Master Note of Accounting and Finance

Meaning of Journal All the transactions of a business are recorded first, in a book of original entry as and when they take place. Such book of original entry is popularly known as 'Journal'. In Journal, all the financial transactions are recorded in chronological order i.e. in the order of dates systematically. Similarly, each transactions is classified into its debit and credit aspects and both aspects are recorded in one entry with a brief explanation of transaction, which is called 'narration'. Journalizing The act of recording a transaction in the journal is called Journalizing. Journalizing is a process of identification of the transaction, classification the account and applying the relevant rule of debit and credit. Objectives of Journal  The following objectives of the journal are listed as follows To provide systematic and chronological record of all business transaction To ensure the application of double entry book keeping system in recording the transactio...

What is Accounting Cycle? Accounting is the process of recording the transaction to make the financial information consolidated to give a clear picture and understanding about the financial health. Accounting can be broadly classified into two broad categories include Financial Accounting and Managerial Accounting based on users of accounting . Basically there are two types of users of accounting as internal users (includes management, managers, owners, BOD, employees, etc.) and as external users (includes suppliers, customers, governments, etc.) Financial Accounting is basically prepared for external users that provides the clear and understandable information of the company. While Managerial Accounting is basically prepared for internal users that helps to make proper decision in the organization for stability, growth and opportunity. An accounting cycle is the process of preparing the financial statements (include Income Statement, Balance Sheet and Cash Flow Statement) to ascer...

Who is the Father of Accounting? Luca Pacioli is the father of accounting. Luca Pacioli (c.1447 – 1517) was the first person to publish detailed material on the double-entry system of accounting. He was an Italian mathematician and Franciscan friar who also collaborated with his friend Leonardo da Vinci (who also took maths lessons from Pacioli). What is an Accounting? Accounting is the process of identifying, measuring, and communicating economic information to various users, including management of the company, stockholders, creditors, financial analysts, and government agencies. Accounting is not just a procedural record-keeping activity done by people who are "good at math." In fact, accounting is "the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information." Book-keeping   is   a   part   of   accounting   and   is   concerned   ...