Day: January 20, 2022

The capital in a business does not remain intact but changes over time due to the following factors: additional investments, profits drawings or losses. 1) Additional investments (I)-occurs when the owner of the business brings in his personal cash or Read More …

A business can be set up in two ways: Owner supplying all the resources Owner supplying some of the resources and the rest being supplied by outside parties. The two cases bring out the accounting equation also called book- keeping Read More …

The four principal qualities of useful financial information are understandability, relevance, reliability and comparability. Understandability: an essential quality of the information provided in the financial statements is that it is readily understandable by users. For these reason users are assumed Read More …

Concepts/conventions/principles Accounting Concepts are broad basic assumptions that underlie the periodic financial accounts of business enterprises. Examples of concepts include: The going concern concept: implies that the business will continue in operational existence for the foreseeable future, and that there Read More …

Accounting information is produced in form of financial statement. These financial statements provide information about an entity financial position, performance and changes in financial position. Financial position of a firm is what the resources the business has and how much Read More …

Definition Accounting is defined as the process of identifying, measuring and reporting economic information to the users of this information to permit informed judgment Many businesses carry out transactions. Some of these transactions have a financial implication i.e. either cash Read More …

The word “number” came from the Latin word “numerus” which mean “to apportion”, to assign, to allot, and to take. Therefore a number is something that measured the size of an allotment. Numeral is any symbol that can represent a Read More …