NIOS Class 12 Accountancy — Flashcards for Quick Revision

A: Book-Keeping is the art of keeping a permanent record of business transactions systematically in the books of account. It focuses only on recording financial data in a structured manner. Accounting, o

A: A transaction is an event involving the exchange of value between two or more entities that can be measured in monetary terms. It is any business activity that affects the financial position of an ent

A: The accounting process consists of four sequential steps: (1) IDENTIFICATION - Determining which economic events and transactions should be recorded (only financial/monetary events); (2) MEASUREMENT -

A: Accounting concepts are basic assumptions, rules, and principles that serve as the foundation for recording business transactions and preparing financial accounts. They are important because they: 1.

A: The Business Entity Concept states that for accounting purposes, a business enterprise and its owners are two separate, independent entities. Key Points: - The business is treated as a separate unit

A: The Money Measurement Concept states that all business transactions must be expressed in terms of money (currency) to be recorded in accounting books. Transactions Recorded (In Monetary Terms): - Pur

A: An accounting convention refers to common practices and customs that are universally followed in recording and presenting accounting information of a business entity. These conventions have evolved th

A: The Convention of Consistency means that the same accounting principles and methods should be used for preparing financial statements year after year. This ensures that meaningful comparisons can be m

A: The three types of consistency are: (1) Vertical Consistency (Same organisation): Found within the group of inter-related financial statements of an organisation on the same date. Example: Fixed asset