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: -GOPH
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Userr of Accountiny Lnfomation
Accounting information fs useful do mang people,
becau Ot shouos the Çrn cnal and
pesforo an
posttfon ot a bufness.
This s bbady druided fnto buoo catesoriea fie,
internal usersigide the organisalimj an8 evter
nal wus( outiide the Orsanigafm].
1-nte nal Uyers
Ouoners IManaement
To know proiu,finanial positi on, and to moake
de cYsfong'aou! planning, controlltng and poliy
making
Employe /worker
To 'know asout iob seurity, bhonussalary hikey
and staiity ot busines
(0 aExternal lyers
vetos/hareholders
To know wheather their fnveatment is Bave and profit
agle and to decide oheather to buy hold,or setl 'ghareg
Creditor / undorK
To cheel the crditoorker ok th business and whea ther
loansldues wfll oe repaid on tme
Gtover nment& fRegulatory Authorit'ea
ens u legal complíane, and prrp
To calalate tazes, engu
uonomic poiues
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Cuitoert
To kngo asout th. finanéal stas,rtity o the busines
espically if (hey depend nft for contthou 3upply
sosruias
Pusle Research
To analy butin trade,eonomie growth, and
mploymnt potential.
-GOPI1
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a. 3Explain: Money Mealurement Concept
k
Mony Meagurement Conupt
The Money Measrement Conupt o acountg
states thaonly thoe tanyationg and eyent
wohich can be kpred in term omog
reorded in th is teated
booki o qceount - MoHey
he omnon unit o meaemenU
for example,purchae of machinuy for ao00oo
oill be reuorded 3inu t y Canot bemeaud
in monetary term
Lmportane
1: în recording buinegs tranati
erurer unfformity fn
Makes ffnanial 3tatements undestanda ble and om
parable.
Ëmitatfmy
lgnores qualitative as pect (ke brand reputatfm,
cmployee efuny]
Aumes mony fs stasle, but rt vaww changs
ch ane
de to fnftatim. lde flatim.
nshort, this conupt helps maîntain corststny în
account but does not caplue non- monetary pettors
affectfng th. business
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Ct Conaístenu Conuentfm
mea
The conaiteny conuenlion of attountie
that a busine ghould follouo the sameaccont
prfniplea, methods, and pratfa fron one qccoun
tire per fod to ano ther. This help3 inop
frnaneal statemen of diferent ears in a
for ¬xemple, ff a ompany wses the straiaht- ne
method for charsing deprciatim,it should tontinu
Using th sam methodín futur years-1f it changes
melhodeequently comparfs0n o prof?tt and ñan
cfal posftfon beome confuaiñg.
Cmportoane
Makes financal oata omparale ouer tme
a. Build truyt and relrati lity'n fincnual statnents.
exeptim
Chanye in method fs allouxd ony f ft provides
mor acurate and fair veiw.
tn short, the uonisteny conuentim ens ures unifor mi
ty fn acuoun tfag pratubut changes can be made
fustffed and proper
properlyy diclo_«d.
-GOPh
Page tio
(i3 Sepote Entty Konpt
The Seprate (ntfta Concapt etates that the bualnea
andthe ooner oreudo different cntitfes.n
accountne, we re cord th bustnes's trany acton
Bepratel rom th personal transackfonu o 1he
Dubner.
Keg pofnta
fndependent unft
aCapftal is a liasty: Ouones 's inyestnen t fs congíd
ered as th. buiness ousing
to the ouner.
money
Drauoig are not expene: f th Ouwner withdraw
money lsood,ît rduer capital,not bsineas
profr
Pers onal 4busine3 transactiong must bbe bupt dif
Example
Mr Rah l fnuesti oo0oîo bis byineg
bugíne booer :Cash CAeh)SUo00: Cap(ia
hÇ Rahul epunds,5bo00 frm busines1 cash ma
personal party .it ís recorded as Drasins ,not as
a buaini kpege
mportance
Help in oret calulation o profit /loe
Enslres clear frnanial positi
positim Th..buginess
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-GOPI
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Pruenta mixing s personal and buaine transa
cfong
Lnportant for legal rungnitfon (eapically in omp
tn short Acording to aeperate entfBy tonot,
busine fs trea t a a unft distan from
oonr. Therr fore, ony buaine transatfone
ar tcorded fn th. Sooks of accoun
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Efy Conservatisn Concept
Cong-ervatis m onupt mea that expeched ey
Should be recorded etecosn- ut expetd
Ponmedíatelu but' expected
profit shoul not be recosned untrl realfged
t ensure that agsets and fnomes are not overtt
atd, and Labi tfes and ex peng e3 are not unders
tated.
Example 50000 but
duppos a company gells aoods worth
achan thata A000 may not be collete
As per ongrvalfsm, we e cord
rtalgaSle ruenue
f the maket vau ot stoct fall& oelow fts cost:
We record 3tock at lowr ost or m a r t
prfa
mportanu
protect Touetoi_ and creditors from Du erstfmatfm
Preuents &howig false prafitu
Eryur ffoantal statment shouo atru nd
fafr uefw.
-GOPI
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B.Accountiy Standardy
Obfectue
Maint atnin s Aceg un lfny Reuo
Deteminirg ot Profit and oss
tHelps fn anagement totake gtrateaie deisfong
Detirmininp frhancial postron
éal positicn tnforrmation to ujers
Prouiding renanal
Protectin6ine Aiscts
Iegal Cormplíiene
Solueny and Liqudity
Advantaes / Benef?ta
fnanal inform ation alout Bu fness
Helps in management
Helpi fo comparigfon i.e întu fim and ?ntra ffrrn
Evedene fn court
Helpi în Bettlement ot Tax lialilty
Helps to qrow th business
Heles fo deusion making
Hekpr fn toking lo ans añd rañfny punde from
Helps in the eu ents rsolueny
ñmftaiong
Aecording Accountng fR not fully exat
UarealiHe fnformatfon
Acounting isnoru the quontitative clement
Acountin ignorea The effect of prfu leuel changes
Personal- OBias
lead to wfndow drcasfng
