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|. Voucher: The documentary evidence in support of a transaction is known as voucher., , 15. Goods: It refers to the products in which the business unit is dealing, , 16. Drawings: Withdrawal of money and/or goods by the owner from the business for personal use is known as, drawings, , 17. Purchases: Purchases are total amount of goods procured by a business on credit and on cash, for use or, sale, , 18. Stock: It is a measure of something on hand - goods, other items in a business is called stock Stock is also, called inventory,, , 19. Debtor: A debtor is a person who owes money to the business firm as he received some benefits from the, business., , 20. Creditor: A creditor is a person whom the business owes money as he has given some benefit to the, business., , , , , , , , —, , Vijayabheri Malappuram District Panchayath | Page-2, , , , CHAPTER-2, THEORY BASE OF ACCOUNTING, , GAAP: In order to ensure uniformity in accounting procedures and methods, certain accounting principles have, been accepted by accountants all over the world. The rules and guidelines used in preparing accounting reports are, termed as Generally Accepted Accounting Principles (GAAP), , Basic Accounting Concepts: The basic accounting concepts are referred to as the fundamental ideas or basic, assumptions underlying the theory and practice of financial accounting and are broad working rules of accounting, activities. The important concepts are:, , 1 Business Entity: This concept assumes that business has distinct and separate entity from its owners., , 2. Money Measurement: The concept of money measurement states that only those transactions and happenings in, ‘an organisation, which can be expressed in terms of money are to be recorded in the book of accounts., , 3. Going Concern Concept: Going concem concept assumes that a business firm would continue to carry out its, operations fora long period of time., , 4. Accounting Period: The period of interval for Which aeCouints aré prepared to know the profit or loss and what,, exactly the financial position of the business is called accounting period, , 5. Dual Aspect (or Duality): This concept states that every transaction has a dual or two-fold effect on various, accounts and should therefore be recorded at two places., Assets= Liabilities + Capital, , 6. Matching:The concept of matching emphasises that expenses incurred in an accounting period should be, ‘matched with revenues during that period,, , 7.Conservatism (Prudence): This concept requires that business transactions should be recorded in such a manner, that profits are not overstated. All anticipated losses should be accounted for but all unrealised gains should be, ignored., , Vijayabheri Malappuram District Panchayath | Page-3, , , , , , CHAPTER-3, RECORDING OF TRANSACTIONS-I, , Accounting Equation: Accounting equation signifies that the assets of a business are always equal to the total of