Accounting Types and Concepts Management YouTube Lecture Handouts

Glide to success with Doorsteptutor material for competitive exams : get questions, notes, tests, video lectures and more- for all subjects of your exam.

Accounting Types and Concepts Management

Meaning

Accounting may be defined as the process of recording, classifying, summarizing, analyzing and interpreting the financial transactions and communicating the result thereof to the person interested in such information.

Types of Accounts

  • Personal: It can be an artificial person or a natural person.
  • Rule:
    • Dr. the receiver
    • Cr. the giver
  • Real: The assets can be tangible and intangible.
  • Rule:
    • Dr. what comes in
    • Cr. what goes out
  • Nominal: Expenses and incomes of the business comes under it.
  • Rule:
    • Dr. all the expenses and losses
    • Cr. all the incomes and gains

Concepts

  • Business Entity Concept: This concept says that the business and owner have a different identity.
  • Going Concern Concept: It is assumed that business will go on forever.
  • Dual Aspect-Aspect: This concept focuses on every transaction having two aspects i.e.. , Dr. and Cr.
  • Historical Cost Concept: It purely focuses on every transaction being recorded at historical cost rather than market value.
  • Accounting Period Concept: There is a period or time of recoding transactions. It is usually of year.
  • Money Measurement Concept: The transactions which can be recorded only in money terms are recorded.

MCQs

Which concept says that a business will go on forever?

1. Money measurement concept

2. Historical cost concept

3. Going concern concept

4. Revenue Recognition concept

Which concept focuses on a time period to record every transaction?

1. Business entity concept

2. Historical entity concept

3. Dual aspect concept

4. Money measurement concept

Manishika