparable

Nature

  1. Complete
  2. Accurate
  3. Reliable
  4. Standardized
  5. Comparable

Core Concepts

  1. Accrual
  2. Matching
  3. Materiality
  4. Consistency
  5. Comparability

Advantages

  1. Accurate
  2. Reliable
  3. Standardized
  4. Comparable
  5. Comprehensive

Key Principles

  1. Debit
  2. Credit
  3. Equality
  4. Balance
  5. Harmony

Accounting Principles

Meaning

  1. Assumptions
  2. Concepts
  3. Guidelines
  4. Standards
  5. Framework

Nature

  1. Universal
  2. Consistent
  3. Standardized
  4. Comparable
  5. Reliable

Fundamental Concepts

  1. Accrual
  2. Matching
  3. Materiality
  4. Consistency
  5. Comparability

Underlying Assumptions

  1. Accounting
  2. Entity
  3. Going
  4. Concern
  5. Monetary (Corrected from M1tary)

Objectives

  1. Information
  2. Decision
  3. Resource
  4. Allocation
  5. Stewardship

The Journal

Meaning

  1. Recording
  2. Transactions
  3. Chronological
  4. Temporary
  5. Auxiliary

Nature

  1. Temporary
  2. Auxiliary
  3. Recording
  4. Classifying
  5. Reporting

Concept

  1. Recording
  2. Transactions
  3. Chronological
  4. Accurate
  5. Reliable

Purpose

  1. Record
  2. Classify
  3. Report
  4. Analyze
  5. Verify

Entries

  1. Debit
  2. Credit
  3. Transaction
  4. Event
  5. Adjustment

The Ledger

Meaning

  1. Accounts
  2. Balances
  3. Classification
  4. Summarization
  5. Reporting

Need

  1. Classification
  2. Summarization
  3. Reporting
  4. Analysis
  5. Decision

Importance

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journal accounting consistency financial reporting matching principle accounting process single entry debit materiality stakeholders ledger financial statements accrual concept double entry bookkeeping comparability