To ascertain the profit earned or loss incurred during a particular accounting period which further help in knowing the financial performance of a business. Example: Purchase of Machinery. It ignore qualitative elements such as efficiency of management, quality of staff, customers satisfactions etc. Final Accounts Meaning. (ii) Communication the financial result :- Accounting is used to communicate financial information like net profit. These are liabilities for the business. Cash Discount: The objective of providing cash discount is to encourage the debtors to pay the dues promptly. Account : Account refers to a summarized record of relevant transactions of particular head at one place. 3. It help owners to compare one year’s results with those of other years to locate the factors which leads to changes. 2. (b) Intangible Assets: Intangible Assets are those assets which have no physical existence and can be felt by operation. 2. Cost : Cost refers to expenditures incurred in acquiring manufacturing and processing goods to make it saleable. It help in keeping systematic and complete record of business transactions in the books of accounts according to specified principles and rules, which is accepted by the Courts as evidence. myCBSEguide provides sample papers with solution, test papers for chapter-wise practice, NCERT solutions, NCERT Exemplar solutions, quick revision notes for ready reference, CBSE guess papers and CBSE important question papers. Financial Accounting:- It is that subfield/Branch of accounting which is concerned with recording of business transactions of financial nature in a systematic manner, to ascertain the profit or loss of the accounting period and to present the financial position of the business. Voucher: The documentary evidence in support of a transaction is known as voucher. Cost Accounting:- It is that Subfield/Branch of accounting which is concerned with ascertainment of total cost and per unit cost of goods or services produced/ provided by a business firm. Gain: A non-recurring profit from events or transactions incidental to business such as sale of fixed assets, appreciation in the value of an asset etc. It provide information about the financial position of the business by means of balance sheet which shows assets on one side and Capital & Liabilities on the other side. Cloudflare Ray ID: 5f99d4933cbb7e19 Purchases: The term purchases is used only for the goods procured by a business for resale. Balance Sheet. All accounts are divided into two sides. 5. An Economic activity that affects financial position of the business and can be measured in terms of money e.g., expenses etc. Purchase Return: When purchased goods are returned to the suppliers, these are known as purchase return. The main aim is to maintain systematic records of financial transactions. To prevent frauds by maintaining regular and systematic accounting records. For example assets in balance sheet are shown at their cost and not at their market value which could be realised on their sale. It is routine in nature and does not require any special skill or knowledge. Solution: Question 4. Solution: Question 2. Assessing the financial capability, ability of the business to pay its debts. 1. 2. Fundamentals of Accounting 1.03 FUNCTIONS OF ACCOUNTING ii) Classifying: Classification means transactions or entries of one nature are grouped under one head of account. These notes will certainly save your time during stressful exam days. Revenue Expenditure: It is the amount spent to purcahse goods and services that are used during an accounting period is called revenue expenditure. Your IP: 22.214.171.124 3. For Example: Furniture, Machinery etc. It must be free from bias and errors. Download revision notes for Introduction to Accounting class 11 Notes Accountancy and score high in exams. Deferred Revenue Expenditure: There are certain expenditures which are revenue in nature but benefit of which is derived over number of years. Income means increase in the wealth of the enterprise over a period of time. The revision notes covers all important formulas and concepts given in the chapter. Accounting- concept, objectives, advantages and limitations, types of accounting information; users of accounting information and their needs. Accounting information can be categorized into following: 1. 1. Here is complete course on class 11 introduction to accounting, theory base of accounting, recording of transactions, preparation of Journal, ledger account, trial, bank reconciliation statement, depreciation, provisions and reserves, bill of exchan… Capital: Amount invested by the owner in the firm is known as capital. In case of trading concerns it is purchase of final goods and in manufacturing concern it is purchase of raw materials. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. It may be brought in the form of cash or assets by the owner. i. Harish started business with cash Rs.18,000 ii. They basically are a report card for the company. It shows assets on one side and Capital & Liabilities on the other side. Income: Income is a wider term, which includes profit also. Download CBSE class 11th revision notes for Chapter 1 Introduction to Accounting class 11 Notes Accountancy in PDF format for free. 4. If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. These are the Introduction to Accounting class 11 Notes Accountancy prepared by team of expert teachers. 1. It includes all the topics given in NCERT class 11 Accountancy text book. To compile national income and other information. Moreover, the figures given in financial statements ignore the effects of changes in price level. Understandability: The information should be presented in such a manner that users can understand it well. To provide financial information to the management which help in decision making, budgeting and forecasting. Profit : The excess of revenues over its related expenses during an accounting year is profit. Loss: The excess of expenses of a period over its related revenues is termed as loss. Bill Receivable: Bill Receivable is an accounting term of Bill of Exchange. CBSE Syllabus for Class 11 Accountancy Part A: Financial Accounting – I Unit-1: Theoretical Frame Work. Expenses: Costs incurred by a business for earning revenue are known as expenses. How to Create Worksheets using Test Generator? To download Introduction to Accounting class 11 Notes, sample paper for class 11 Chemistry, Physics, Biology, History, Political Science, Economics, Geography, Computer Science, Home Science, Accountancy, Business Studies and Home Science; do check myCBSEguide app or website. The left side of an account is called debit side and the right side of an account is called credit side. Sales: Sales are total revenues from goods sold or services provided to customers. Book Keeping should not be confused with accounting. Relevance: To be relevant, information must be available in time and must influence the decisions of users by helping them to form prediction about the outcomes. What will be the effect of the following on the Accounting Equation? It is the summarizing phase of an accounting system. 3. 3. 3. Stock : The goods available with the business for sale on a particular date is known as stock. It contain only those informations which can be expressed in terms of money. CHAPTER-1 Introduction to Accounting class 11 Notes Accountancy, According to 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 results thereof.”, Accounting Principles Board (APB) of AICPA(U.S.A) defined accounting as “Accounting is a service activity. Loss = Expenses – Revenue. It is a primary stage and basis for accounting. It is done by junior staff called book-keepers. myCBSEguide | CBSE Papers & NCERT Solutions. The transactions recorded in ‘Journal’ or the ‘Subsidiary Books’ are classified or posted to the ‘Ledger Account’. CBSE quick revision note for class-11 Mathematics, Physics, Chemistry, Biology and other subject are very helpful to revise the whole syllabus during exam days. identification, recording, classification and; summarization of transactions; ascertainment of results; exhibition of the financial position of an organization; communication of necessary information derived from an interpretation In Simple words, accounting is the process of collecting, recording, classifying, summarising and communicating financial information to the users for judgment and decision-making. To evaluate the performance to take various decisions. Assessment of due taxes, true and fair disclosure of accounting information. Sales may be cash sales or credit sales. Besides that, a budget is prepared to estimate the total expenditure for future activities. Solution: Question 3. 3. 5. 1. Measurability. Let us understand the meaning of basic accounting. So it is important that they are regulated and do not report misleading information. Information relating to profit or loss i.e.