What is Accounting?
✏️ In one line
Accounting means recording, sorting and summing up the money transactions of a business, so people can see how it is doing.
📖 Story time
- Every day, Meera writes each sale and purchase of her kirana shop in a notebook.
- 'Sold rice ₹800.' 'Bought sugar ₹1,200.' 'Paid electricity bill ₹600.'
- At the end of the month she adds it all up and knows exactly how much she earned.
- That habit of writing, sorting and adding up money matters is accounting.
🎯 Your turn
Meera: Meera writes 'Sold goods for ₹500' in her book on 3 March.
Which step of accounting is this?
Nice! Right! Writing a transaction down in the books is called recording.
Not quite. Hint: She is writing it down for the first time.
Which of these will Meera record in her accounts?
Nice! Correct. Only events that can be measured in money are recorded.
Not quite. Hint: Which one has a ₹ amount?
Only transactions that can be measured in money are recorded in accounts.
Nice! True. A friendly helper is great, but you can't write 'friendliness ₹?' in the books.
Not quite. Hint: Think about the last question.
Many people use a business's accounts. Match each user to what they want to know.
- Owner
- Bank
- Government
- Supplier
Drag a card onto a box, or tap a card and then a box.
Nice! Nicely done! Each user reads the same accounts for a different reason.
Not quite. Hint: A bank lends money. A supplier sells on credit.
🎉 Topic done!
You cracked What is Accounting?. Ready for the next one?
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