myCBSEguide provides sample papers with solution, test papers for chapter-wise practice, NCERT solutions, NCERT Exemplar solutions, quick revision notes for ready reference, CBSE guess papers and CBSE important question papers. The revision notes covers all important formulas and concepts given in the chapter. They are further classified into: (a) Tangible Assets: Tangible Assets are those assets which have physical existence and can be seen and touched. (ii) Communication the financial result :- Accounting is used to communicate financial information like net profit. Helps to take policy decisions. 3. It is historical in nature; it does not reflect the current worth of a business. So it is important that they are regulated and do not report misleading information. Capital Receipts: Capital Receipts are those receipts which are occurred by other than business operations like money received by sale of fixed assets. 6. Capital Expenditure: If benefit of expenditure is received for more than one year, it is called capital expenditure. Book keeping is the recording phase while accounting is concerned with the summarizing phase of an accounting system. Also, cost control is made possible by comparing the … For example: Debtors, stock etc. manipulation in accounts to present a more favorable position of a business firm than its actual position. It help owners to compare one year’s results with those of other years to locate the factors which leads to changes. Measurability. Financial statements have incredible importance for both internal and external stakeholders. 2. It can be classified as : 1. It must be free from bias and errors. Non-Current Assets: Non-Current Assets are those assets which are hold for long period and used for normal business operation. Solution: Question 4. Sold goods […] All accounts are divided into two sides. Deferred Revenue Expenditure: There are certain expenditures which are revenue in nature but benefit of which is derived over number of years. 1. How to Create Worksheets using Test Generator? Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. balance sheet which shows assets on one side and Capital & Liabilities on the other side. It is a Secondary Stage which begins where the Book keeping process ends. 2. These notes will certainly save your time during stressful exam days. Fundamentals of Accounting 1.03 FUNCTIONS OF ACCOUNTING ii) Classifying: Classification means transactions or entries of one nature are grouped under one head of account. Sales: Sales are total revenues from goods sold or services provided to customers. The main aim is to maintain systematic records of financial transactions. Drawings: The money or goods or both withdrawn by owner from business for personal use, is known as drawings. The distinction between the two are as under. 4. It gives the complete picture of the financial conditions of the business unit. 5. For Example: Huge Advertisement Expenditure. 2. To compile national income and other information. income statement, shows the net profit of business operations of a firm during a particular accounting period. The revision notes help you revise the whole chapter in minutes. Comparability: The information should be disclosed in such a manner that it can be compared with previous year’s figures of business itself and other firm’s data. Capital: Amount invested by the owner in the firm is known as capital. 2. It help a firm in the assessment of its correct tax Liabilities such as income tax, sales tax, VAT, excise duty etc. Example: Purchase of Machinery. CHAPTER-1 Introduction to Accounting class 11 Notes Accountancy, According to American Institute of Certified Public Accountants, “Accounting is the art of recording, classifying and summarising 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 Principles Board (APB) of AICPA(U.S.A) defined accounting as “Accounting is a service activity. Income: Income is a wider term, which includes profit also. Account : Account refers to a summarized record of relevant transactions of particular head at one place. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.”. Book Keeping should not be confused with accounting. In addition to bookkeeping, Accounting also includes summarizing, interpreting and communicating the financial data to the users of financial statements. (b) Intangible Assets: Intangible Assets are those assets which have no physical existence and can be felt by operation. For example: Goodwill, Patent, Trade mark etc. 1. Let us understand the meaning of basic accounting. Cost Accounting:- It is that Subfield/Branch of accounting which is concerned with ascertainment of total cost and per unit cost of goods or services produced/ provided by a business firm. Download revision notes for Introduction to Accounting class 11 Notes Accountancy and score high in exams. Purchased goods for cash 5,000 and on credit Rs.2,000 iii. 2. For example: Rent, Wages, Salaries, Interest etc. Stock : The goods available with the business for sale on a particular date is known as stock. 1. For example, if we buy goods for cash we get cash memo, if we buy goods on credit, we get an invoice, when we make a payment we get a receipt. Solution: Question 2. Expenditure: Spending money or incurring a liability for acquiring assets, goods or services is called expenditure. These are the Introduction to Accounting class 11 Notes Accountancy prepared by team of expert teachers. Profitability to claim higher wages and bonus, whether their dues, Qualitative Characteristics of Accounting Information. 5. Save my name, email, and website in this browser for the next time I comment. Revenue Expenditure: It is the amount spent to purcahse goods and services that are used during an accounting period is called revenue expenditure. 4. It is analytical in nature and required special skill or knowledge. These are assets of the business. Cost : Cost refers to expenditures incurred in acquiring manufacturing and processing goods to make it saleable. Assessing the financial capability, ability of the business to pay its debts. Understandability: The information should be presented in such a manner that users can understand it well. The present age is the age of trade business and commerce. A Bill of Exchange is Bill Receivable for seller at time of credit sale. Income means increase in the wealth of the enterprise over a period of time. Voucher: The documentary evidence in support of a transaction is known as voucher. NCERT Solutions, NCERT Exemplars, Revison Notes, Free Videos, CBSE Papers, MCQ Tests & more. Role of Accountant Accounting is both a science as well as an art. Accounting information systems have three basic functions: The first function of an AIS is the efficient and effective collection and storage of data concerning an organization’s financial activities, including getting the transaction data from source documents, recording the transactions in journals, and posting data from journals to ledgers. Schedules and notes forming part of balance sheet and income statement to give details of various items shown in both of them. To download Introduction to Accounting class 11 Notes, sample paper for class 11 Chemistry, Physics, Biology, History, Political Science, Economics, Geography, Computer Science, Home Science, Accountancy, Business Studies and Home Science; do check myCBSEguide app or website.

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