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CH # 11

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Distinction between Financial accounting and Cost and Management accounting

S.No Financial accounting Cost and Management accounting 1 It is primarily for external purpose It is primarily for internal purpose 2 It provides information about the financial performance and financial position of the business It provides information of ascertainment of cost to control cost and for decision making about the cost. 3 It classified records, presents and interprets transaction in terms of money It classifies, records, presents and interprets in a significant manner the material, labour and overheads cost 4 It shows the profit or loss of the organization It provides the details of cost and profit of each product, process etc 5 Financial statements are prepared for a definite period, usually a year Its reports and statements are prepared as and when required. ...
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Define Ledger. Also write down the list of “sub-division of Ledger”

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What is account? Traditional Classification of Account

What is Account? The term “Account” is a record in summarized and classified form of all business transactions that take place between particular person and things specified. Account is the root of accounting. Classification of accounts: To record a transaction in the books of account, the first thing to do is to ascertain which account is to be debited and which account is to credited. In order to ascertain this correctly, a clear idea about the different classes of accounts is essential. Accounts may be divided into the following classes. 1. Personal accounts: Accounts relating to persons or firms are called personal accounts personal accounts can take the following forms: i.                     Natural person’s accounts : for examples Ali’s, Aslam’s account etc ii.                   Artificial...
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