Accounting

Accounting is an art of recording, classifying, summarizing, reporting and interpreting in term of money is called accounting.

Accounting is Practice and knowledge of concerned organization starting with methods for recording transactions, keeping financial records, performing internal audits, reporting and analyzing financial information to the management, and advising on taxation matters.

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It is a systematic process of recording, classifying, summarizing, interpreting and communicating financial information. It shows profit or loss for a given period of time of particular year, the value of the firm and nature of a firm's assets, liabilities and Capital (owners' equity).

Accounting provides information about the resources available to a firm,

and finance employed to those resources, and the results achieved through the use of resources.

Advantages of Accounting

Objective of Accounting

Limitation of Accounting

Accounting Qualifications

Accounting Transaction

Accounting Equation

Natural Resources

A site accquired for the purpose of extracting or removing some valueable resource such as oil, minerals, or timber is classified as natural resources. The term Depletion is used like depreciation for natural resources.

Depreciation

The process of allocating the cost of fixed asset over its estimated useful life is called depreciation.

Buildings, machinery, equipment, furniture, fixtures, computers, outside lighting, parking heaps, cars, and trucks ar samples of assets which will last for quite one year, however won't last indefinitely. throughout every accounting amount (year, quarter, month, etc.) some of the value of those assets is getting used up. The portion getting used up is reportable as Depreciation Expense on the statement. In impact depreciation is that the transfer of some of the asset's price from the record to the statement throughout every year of the asset's life.

The calculation and coverage of depreciation is predicated upon 2 accounting principles:

 price principle. This principle needs that the Depreciation Expense reportable on the statement, and therefore the quality quantity that's reportable on the record, ought to be supported the historical (original) price of the quality. (The amounts mustn't be supported the value to switch the quality, or on this value of the quality, etc.)
    Matching principle. This principle needs that the quality's price be allotted to Depreciation Expense over the lifetime of the asset. In impact the value of the quality is split up with a number of the value being reportable on every of the financial gain statements issued throughout the lifetime of the quality. By assignment some of the asset's price to numerous financial gain statements, the businessperson is matching some of the quality's price with every amount within which the asset is employed. Hopefully this conjointly implies that the quality's price is being matched with the revenues attained by mistreatment the asset.

There ar many depreciation ways allowed for achieving the matching principle. The depreciation ways may be sorted into 2 categories: straight-line depreciation and accelerated depreciation.

The assets mentioned on top of ar typically stated as mounted assets, plant assets, depreciable assets, made assets, and property, plant and instrumentality. it's necessary to notice that the quality land isn't depreciated, as a result of land is assumed to last indefinitely.

Loading /Surplus

The difference between cost price and invoice price of goods sent of consignment is called loading.

Depreciation

The process of allocating the cost of fixed asset over its estimated useful life is called depreciation.

The major causes of depreciation area unit as follows:

1. Wear And Tear wear and tear discuss with a decline within the efficiency of plus owing to its constant use. once an asset losses its efficiency, its worth goes down and depreciation arises. this is often true just in case of tangible assets like plant and machinery, building, furniture, tools and equipment utilized in the plant.

2. Effusion of your time the worth of asset might decrease due to the passage of your time though it's not in use. There area unit some intangible fixed assets like copyright, patent right, and lease hold premises that decrease its value as time elapse.

3. Exhaustion an asset might loss its value due to exhaustion too. this is often the case with wasting assets like mines, quarries, oil-wells and forest-stand. On account of continuous extraction, a stage can return wherever mines and oil-wells get fully exhausted.

4. obsolescence Changes in fashion area unit external factors that area unit responsible for throwing out of assets though those are in physical fitness. for instance black and white televisions became obsolete with the introduction of color TVs, the users have discarded black and white TVs though they're in good condition. like loss on account of recent invention or modified fashions is termed as obsolescence.

Value of unsold stock

Value of unsold stock = cost price of closing stock + Proportionate of non-Recurring expenses (consignor & Consignee)

Value of unsold stock = = (Cost of goods sold+Proportionate of all expenses/Total Quantity) X unsold stock