Financial Accounting

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Characteristics of accounting2
Accounting process3
Branches of accounting3
Importance and scope3

Accountancy refers to a systematic knowledge of accounting. It explains how to deal with various aspects of accounting. It educates us why and how to maintain the books of accounts and how to summarize the accounting information and communicate it to the users. In the words of KOHLER, “accounting refers to the entire body of the theory and practice of accounting.” “Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money; transactions and events which are, in part at least, of a financial character, and interpreting the results thereof.” “Accounting is the science of recording and classifying business transactions and events, primarily of a financial character, the art of making significant summaries, analysis and interpretations of those transactions and events and communicating the results to persons who must make decisions or form judgment.” “Accounting is the process of identifying, measuring and communicating economic information to permit informed judgment and decisions by users of this information.” Characteristics of accounting

a) Identification of financial transactions and events
b) Measuring of identified transactions
c) Recording
d) Classifying
e) Summarizing
f) Analysis and interpretation
g) Communicating

Accounting process
Classifying (posting into ledger)
Classifying (posting into ledger)
Communicating to the users
Communicating to the users


Financial transactions/ events
Financial transactions/ events

1. Cash book
2. Purchases book
3. Sales book
4. Bills payable book
5. Bills receivable book
6. Journal proper
8. Cash book
9. Purchases book
10. Sales book...
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