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ELEMENTS OF ACCOUNT 1

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Abstract

Accounting is often said to be the language of business. It is used in the business world to describe the transactions entered into by all kinds of organization. Accounting terms and ideas are therefore used by people associated with business, whether they are managers, owners, investor, bankers, lawyers, or accountants. As it is the language of business there are words and terms that mean one thing in accounting but whose meaning is completely different in ordinary language usage.
The actual record-making phase of accounting is usually called Book-keeping. Few of our traders, especially the so-called “petty trader” keep proper records of what they buy and sell or what they pay and receive. In short their business transactions.
Consequently, they are able to tell at anytime the value of goods & other properties that they possess, what they owe to others and what others owe to them and the amount of profit or loss they have made which is called the financial position of their business.
The art of recording business transactions in such a manner that the financial position of a business can be ascertained readily at anytime is known as Book-Keeping.