Today we are living in a language arena. We have a language all around us. Be it a human life or an animal life, tech life or a social life language is every where. In tech life, Java, C++, Ruby on Rails etc are the languages of a computer so without the languages its difficult to have a meaningful life. We do business and business also have a language and wiki defines accounting as the language of business
Learning accounting means learning the language of business and to learn the business language we need to be familiar with the accounting principles. Knowing accounting principles is called basic accountancy. The more the basic is strong the more stable building you will be able to struct and so, to learn accounting you need to lay down a solid foundation of knowing the accounting principles.
Many people ask me what is the easiest way to learn accounting.
The simplest answer is that if you learn the basic rules of debit and credit and types of accounts then you can become an expert in Accounting in no time. Basic rules of accounting is called basic accountancy
Types of Accounts
Basically we can categories all the accounts into 3 main types of accounts.
01) Individual or personnel Accounts
Individual accounts consists ledgers which can be named to indiviaul
02)Goods and Assets Accounts
03) Income and expenses Accounts
The most important thing in business without which business activities in relation to financial matters becomes clueless and have no goals, no ideas where they are going, where they started, where they are right now, what will happen.
In a Business a lot of transaction occurs and at each steps one needs to record them, monitor them, needs various reports from the past and current data so the future plan and financial goals can be achieved otherwise every efforts becomes meaningless
As Many of you already aware some basic rules of accounts yet i will go again with the same rules which are the life line, and root of entire accounts
When a financial transaction incurred, it has two effects
1. Money, goods, property changes hands
2. It may result in a profit or loss or neutral to the concerned party
The transaction when recorded, it always in the following way
1. One account is debited
2. The other account is credited
These are the thumb rules of accounts and a bit more thumb rules will be in my next post