Basics Of Accountancy:

Accountancy is the subject which will be studied easily. The one thing is that you have to understand the concepts because concepts is all about in accountancy. First of all, you need to know what is accountancy? Accountancy is the process by which you can record, classify, summarise and analyise the business transactions and events which are in monetary terms. If you are new to study accountancy subject means you will confuse or known nothing about what is meant by transaction and events? First of all, transaction is the exchange of goods and services for money. But events are those which are the results of the transaction at the end of the accounting period i.e, one year. Now, cleared about that term not yet means there is an example which will clear your doubt. For instance, if you buy a machinery means it is a transaction likewise by the use of machinery you will produce products which will be sold. And then move on to the next thing, before starting learning you have to learn the accounting terminologies and understand them what they mean compulsorily which will make you study accountancy easier. Already we have seen the two terms transactions and events and after that transactions is further sub-divided into two categories as cash transaction and credit transaction. In cash transaction, you will record only the transactions made in terms of money. But in credit transaction , you will record the transactions which are not made in terms of cash. For instance, if you buy a machinery on credit basis without giving cash.Capital is the amount invested in a business by the owner of the business. Business owners are also known as the propietor,the entreprenuer and then the owner of his business. Assets are the one which are the properties and investments of the business. Liabilities are the one which are obligations or duties of the business to the outsiders such as creditors. Purchase means buying of goods and services which are meant for resale by the business. Sales means selling of the goods and services which are meant for resold. Creditors means the one who are given financial assistance to the company other than bank. Debitors means the one who are owed to the creditors for the money which was provided to them by the creditors. In the upcoming articles, we will learn more about the accountancy terminologies, concepts and conventions.