Introduction to overhead

The total expenditure which is incurred in the process of production or providing services is called overhead costs may be classified as : 

A . direct cost 

B. indirect cost .

                        A direct cost :

                     The expenditure which is directly involved in production is called direct cost . This cost is either attributable to or identifiable with  the particulars unit or cost center and  it is the main feature of direct cost . Direct materials , direct labour and direct expenses are included cost . 

                B. Indirect cost :

                 Beside direct expenditure , there are several other expenditure which cannot be identified with a particular unit of cost . these expenditure are incurred the production , but they are not attributable with a particulars unit of output . These expenditure are called indirect expenditures , overhead expenses or establishment expenses. These expenses are incurred inside as well as outside the factory .Rent of building , lighting and heading charge ,office salaries, or selling expenses are examples of indirect cost .    

Difination of centralized stores

 A store where all types of materials required for the organization are kept by one single department is called centralized stores . All the materials required are stored and issued by one single department is called centralized stores . All the materials required are stored and issued by this department only. when some new materials enter the stores , the store informs the departments fresh stocks materials are available for issue. 

            Advantage of centralized stores : 

There are several advantages of centralized stores :

1. minimum investment in stock , 

2.  In centralized stores proper control of materials is possible and comparatively easy , 

3. Less space is required because stocks are kept in minimum quantities , 

4.Not many staffs are required for operation , 

5. As all records are maintained centrally ,

6. Minimization of cost brings economy in storing and production , 

7. The store layout could be planned in systematic way . 

            Disadvantages of centralized stores : 

1. As there is only one store, it is practically difficult to keep near to the entire users department , 

2. Hence , it leads to increase in the cost of carriage , 

3. Transportation of materials is delayed if the store department is situated far from other department . 

4. Any disturbance in transport may affect production , ETC.  

Location and layout of stores department

The following factors  are be considered while determining the location of stores : 
1. It should be near to the receiving department .
2. It should be approachable by vehicles. 
3. It should be easily accessible to all departments , particularly to the production department . 
4. It should have sufficient space to hold the purchased inventory . 
5. It should be located considering the nature of the materials purchased . 
6. It should be located at a safe place .
7. Store must be equipped with sufficient bins and racks of appropriate shapes sizes. 
8. All bins should be serially numbered , one bin for one item . 
9. Special attention must be paid for liquid and chemical items protecting their loss from leakage, evaporation or atmospheric conditions . ETC. 

store - krrper's duties and responsibilities

The person who is in charge of the stores and who is entrusted with the responsibilities of stores control is called storekeeper . 
A storekeeper has to perform the following function : 
1. receive materials for storage , 
2. record the materials received , 
3. classify and codify the item received,
4. protect and preserve of items received in store , 5. supply of materials on demand .

duties and responsibilities of storekeeper : 
A. To receive the materials correctly, 
B. to enter the items receive in the bin card regularly in the chronological order ,
C. To keep the item in their allotted bin or bins ,
D. To prevent of loss of materials by theft , deterioration , evaporation , leakage , etc, 
E.To prevent the entry of unauthorized person into the stores , ETC.

objectives of store keeping

The follow3ing are the objectives of store keeping :

1. To collect necessary materials in a systematic way and by preventing undesirable purchase . to achieve those objective store levels minimum , maximum and reordering are to be determined . 
2. To help the regular function of the department i.e. supervision and management of flows of materials . 
3. To keep the materials in their appropriate location with proper codification and identification . 
4. To arrange forth proper issuing procedure .
5. To maintain the record of materials movement .
6. To inform the concerned department regularly about the stock position . 
7. To prevent loss of the stock by damage , pilferage , moisture , temperature , evaporation , carelessness , deterioration or misappropriation .
8. To minimize the storing cost .    

interduction to store keeping

materials received in the store should not be kept at whatever place . Therefore , agonized storing is one basic requirement of materials control that prevent losses from misappropriation, damage ,theft, evaporation , deterioration , leakage or obsolescence of store item , Whatever controlling effort put up by the organization will be loss effective if the item purchase are not kept systematically within the stores . experience shows that in many industrial organization they exercise a stiff control over cash but pay loss or no attention to materials control . It is surprising that they do forget the materials purchase by paying cash. materials can be converted into cash after they have been process into the finish production . So the materials in the store should be considered equivalent to cash . a well equipped store department is necessary to exercise control over materials where functions like collection , arrangement , prevention , distribution and recording of materials movement are carried out .           

Methods of costing

The concept and rules related to determining the cost of a product or service is called costing . There are diffirent method of costing . The process of working is diffiers from business to business . Likewise ,the method of costing are diffirent . For example , the production process foe catton textile and biscuits is different . should be adopted in consideration of the nature of the product . The following paragraph describe the general method of costing :

1. job order costing 
2. process costing 
3. service costing / operating costing 
4. unit costing  method
5.batch costing 
6. multiple costing method etc.

difference bwten financial and cost Accounting

#  basic  purpose of financial accounting : 
                                                               The main purpose of financials accounting is to provide information about the financial position of the business concern in a general way . It disclose the position of profit or lose and balance sheet of the concern to woner as well as outside parties .  

basis purpose of cost accounting :
                                                        The purpose of cost accounting is to provide information management for proper planing , control and to take appropriate decision .

# statutory requirement of financial accounting :
                                                                                 financial accounts are prepared as per the requirement of the company act and income tax act . it is compulsory to abide by the low .

statutory requirement of cost accounts :
                                                                 it is kept to meet the requirement of management .it is optional . 

# analysis of expenditure of financial accounting :
                                                                                   it classifies record and analyzes cost according to the nature of expenses . wages salaries ,depreciation ,rent etc good example .

Analysis of expenditure of cost accounting : 
                                                                        it record expenditure in accordance with the purpose for which costs are incurred. it classifies cost as direct and indirect on functional basis.     
 

limitations of financials accounting

cost accounting is a branch of accounting development to do away with with the limitations of financial accounting . Accounting system that maintain the record of financial transaction of a concern is called financial accounting .
       Form the managerial point of view , the information provide by financial accounts is not sufficient . Therefore ,cost cost account was developed . In spite of its utilities and effectiveness , the financial accounting system has the following limitations : 
1. Lack of cost analysis ,
2. Lack of profit analysis ,
3. Historical importance , 
4. Analysis the reasons of losses , 
5. proper measure of efficiency standard, 
6. Inadequate for management ,
7. Lack of materials control , 
8. Determining of selling price , 
9. Analysis of labor cost ,
10. cost reduction .       

Limitations of cost Accounting

In spite of it several advantage cost accounting is not free limitation , which are as follows : 


1. Lack of  uniformity   
                                   Different costing method are used to determine the profit . the result given by cost accounting are more estimate.

2. Join cost  
                   In cost accounting .the major portions of costs are join cost . To determine the cost of a product , join cost should be allocated separately .


3.Expensive 
                    Cost accounting is an expensive system . so only big firms can afford .


4. Development stage 
                                    Cost accounting  principle have not fully  developed . frequently recent concept are tested . For these reasons the principles have not been fully implemented as yet . 

Objectives of cost accounting

The main

objectives of cost account is to analyst the financial activities from which the cost involved could be allocated to each job or process and in the main time the actual  cost of each job or process could be ascertained . these objectives are as   follow: 

1. Ascertainment of cost 

                                        the prime objectives of cost Accounting is to ascertain the cost of product . 

2. To determine selling price 

                                               Cost accounting helps the management  determine the selling price of a product .

3. To help to analyze cost

                                                              Analyzing the cost or a product is another objective of cost accounting . 

4. To control cost 

                             Control is very important to reducing  cost . Here , control may be taken as reducing expenses , increasing working efficiency and minimizing of wages.

5. To reduce cost 

                            supplying quality product at minimum cost is symptom of profitability . 

6. To assist the management 

                                              Another objective of cost accounting is to assist the management by providing factual  information for making appropriate decision and formulating future polices .

7. To assist in preparation of final account 

                                                                      Value of closing stock is compulsory to preparing the final account .    

meaning and definitions of cost Accouuting

Cost accounting has been combined with two words ,'cost and ' accounting ' . The term cost denotes the total of all expenditures involved in the process of production . Accounting , on the other hand , collects and maintain financial records of each income and expenditure and makes the information about it available to the concerned officials . Thus , cost accounting is an art and science of recording , classifying and analyzing the cost involved in raw materials and labor  used in the process of production .cost accounting helps to ascertain the cost per unit , cost per process ,cost per batch cost per department and selling price of a production . 

The information obtained from cost accounting may be used for internal as well as external purpose . 

  Some prominent writers have given their concept of cost accounting . some of the definitions given by them have been reproduced hereunder : 

'' costing is the classifying ,recording and appropriate , allocation of expenditure for the determination of the cost of production or service and for the presentation of suitable arranged data  for purposes of control and guidance of management .'' Harold j. Weldon.

Importance of cost Accounting

One main importance of cost accounting is to overcome the limitations of financial accounting . The following are the importance of cost accounting : 

1. Reveals profitable and unprofitable activities ,

2. Help in cost control ,

3. Helps in decision - making ,

4. Helps in fix selling price , 

5. Helps in inventory control ,

6. Helps in formulating policies ,

7. Helps in cost reduction , 

8. Reveals idle capacity ,

9. Checks the accuracy of financial accounts , ETC.

Objectives of cost accounting

The main objective of cost account is analyze the financial activities from which the cost involved could be allocated to each job or process and in the mean time the actual cost of each job or process could be ascertained . those objective are as follows : 
1. Ascertainment of cost ,
2. To determine selling piece , 
3. To help to analyze the cost ,
4. To control cost , 
5. To reduce cost , 
6. To assist the management ,
7. To assist in preparation of final account , ETC. 

Classification of heads of expenditure

To symplefy the accounting function both in central as well as in opereting level office ., the government expenditure have have been clsssified into different heading . By classifying the expenditure under different head , the government has given a massage to opereting level office that they have to remain strick in that particulars head , when the expenditure are made , for which the budget is a allocated . sinces Fy 2059/60 onward the government has put into operation a new classification in the dead of expenditure by amending the old one . Following are the new classifications of such expenditure : 
1. consummable expenses , 
2. office operation and service expenses ,
3. Grants / subsidy ( current transfer ) ,
4. production nad service expenses,
5. capital transfer expeases , ETC.

(principle and procedures of gon accounting system)''Introduction"

  

     with a view to maintain control and proper utilization of government scarce budget.
   
 1.central level accounting:central level offices refer to ministries.Department.and                  other institutional bodies where the ministry of finance releases the budget directly.     
     
 2.operating level accounting:operating level offices refer to those  offices which operate    either regional level .zonal level or district level offices.

The following accounting  records. statements or reports are prepared and submitted under  operating level accounting:

1.General voucher

2.Bank cash book

3.Budget sheet

4.subsidiary ledger and

5.statement/ or reports

  

'' Forms Used in new accounting system '' ( Accounting system of nepal Government)

In HMG new Accounting system various types of forms are used for different purposes Accounting to their use . They may be categorized three groups : 

A . Forms of primary record :
 i. journal voucher (AGF no. 10 ).
 ii. cash payment slip (AGF no. 6 ). 
 iii. cash receipt  (AGF no. 11).


B . Forms for accounts or ledger :
 i. bank cash book ( AGF no. 5 ) .
ii. Budge sheet (AGF no. 8 ) .
iii. Ledger accounts (AGF no. 22).
 iv. cash received book (AGF no. 23). 
  v. budget summary and  expenditure control A/C (AGF no. 24). 


C . Forms for reports : 
 i. requisition from for the reimbursement of cash payment  (AGF no.6A). 
ii. Monthly report regarding revenue (AGF no. 9). 
iii. Statement of expenditure (AGF no. 13).ETC.

Importance of New accounting system( Accounting system of nepal government)

1. It provides detailed information regarding government revenue and government
     expenditures.

2. It provides necessary data for formulating government policies and program me.

3. It helps to prepare the budget for the next year.

4. It helps to control the government activities.
 
5. It helps to perform audit work.

6. It provides detailed information whether or not the aids.grants, assistance,loan given by        the friendly nations and international agencies are properly used.

Characteristics or eatures of new accounting system ( Accounting system of nepal Government)

1. based on double-entry system principle ,
2. simplicity, 
3. flexibility, 
4. source of financial information ,
5. secrecy , 
6. Guided and control by budget, 
7. based on financial act and rules , 
8. provision of budget transfer ,
9. User of bracket . 
10. Division in central and operating levels ,
11. Emphasis on banking transaction . 

Objectives of new Accountingsystem ( Accounting system of nepal Government)

The Accounts committee constituted by the government stated the following objectives of new Accounting system :

1. to provide basic financial statistics and necessary data required to prepare financial. 

2.To keep control over the available funds and other resources as well as  their expenditures. 

3. To summaries the accounting data to prepare government budget .

4. To determined the level and position of responsible officer involved in different projects and make them accountable.


5. To collect the historical data of budge head.


6.  To provide necessary financial data for audit and investigation of facts so as to evaluate the progress of project .  
     

Evolution of nepal Accounting system ( Accounting system of nepal government)

In Nepal ,the origin of government accounting system may be traced back Lichen period.At that period some sorts of record keeping regarding revenues and expenditures of the government had maintained.As the source of government incomes and expenditures were limited.the then government never felt the need of on elaborated accounting system in the country.During this regime.voluntary labor tax (shramadan) and property or kind tax(jinsikar) collected form the public .were the prime sources of government  revenue.At that period.government expenditures were also limited .construction of temples and renovation of old one.performance of religious works or allocation and arrangement of war more or less the same.government. In malls regime also.the government expenditures were or less the same.however the government explored and added some new sources of revenue.notably custom duty and  business tax.

new Accounting system of government of nepal ( Accounting system of nepal Government)

With the advent of democracy in the country in 2007 BS. Nepal's first priority was to have all round development of the nation . At that period , the USSR had adopted planned economy in the country and has achieved economic from that model .developing countries throughout the world were influenced with this model . They introduce this model in their respective countries and achieve success to a certain extend . Nepal also could not remains isolated from this influence .Therefore , Nepal presented budget in the year 2008 and also executed its first five year plan in the year 2013 . various countries of the world extended their hand in the development process of Nepal by providing grants , donation ,aids, subsidies etc.           

Accounting Equation of important transactions and Explanation

1. Transactions related to capital account .

2. Transactions related to drowsing account .

3. Transactions related to purchase account , purchase return account , cash discount and settlement of creditors ' account .

4. Transections related to sales , sales return account , discount allowed and settlement of debtors' account.

procedure for developing an accounting equation

The steps required for developing an accounting equation are as under :
 step 1 : To find out variables : Each and every transaction affects an accounting equation . The main three elements , assets, liabilities, and capital are included inaccounting equation .

step 2 : To find out effects variablrs : After financing out the variable effected by a transation , the second step  for developing an equation is to find out effects on  variable .

step 3 : Sho the effects on equation : After ascertaining the veriable of a transaction , it is necessary to show the effect on the appropriate side of equation .  

Accounting Equation

Assets are the valuable resources owned by a business . For financial the valuable resources are required . The the value of re sours and sours must be equal . The expression of the equality in the term of equation is known as accounting equation . An accounting equation is expressed as below :
                                                       Resource = source of finance
Resource denotes assets . capital & liabilities are included in the sours of finance .so the  above equation can be expressed in the following ways too :
                                                   Assets = capital + liabilities
                                                   capital = assets - liabilities
                                                   Liabilities = Assets - capitals
Accounting equation is also known as balance sheet equation . Assets ,liabilities and capitals are three basic element of every business transaction . 

Materials purchasing and receiving procedure (Accounting for materials nad stores )

There are a number of procedures involving in purchasing and receiving of materials . The following steps are followed :
A. purchase requisition .
B. Call for tender or quotation .
C. Purchase order .
D. Receiving and inspecting materials .
E. checking and passing of bills for payment . 

Purchase requisition (Accounting for materials nad stores )

A purchase requisition is a formal request for materials to purchasing department , received either from store or production department . On the basis of this purchase reqiusition , the purchasing department purchases materials and supplies for various department .For this , printed forms are used and prepared in triplicate . The first original copy is sent to purchasing materials .

centralizad purchasing (Accounting for materials nad stores )

centralized purchasing means the purchase of materials by a specialized with expert ataffs located at one place . Under this , the purchasing department purchases all the materials for various department and branchese of the organization . This purchasing department is handled nad controlled by a purchase manager or chief buyer .
                            Advanteges of centralized purchasing :
1. Bulk quantity of materials can be purchase at cheaper rate and at a good trade discount .
2. Quantity of materials can be maintained at it purchased by specialized and experience personnel .
3. better handling of store is possible .
4. Better co- ordination and co operation with other department .
5.recording and accounting of materials are easy and economical .
6. Effaective cotrol over materials can be possible .
7. facilitate planning and monitoring timely in delivery of goods .

                                Disadvantege of centralized purchasing :
It involves high initial cost to establish a purchasing department .
1. There may by delay ingetting materials from centralized store to verious department .
2. It is not suitable to those organizetion having branches at different geographycal location .
3. It creates a problem in case of emergency situation .
4. It take time to replace the defective materials .

purchase control (Accounting for materials and stores )

A huge amount of money is invested in purchasing materials by the organization . So it is importance to give due consideration in materials purchasing . Purchase control refers to the purchase of materials of right quality in right quantity at right price in right time form the right sources of suppliers . Purchase control avoids :
1. unnecessary purchase of materials .
2. Over - stoking of materials by unnecessary purchase.
3. Purchase at unreasonable price .
4. delay in delivery of materials .
5.Purchase of inferior quality of materials.
                                                 
                                                             For effective purchase control , the function of purchasing department should be classified and authority should be delegated to persons so that the  accountability can be established .     

Purchasing (Accounting for materials and stores )

Purchasing of materials is one of the important function of materials management and control because it affects the quality of product and involves a major portion of company 's finance purchasing means procuring of materials of right quality and quantity at a right price from the right sources of suppliers at a right time . Therefore a separate purchase department is established to perform these functions .   

store routing (Accounting for materials and stores )

store routing refers to the procedures applied in purchasing material, storing them and issuing to the concerned department . Store routing includes : 
1. purchasing and receiving of materials / materials purchasing and receiving procedure .
2. Storing of materials / store keeping procedure .
3. Issuing of materials / materials issuing procedure .        

essentials of material control ''acccounting for materials''

To achieve managerial control on material ,there should be :
1.   proper cooperation and co-ordination among various department such as purchasing , receiving , inspection and store .
 2. Centralized purchasing system under expert and trained personnel .
3. Proper classification , codification and standardization of all items in store .
4. Proper use of stander printed form for requisition ,order ,issue ,return and transfer of materials .
5. Proper storage facilities to avoid loss from fire .theft , damages etc.
6. Proper perpetual inventory system that reflects the physical movement of material and their current balance.
7. Proper system of internal check  to ensure the transaction that are automatically checked .  
 

Need for Material Control / objective of Material Control (Accounting for materials)

Material control is needed for the following reason :
A. To purchase the material at the most economical price by considering quality discount without  compromising on their quality .
 B. To minimize the investment in material by  avoiding overstocking of material .
C. To make the desired quality and quality of material available when required for efficient and uninterrupted production .
D. To provide the information of material for the preparation of production plan , policies , purchasing plan .
E . To reduce the losses and wastage by implementing proper handling and controlling system.  

Material control (Accounting for materials)

The  main purpose of cost accounting is to minimize the cost of production .To achieve this objective , proper planing and effective control over material is to be exercised . Materials  control mean a systematic control over purchasing , store and consumption of materials .It is necessary to ensure the supply of right quality and quality of materials at right time & to prevent extra expenses on unnecessary purchase and improper use .It can reduce the losses and wastage of material through efficient purchase of material , their efficient strong ans efficient use or consumption .  

Type of material (Accounting for materials)

direct material and indirect material are the two type of materials  which are explained as follows :
1. Direct material : Material cost which can be easily identified in the finished product and allocated or charge to the product is a direct material cost . direct material generally become a part of the finished product such as leather in shoes , timber in furniture , sugarcane in sugar are the example of  direct material .
2 . Indirect material cost : material cost which cannot be easily identified with individual cost unit is indirect material . Nails used in furniture , thread use in stitching garments are the example of indirect materials . Indirect materials are small & relatively less expensive items , which are not main part of the finished product. Lubricating oil ,  consumable hand tools and store , materials used for repair and maintenance work are also the example of indirect materials .    

Accounting for material (meaning of materials)

material is an important element for manufacturing concern.  It covers the major portion of the finished product and constitutes nearly  06-70 percent of the total production cost . the term material refers to the physical commodities ( raw material , consumable store , maintenance part ) used to make the finished production from their crud in nature and need to be processed further .They consist component , consumable stores , maintenance  material , spare and tools .

objectives of book-keeping

The following are the important objective of book-keeping :
A . To identify financial transaction : book -keeping identifies financial transaction from a large number of business transaction to keep their record .
B . To keep permanent record : It keeps permanent record of financial transaction as and when they arise in a systematic order .
C. To classify transactions : It classical financial transaction into three types - personal , real and nominal and record them accordingly in a permanent book .
D . To prepare statement  : It help to prepare different statement to summarize , present and interpret the financial information contained in the routine record .    

origin and evolution of book-keeping

The origin of book- keeping cannot be exactly traced out .However , it can be said that the book- keeping as old as money . It has been practiced from the ancient period .It is believed  that the beginning of book-keeping system was associated  with the development of business and its inception . In ancient period the himself did conduct the business in a small scale and book keeping was not essential to that extent .The increasing demands and needs of human beings as well as  the practice of currency gradually began to influence the business activities. scientific book - keeping system then commenced in Italy some 500 years  ago . In a.D a person named Luca Pacific published a book entitled ''sum made Arithmetical '', in which he deal f with the modern principle of book -keeping for that first time . In that book -keeping , he included the following provisional about the book - keeping :
A . Memorial that is memorandum book .
B . gestational ,that is journal book .
C . quadrant , that is ledger Account .             

meaning & concept of book - keeping

The term ''book-keeping ' is amalgamated from two English word 'book & keeping '. the according of a business concern and 'keeping denotes the maintain . Therefore , book keeping  refers to the act keeping the accounting of a business concern and other organization .
                                                                    
                                                                  In regard to term ''book -keeping '', different scholar and instituted have put for ward their own ways . some of them are as follows :

In the words of prof R.N .carter :'' Book -keeping is the science and art  of correctly recording in the books of account .All those business transaction that result in the transfer of money or money's worth.''    

J .R . batlibai Defined  '' book -keeping is the art of recording business transaction in a systematic manner .''

Function of accounting

The main function of accounting are discussed below:
I . To keep complete and systematic record :
                                                                    The main function of account is to keep complete and systematic record of business transaction according to specified rules . This function is achieved through book- keeping which is an integral part of accounting .
II . To ascertain the net profit and loss :
                                                           To ascertain the net profit earn or loss suffered on account of business transaction during the particular period is the next function of accounting . it help in ascertaining the fact whether the business firm has been running in profit or loss in a certain period . this function is achieved by preparing a statement which is known as income statement or profit and loss account .
III . To ascertain the financial position :
                                                           It also ascertain the financial position of  the business at a certain period . a statement is prepared in order to represent the total property and liabilities of the firm at a defined time which is described as 'balance sheet' or 'position statement . 

objectives of accounting

The primary objectives of accounting are given below :

  A . To maintain record of business : The main objectives of accounting is to maintain proper record of business transaction .Now-a -day the volume of transaction is so large that a human memory cannot absorb each and very transaction so it is very essential to keep proper and complete record of all business transaction . The record can be used as and when required by the person interested in the business .

B. calculation of profit or loss :
                                                 profit is a measure of the performance of an enterprise .To ascertain profit or loss made by enterprise as the end of accounting period is the next objective of accounting . for this purpose trading and profit and lose accounting is prepared

C . presentation of the financial position :
                                                              The financial portion of a business concern is shown by balance sheet . Balance sheet is a statement of assets and liabilities . the balance sheet of assets menu external  liabilities shows the capital or owner's equity . It also show the solvency position of the business , if assets are more then external liabilities , it is solvent in case of reverse , it is an insolvent .

D . To help determining the tax amount :
                                                             accounting is also helpful in computation of correct liabilities relating to income tax and other taxes .



 

Importans of Account

The record of economic transaction is important in personal life , business organization social institution as well as governmental bodies too. The main benefits and the importance of  accounting are as follows :
I. knowledge on profit and loss : Due to the maintenance of the authentic record about the complete economic transaction of the firm .
II. Financial analysis and interpretation : On the basis of the systematic record ,financial condition of the firm com be analyzed interpreted .
III. Detection and prevention of errors and frauds : On account of the scientific , systematic and regular  book- keeping of the firms economic transactions , errors and frauds can  be detected and prevented .         

scope of Account

Accounting is importations in professional business organization .social institution as well as governmental bodies
too. so its scope is unlimited .The accounting has the following different areas .
A. Help to trading concern : Accounting records the entries transaction of a business concern .
B. Help to non- treading concern : The institutes established without intending to profit are know an non-treading concern  .
C. Helps the government : The government collects the receipt in terms of tax , donation from donor countries , loans from financial institution revenues from  government companies etc .   
D. Helps to professional and individuals : The record of receipt and payment is importance in personal life or individual as well as professional.  

Basic Accounting conceppt

The rules of action or conduct which are derived from experience and practice and when they prove to be useful that are called as '' General Accepted accounting principle (GAAP)".  Those rule have been commonly accepted by the professional accounting world    as general guidelines for preparing accounting .
                                    A brief explanation of some accounting concept and convention is given in the following paragraphs

(i) Business entity concept (Assumption) :- For accounting purpose , a business is treated as a separate entity .
It is distinct from its owner and all other economic activities . Under this concept , it is assumed that the business enterprise exists its own rights .The affairs of the business should not be mixed up with the private affairs of owners or other persons associated   with it. A true picture of the financial condition of a business enterprise can be represented with the help of this concept .
 (ii) money measurement concept (Assumption) : All business transaction are expressed in terms . This assumption is supported  because the monetary unit is relevant , simple and understandable . those transactions which cannot be processed in terms of money cannot  be recorded . The reforge they should be ignored.
(iii) going concern concept (Assumption ): According to this concept , it is assumed that the business will continue in future for at least a reasonably long period of time . It is assumed that the business gad an indefinite life unless  it is likely to be sold or wound up in the near future . That is why ,it is also called the continuity  assumption .         

meaning &concept of accounting

accounting is often called the language of business because it provide information to manager , owners costumer . investors and other decision maker  in side   and out side an organization it is the process of  analyzing, calcifying and interpreting business transaction in financial or monetary terms .
                                                                     like book- keeping accounting  has also been defined by different scholars and institution , for better understanding of the  terms some of the note definitions are given below :
            American institute of certified public accountants defines account as "the art of recording , classifying and summarizing , in a signification manner and in terms of money transaction and event which are  , part at least ,of a financial characters and interpreting the result thereof . American Accounting  Association has defined the Accounting in a broad sense ." Accounting is the process of identifying , measuring and communicating economic information to permit informed judgment and decisions by user of the information .In the words of R. N. Anthony ."Accounting system is a means of collecting , summarizing analyzing and reporting in monetary terms the information of the business ."  
                                               accounting to bier man and Derwin: "Accounting may be defined as the identifying measuring recording and communicating of financial information ."
                            Thus it is clear from the above definition that accounting is a science of recording transaction of economic nature in a systematic manner and also an art of analyzing and interpreting them . The various step involved in the accounting process are as follows .
A. Recording of financial transaction .
B.  preparation of financial statement such as Income statement , Balance sheet ,statement of changes in financial position ,etc.
C. Analysis and interpretation of financial statement .
D. To communicate the result of analysis to all persons who are to make decisions to formulate future plant .