In accounting and notation, two words are combined with writing in accounting, and notation means numbers. Writing an occasion sequence in numbers is named accounting. The act of transcribing events into numbers to realize a selected purpose is named accounting. Here events mean all actions during which money is exchanged.
In simple terms, accounting refers to the orderly accounting of monetary transactions, classifying them, preparing summaries and presenting them in such how that they will be analyzed and interpreted. Summary in accounting refers to creating a table and therefore the basis of study and interpretation are the ultimate accounts, under which the business account, profit-loss account, and account/position statement or record are prepared.
The initial three functions of accounting include the subsequent three:
The act of transcribing the transaction for the primary time is named recording. The inscription is named Roznamcha i.e. Journal.
The action of dividing written items into separate parts is named classification. The classification is additionally called Ledger.
The verb to write down classified items in one place is named summarization. The abbreviation is additionally called balance. With the rise within the size of the business within the era, the complexities of business have also increased. Business is said to several customers, suppliers and employees and hence hundreds, thousands or many transactions happen within the business world. All transactions happen. It’s difficult and impossible to memorize all transactions linearly. We would like to understand the profit of the business and also want to understand what proportion his assets are, his liabilities or liabilities, what proportion his capital is, etc. Accounting for of these things is required.