Page 14 - CA_ELG_Volume I_ELG-Sample
P. 14
1.4 Theoretical Framework Principles and Practices of Accounting Paper 1
Identify the Transactions & Events
Journal/Subsidiary
Books – Primary Books
Recording in Book Accounts Ledgers –
Secondary Books
Classification of
Transactions & Events Income/Expenses
Assets/Liabilities
Summarising – P&L and B/S
Fig. 1.2 Flow of Accounting
1.3 Procedure of Accounting
Based on the above definitions, procedure of accounting is basically divided into two parts:
(i) Generating Financial Information
(ii) Using the Finacial Information
1.3.1 Generating Financial Information
Recording: All the transactions which are entered by the business entity which are of
financial character, having supporting evidence are recorded in the books of accounts.
Such recording of transactions are done in a book called journal. Based on the size
and nature of the business entity the books may further be divided into various
subsidiary books.
Copyright © Veranda Learning Solutions | www.verandalearning.com/ca
