■Qualitative Characteristics of
Accounting Information ■
●To be useful, Accounting Information
should have following four qualities :-
1▪︎ Realiability : -
It should be correct, without mistakes
& anyone should be able to check it &
Trust it.
2▪︎ Relevance :-
It should help users make decisions &
Meet their needs.
3▪︎ Understandability:-
It should be simple & Clear enough for
Users to understand.
4▪︎ Comparability :-
Accounting Information should be
presented in such a way that Users
Can compare it easily- both over time
(Intra and Inter firm comprision).
In other words, Comparabilty means
Accounting Info should be Consistent
& Uniform so it can be compared
across time and with others.
It supports bitter decisions - making
By helping Users understand trends and
Difference.
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Commerce Career Academy
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Contact information, map and directions, contact form, opening hours, services, ratings, photos, videos and announcements from Commerce Career Academy, Specialty School, 5/81, Sector-5, Rajendra Nagar , opposite-khaitan public school/Gate No. 1 SHAIBABAD/Ghaziabad ( Uttar Pradesh), Sahibabad.
Providing education based on "Concept-Application-Interpretation" for commerce stream sub.of XI, XII, CA-Foundation./Inter/Final, CS -Foundation /Exec./Prof ,CMA,B.Com(P/H),MBA(Fin)etc. MISSION
To provide a strong foundation of knowledge, skills and professional values that enables the students to grow as wholesome professional and adapt to changes throughout their professional career through the
* ACCOUNTING *
As Information System
■ Accounting is like a language of
Business.It translate day-to-day
Transactions into useful information
To help people make decisions.
■ Accounting is not just about numbers,
It is mainly about providing useful
information to people, who need it.
Just like news gives you information
about what's happening around the
world.
Accounting gives financial information
about a business.
■ Reason :-
Why Accounting is called as
"information system":-
▪︎ It collects financial data(sales,
Expenses,etc.)
▪︎ It records this data properly in books.
▪︎ It classifies & summarized the data
Into reports( income statement,
Balance sheet/ position statement).
▪︎ Then it communicate this information
to users( internal & external).
■■ Types of Accounting Information:-
Accounting gives three types of
information -
1• Income statement :-
This tells how much money made or
Lost in a period.
It includes reports like Trading Account
& profit & loss Account.
Shows Gross Profit/ Net Profit or Loss.
2•Financial Position :-
This tells the current position of
business- What It owes(Assets)&
What It owes(liabilities).
3• Cash Flows Statement :-
This shows how Cash & Cash-
equivalent moved in & out of the
business during an accounting year.
It helps in planning payments,
Investment, & handling contingencies.
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■ What Accounting Does ??
☆ Functions of Accounting :-
1. Recording (Journalizing) :-
All financial transactions are recorded
in journal.
Ex. Purchases of goods recorded in
journal.
2. Classifing(ledger posting) :-
Financial transactions are grouped
into different Accounts.
Ex.All cash transactions in cash
account.
3. Summarizing :-
Data is summarized into financial
statements.
Ex. Trading Account,Profit & loss
Account, Balance-Sheet .
4. Analyzing and Interpretation :-
Financial data is analyzed to
understand performance.
Ex. Comparing profit of two years.
5. Communicating :-
Information is shared with interested
users /diffrent stake-holders .
Ex. Report to investors or
Management. .
~~~~~~~~~~~~~~~~~~~~~~~~~~~
■ Why Accounting is done ?
▪︎ Objective of Accounting :-
1. To keep systematic records :-
Accounting helps in recording al
financial transactions in an organised
way.
Ex.- Recording, Sales,purchases,
Expenses. Etc.
2 .To know Profit or Loss :-
It shows whether the business is
earning profit or suffering Loss.
Ex.profit=Income- Expenses .
3. To know financial position :-
It tells what the business own & what
It owes?
EX.-Assets (cash,stock) & liabilities.
(loan).
4.To provide information to users :-
It gives useful information to owners,
investors, banks,government.
5. To helps in decision making :-
Accounting data helps Management
take decisions like explanation,pricing
etc.
6.To Meet legal Requirements :-
Businesses must maintained Accounts
as per law(Tax,Audit,etc.).
~~~~~~~~~~~~~~~~~~~~~~~~~~~
29/03/2026
Classes are available ONLINE (All over-India) and OFF-LINE.
DOUBLE ENTRY SYSTEM
▪︎ The double entry system is a method of
Accounting in which every financial
transaction is recorded in at least two
Accounts .one Account is Debited and
other is Credited .This ensures that the
Accounting Equation .
[Assets =Liabilities + Capital ] always
remains balanced.
▪︎ Every Debit has a corresponding and
Equal Credit.
▪︎ Key Features :~
1.Two fold effect- Every Transaction
affects at least two
Accounts.
2. Debit = Credit - The Total Debit
amount always Equal
the total credit
amount.
3. Complete Record- It provide a full and
systematized record
Of transactions.
4. Accuracy check- Helps in preparing a
Trail Balance
statement to detect
errors.
▪︎ In Accounting, the Business is treated
as a separate Entity from its owners and
other Stake holders.
▪︎ Debit [Dr.] 》Represent Receiving/
& Application of funds .
》Increase in Assets & Exp.
▪︎ Credit [Cr ] 》Represent the Giving or
Source of funds aspect.
》Decrease in Assets &
Expenses.
》 Increase in. Liabilities/
/Capital & Income.
▪︎ Thus , Debit and Credit represent the
two aspects of every transaction,
Ensuring that Accounting Equation
remains balanced.
▪︎ Tip 》
* Never Start with Debit or Credit
* Always start with :
▪︎ Analysis
▪︎ Classification
▪︎ Then Entry.
▪︎
BOOK-KEEPING.
● Book-keeping means writing
down all day to day money transactions
Of Book-keeping
● Book-keeping means writing
down all day to day money transactions
Of a business in an organised way.
●"Book-keeping is just Recording what.
money comes and what goes out.
● Case-study:~
▪︎ you run small Shop.
- Bought Goods. ₹ 2000
- Sold Goods. ₹ 3000
- paid electricity bill ₹ 500.
● On Book-keeping,you simply Write
these in a Book/system.
Date. Transactions. Amount.
Day1. Purchased Goods. 2000
Day2. Sold Goods. 3000
Day3. Electricity paid. 500.
● That's it - No Calculation,
No Analysis,
Just Recording.
● Book-keeping-- only Recording.
Accounting. -- Recording.
+
Summarizing .
+
Analyzing.
● Conclusion:-
Book-keeping is the process of.
Recording financial transactions of a
business in an systematized way.
~~~~~~~~~~~~~~~~~~~~~~~~~
ACCOUNTING
●◇ Accounting is the process of
Recording, Summarizing,and.
Understanding Money Transactions to
Know profit & loss.
●◇Accounting is writing down all Money.
Transactions of a Business.like what.
comes in(income)and what goes-
out(expense).
●◇Case- study:-on Accounting.
▪︎ Mr. Raj starts a Garment shop with
₹100000 .
▪︎ Transactions During an Month:
1. Invested capital- 100000
2. Purchased clothes- 60000
3. Sales made - 90000
4. Shop rent paid-10000
5. Salary paid to helper - 5000
6. Unsold stock left- 20000
●◇step1:~what Accounting does?
Accounting will record all
Transactions properly and
analyze them.
●◇step2:~Calcuate profit?
▪︎ Cost of Goods Sold :-
= purchases- closing stock.
= 60000- 20000=40000.
▪︎ Total Expenses:-
= Rent + Salary.
= 10000+ 5000= 15000.
▪︎ Profit Calculation:-
= sales-(cogs - Exp.)
= 90000-(40000+15000)
= 35000 profit.
●◇step3:~why Accounting is important?
▪︎ Because of Accounting, Raj.
can understood:
>is Business profitable?-yes.
>How much stock is left?-20000.
> where Money spent?- Rent,
Salary.
> Business position- Growing
Or Not.
●◇step4:~Final Conclusion:~
▪︎ Accounting is not just writing
numbers, it helps in:-
> Decision Making.
> Profit Measurement.
> Final Control on Assets .
~~~~~~~~~~~~~~~~~~~~~~~~~~
Learn - Accountancy- series 1
Accountancy :- Introduction-
◇ Accountancy as a systematized Body
Of knowledge.
Because it Consists of a well organised
and Structured set of Principles,
Concepts, and Rules.
◇ It is not Random or Unorganized.
◇ All Accounting Activities follow a
Proper Sequence such as :-
• Recording of Transactions.
• Classifing them into Accounts.
• Summarizing into Financial
Statements.
◇ Accountancy is based on established
Principles like:-
• Accounting Concepts.
• Accounting Standards.
◇ These Principles are applied uniformly
Which makes information reliable &
Comparable.
◇ Thus, Accountancy has a definite
Structure & follows logical procedures
Therefore , it is rightly called
Systematized Body of knowledge.
◇ This systematic arrangement helps in
Accurate Recording & Meaningful
Interpretation of financial information.
~~~ ~~~ ~~~
08/03/2026
On the Base of following ~
+ Concept + Application #
08/11/2025
Financial Management.......
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5/81, Sector-5, Rajendra Nagar , Opposite-khaitan Public School/Gate No. 1 SHAIBABAD/Ghaziabad ( Uttar Pradesh)
Sahibabad
201005