Lesson-1: Basic Concepts of Accounting image description here
What is Financial Accounting ?
Daily Record of Financial Transactions
To prepare information regarding financial affairs of
Individual
Business
Why is Financial Accounting needed?
Individual
Business
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Wants to know
To assist person in decision making related to business
Performance of Business
What is Transactions?
DEFINITION
Any dealing b/w 2 persons involving
Money
Valuable thing
EXPLAINATION
Human beings are social animals and are bound to adopt community living style.
Living in community means
He therefore DEPENDS ON OTHER people for his needs, IN RETURN to PROVIDING others with some of THEIR.
DEPENDENT on each other to fulfill their needs.
Every person CANNOT FULFILL all his NEEDS like food, clothing, housing etc.
It means that one will fulfill his needs from others and will provide others the things of their need in return.
People INTERACT with people
Every instance, where one 'gives something' to 'get something' is called Transaction.
How Accounting developed?
In early times, GOODS were BARTERED or EXCHANGED.
But when the CONCEPT of MONEY was introduced, it became a little more DIFFICULT.
All development arises due to the needs of human beings.