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Accounting information

  Persons interested in Accounting Disclosures:-    Accounting is of primary importance to the proprietors and the managers. However, others person's such as creditors, prospective investors, employees, etc. are also interested in the Accounting information. 1) Proprietors:- A business is done with the objective of making profit. It's profitability and financial soundness are, therefore, matters of prime importance to the proprietors who have invested their money 💰 in the business. 2) Managers:- In a sole proprietary business, usually the proprietor is the manager. In case of a partnership business either some or all the partners participate in the management of the business. They therefore, act both as managers as well as owners. In case of joint stock companies, the relationship between ownership and management becomes all the more remote . In most cases the shareholders act merely as rentiers of capital and the management of the company passes in to the hands of profe...
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Write a bout journal

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  Journal:-         Journal means a day book 📚 or daily record. It is the book where in all the transactions are first recorded in chronological order. It is a book of prime, original or first entry, as all business transactions are first recorded in the journal. Form journal the posting are made in the ledger. journal is only subsidiary book 📚 i.e., a book 📚 which is sub-ordinate to the ledger. Which is the principal Book 📚 of accounts? The journal analyses the various transactions into their debits and credits so that they could be easily posted to the ledger accounts. In order words journal is helpful in the preparation of Accounts in the ledger. The process of recording transactions in journal is termed as 'journalizing'.        The journal is rule of as follows:-                         Journal            Column (1) : Date     ...
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Need providing Depreciation

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  To know the true profits:-     We have seen that depreciation is an expense and becomes an important element of the cost of production.    Though it is not visible like other expenses and never paid to the outside party yet it is desirable to charge depreciation on fixed assets as these are used for earning purposes.   So their depreciation must be deducted out of the income earned from their use in order to calculate true net profit or loss. To show true financial position:-  Financial position can be studied from the balance sheet and for the preparation of the Balance Sheet fixed assets are required to be shown at their true value.    If Assets are shown in the Balance Sheet without any charge made for their use or depreciation, then their value must have been overstated in the Balance Sheet and will not reflect the true financial position of the business.   So for the purpose of reflecting true financial position, it is necessary t...
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