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Accounting Concepts and Conventions

Accounting Concepts and Conventions Accounting is generally considered as the language' of the business. It records business transactions which have taken place during the accounting period and communicates the results thereof in the form of financial statements, such as, Profit and Loss Account and Balance- Sheet etc. There are certain set rules for preparing the financial statements. These rules are usually called General Accepted Accounting Principles (GAAP) and have been commonly accepted by the professional accounting world as general guidelines for preparing the financial statements. Accounting principles, rules of conduct and action are described by various terms such as concepts, conventions, assumption etc. ACCÓUNTING CONCEPTS Accounting concept means the necessary assumption or conditions upon which accounting is based. A list of accounting concepts which are generally used is given below: 1. Entity concept 2. Dual aspect concept 3. Going concern concept 4. Accounting per
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Forms of Business Organisations

Forms of Business Organisations ‘Business’ means any activity that keeps a person busy. The main aim of doing any business is to earn profit.  However, organization of a business must comply with any of the proved legal forms that gives the organization a distinct status and also helps to determine its identity. There are four distinct forms of business organizations:- (i) Sole proprietorship (ii) Partnership (iii) Joint stock company (iv) Cooperative society SOLE PROPERIETORSHIP It is the simplest form of business organization and is known as ‘one man business’.  In this form of business organization, one person is solely responsible for providing capital, for bearing the risk of the enterprise and also for day-to-day management of the business.  In retail pharmacy business (chemist shop) individual professional skill is essential.  Therefore, this form of business is best suited to a sole proprietor.   Salient Features of Sole Proprietorship 1. Sole proprietor has full authority o
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Recording of Transactions

          Recording of the Transactions The recording of the transactions in the books of account is the first stage in the accounting process. An external event that affects assets, liabilities or capital is called a 'transaction' The documents on the basis of which entries are recorded in the books of account are known as source documents e.g., vouchers, invoices, bills, cash memos, receipts etc. These documents provide information about the nature of  transaction and the amount involved in it. BOOK-KEEPING Book keeping is defined as the science and art of systematically and correctly recording of all transactions which involve the transfer of money or money's worth. The systematic book-keeping enables us to find out accurately the result of business transactions during a particular period. It shows the financial position of business firm at any time clearly and correctly. Now-a-days, much of the book-keeping function time is performed by machines.   S.no Book keeping Acc
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https://www.slideshare.net/mobile/BharathRaj20/drug-store-and-business-management-64383360
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