Chapter 1: Theory, Concepts and Terminologies

Accounting is an art of recording, classifying and summarizing transactions and events and interpreting the results thereof.


The social and economic needs of society change with time. Just like other subjects such as law, medicine, engineering and science, accounting has also emerged to assist the social and economic activities of the society. From ancient times, accounting system has prevailed in one way or another. Indian historians have described the economics of Chanakya and explained the existence and significance of accounting. Western historians have given credit to a mathematician named Mr. Luca Pacioli of Italy. There are several opinions about the origin of accounting but for its use and significance, common practices prevail across the world. Due to industrial revolution and expansion of business - trade activities, the use and significance of accounting has increased day by day. Before acquiring information of accounting, let us acquire primary knowledge of accounting.

In this chapter:
+ Introduction
+ Characteristics and Objectives of Accounting
+ Advantages and Limitations of Accounting
+ Users of accounting and their needs
+ Terminology of Accounting
+ Types of accounting
+ Steps to prepare Accounts


  • Lecture
    41 m 6 s
  • Concepts and Terminologies Quiz
    3 questions
  • Who provides capital to the business?
    1 m
  • What is 'bad debt' for a business ?
    1 m
  • What is the stable value of money?
    1 m
  • What is "double entry system of accounting?"
    1 m
  • State whether discount received is an income or expense ?
    1 m
  • Explain economic transactions.
    1 m
  • State the types of liabilities.
    1 m
  • Discuss types of assets.
    1 m
  • Explain accounting as an art and science.
    1 m
  • Explain: Accounting is a language of business.
    1 m
  • Describe the definition of accounting.
    1 m
  • Explain 'Deshi Nama' system and 'double entry' system.
    1 m
  • Explain: Process of accounting
    1 m
  • Discuss: Characteristics of Accounting
    1 m
  • Describe the advantages of accounting.
    1 m 7 s
  • What are the limitations of accounting?
    1 m
  • Who are the users of accounting information?
    1 m
  • Explain the qualitative characteristics of accounting:
    1 m 4 s
  • Explain the following terms:
    1 m 30 s
  • Explain the methods of maintaining accounts on mercantile system and cash system. (Basis)
    1 m
  • Basic Concepts
    810 KB
  • Chapter 1 Exercise
    940 KB
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