A systematic way of recording and reporting financial transactions for a business or an organization. Accounting keeps track of the financial records of a business or organization. In addition to recording financial transactions, it involves reporting, analyzing and summarizing information for decision making.
Financial accounting is that branch of accounting which records financial transactions in a systematic manner in order to find out the financial result of a concern for a particular period of time and to show the financial position of the function as on a particular point of time.
Some Things of value owned by the firm which will enable the firm to get cash or benefit in the future is called assets.. Assets are the propaties which help to generate revenue. Normally assets are touchable, visible sometims transferable. Assets are real accounts.
Assets (fixed and current) definition:Current assets (CA) are those that will be converted to cash within one year. Typically, this could be cash, inventory or accounts receivable. Fixed assets (FA) are long-term and will likely provide benefits to a company for more than one year, such as a real estate, land or machinery, building, furniture etc.
All debts that a company or firm has yet to pay are referred to as Liabilities. Common liabilities include Accounts Payable, Payroll, and Loans. Amount Payable to someone is liability. all liabilities are personal accounts.
Expenditure usually means an outlay of money for which benefit of the outlay may or may not be utilized during the accounting period in which outlay occurred.
Expired expenditure is called expense. Expense is that part of expenditure from which benefit has been utilized in an accounting period.