Introduction to Accounting for Class 11 Accountancy : Chapter -1

Accounts Class 11 : In this article, we will talk about Introduction to Accounting from Class 11 Accountancy. This will enable us to understand the meaning of accounting, accounting process, functions and limitation of accounting.

Before understanding the accounting we will first discuss the important terms related to this topic as it is a new beginning for Class 11 Commerce students.

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Key terms For Class 11

Accounting-The process of categorizing, measuring, collecting, recording, classifying, summarising, analyzing and communicating financial information to the users.
Book keeping-Book keeping is the process of recording financial transactions in a systematic manner and classifying them into ledgers. Bookkeeping comprises of
1. Identifying financial transactions and events
2. Measure them in terms of money
3. Recording the identified financial transactions and events in the books of account
4. Classifying, posting them into ledger accounts
Accountancy- Accountancy is a systematic knowledge of accounting .in other words it tells us how to maintain the books of accounts.
Trading and Profit and loss account- Trading and Profit and loss account show the profit earned or loss incurred by the enterprise during the accounting year.
Balance sheet- Balance sheet is the statement which shows the financial position of the enterprise on a particular date.
Accounting information- Accounting information is used for forecasting, comparing and evaluating financial performance and position. It also helps in taking economic decisions.
Double entry System of Accounting- It is a system of accounting whereby both debit and credit aspects of the transaction are recorded.
Accounts from incomplete records- It is a system under which both aspects of the transactions are not recorded in all the cases. In some cases, both aspects are recorded, while in others either one aspect is recorded or transaction is not recorded at all.

As per American Institute of Certified Public Accountants

“Accounting is the art of recording, classifying and summarising in a significant manner and in terms of money, transactions, and events which are in part at least of a financial character and interpreting the result thereof.”

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