Accounting is often called the language of business. Every business activity (buying goods, selling goods, paying salary, taking a loan) creates a financial effect. Accounting is the system that records these effects in an orderly way and provides useful information to different users for decision making.
At a basic level, accounting answers:
This chapter builds the foundation: meaning of accounting, objectives, users, key accounting principles/concepts, and the accounting cycle (step-by-step process of accounting).
Accounting is the process of identifying, recording, classifying, summarising, and communicating financial information of a business to interested users.
Important points:
Main objectives:
Users are broadly:
So, bookkeeping is a part of accounting.
Common branches:
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Objectives of accounting (any four):
Thus, accounting helps both performance measurement and decision support.
Users of accounting information (any four) with examples:
Hence, accounting reports serve both internal and external decision makers.
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Accounting is often called the language of business. Every business activity (buying goods, selling goods, paying salary, taking a loan) creates a financial effect. Accounting is the system that records these effects in an orderly way and provides useful information to different users for decision making.
At a basic level, accounting answers:
This chapter builds the foundation: meaning of accounting, objectives, users, key accounting principles/concepts, and the accounting cycle (step-by-step process of accounting).
Accounting is the process of identifying, recording, classifying, summarising, and communicating financial information of a business to interested users.
Important points:
Main objectives:
Users are broadly:
So, bookkeeping is a part of accounting.
Common branches:
Accounting principles are basic rules and guidelines followed to prepare accounts.
Many standards consider these as basic assumptions:
These assumptions make financial statements comparable and meaningful.
GAAP refers to commonly accepted accounting rules used to prepare and present financial statements.
Purpose:
Accounting cycle is the step-by-step process used to record and summarize transactions for a period.
Typical steps:
Main idea: from transaction → records → summaries → financial statements.
Transactions → Journal → Ledger → Trial Balance → Adjustments → Final Accounts → Closing
If these notes helped you, a quick review supports the project and helps more students find it.
Meaning: Accounting cycle is the step-by-step process of recording transactions and preparing financial statements for a period.
Flowchart:
Transactions → Journal → Ledger → Trial Balance → Adjustments → Final Accounts
Conclusion: Accounting cycle ensures systematic recording and correct determination of profit and financial position.