Accounting Concepts, Book-keeping Principles, and Journal Entries

Vocabulary flashcards generated from lecture notes covering accounting concepts (Consistency, Conservatism, Money Measurement, Cost Concept), features and importance of Book-keeping, and specific accounts from journal entry examples.

Consistency Concept

An accounting principle stating that any policy adopted by a business should be continuous or consistent throughout the business and generally not changed until circumstances demand, with any technique improvements disclosed via a note.

Conservatism Concept

An accounting policy directing the accountant to 'play safe' by anticipating no profit but providing for all possible losses, which may result in understating assets and overstating liabilities.

Money Measurement Concept

An accounting concept implying that only transactions capable of being expressed in terms of money using the ruling currency of a country are recorded in the books of account.

Cost Concept

An accounting principle where an asset is recorded in the books based on its historical acquisition cost (purchase price), serving as the base for further accounting and systematic reduction via depreciation regardless of market value changes.

Book-keeping

The art and scientific method of systematically recording day-to-day financial business transactions based on rules and regulations for a specific period.

Permanent Records

A feature and importance of book-keeping that maintains systematic and permanent records of all business transactions in the books of accounts for future reference.

Financial Information

Data maintained through book-keeping regarding profit, loss, assets, liabilities, investments, and stock at any given time to assist businessmen in decision making.

Return Inward A/C

A journal account used to record goods returned to the business by a customer, such as the returned goods from Ganesh valued at $₹ 9,500/-$.

Drawing A/C

A journal account debited when the proprietor withdraws cash, goods, or assets from the business for personal use.

Input CGST and Input SGST A/C

Tax accounts debited when goods, services, or assets (such as furniture purchased with 12\text{\text{%}} GST split into 6\text{\text{%}} CGST and 6\text{\text{%}} SGST) are bought by the business.

Loss by Theft A/C

An expense/loss account debited to record business inventory or goods lost due to theft, such as the $₹ 2,000/-$ goods lost by theft.

Discount A/C (Full Settlement)

An account used to record allowance or discount allowed when receiving a final settled payment, such as receiving $₹ 17,500/-$ in cash and allowing a $₹ 500/-$ discount on Priyanka's $₹ 18,000/-$ account.