Accounting concepts, Processes and Books of Accounts

In a simple business environment characterized by small amount of resources, with involving very few individuals, each and collectively with well-defined aims, the need for recording and analyzing the amount of resources available and on who owns them is too trivial to claim the efforts of recording them and also analyzing the business-related transactions which call for, employ, and productively consume and convert, the resources. The needful data and all repeatable information are simply in the memory of the concerned individuals. When the transactions become more complex, involving more persons, and more resources, soon the transactions often become intertwined. Consequently, a few requirements towards assuring productivity of the transactions arise and need attention. Typically, these include : 

1. to keep track of the movement of resources, 
2. to identify as to who owns them, or is to be responsible for them, during their time wise utilization in the transactions including productive activities based on them, and 
3. to ensure that the resources are Wing used for the purpose(s) intended. 

Even if all these details are scrupulously observed, recorded as need be, and assured, yet, every often, there is a need to gather analyse and interpret all the recorded information so as to sustain the efficiency of the business. Techniques and systems to ensure that relevant data are collected and presented are to be devised and operational. The general processes of accounting address on this need and scope; things are taken on impersonally; management is, in the process, helped with reliable & periodic information, and thus, management is enabled to manage better through a team of managers. 

Objectives 

After studying this unit, you should be able to 

• appreciate the comprehensive definitions of accounting concepts and processes, 
• realise thereby the importance and thrust of the processes, 
• pick-up guidelines in double-entry accounting for recording the transactions, 
• understand the essence and elegance of GAAP, and 
• get an insight into the contents, purpose aid utility of the several Books of Accounts, and qualify yourself to cast the trial balance.