Telangana Open School (TOSS) Class 12 Accountancy — Flashcards for Quick Revision

A: The main purpose of accounting is to record, classify, summarize, analyze, and communicate financial transactions to help users make informed economic decisions. It helps determine profit or loss, fin

A: Book-keeping is the art of recording financial transactions in a systematic and permanent manner. It focuses only on the recording aspect of transactions, such as sales, purchases, receipts, and payme

A: Book-keeping involves only recording transactions, while accounting includes recording, classifying, summarizing, analyzing, and communicating financial information. Accounting begins where book-keepi

A: A business transaction is an economic event that involves the exchange of goods or services between two parties and has a financial impact on the business. It must be measurable in monetary terms. Exa

A: A source document is the original evidence of a business transaction. It provides details like date, amount, parties involved, and nature of transaction. Examples include cash memos, invoices, receipt

A: An accounting voucher is a document prepared based on a source document to record a transaction in the books of account. It includes details like date, account names, debit and credit amounts, and nar

A: A Bank Reconciliation Statement is a statement prepared to reconcile the difference between the bank balance shown in the cash book and the pass book on a particular date. It helps identify the reason

A: It is necessary because the cash book and pass book often show different balances due to timing differences or errors. The BRS identifies causes like unpresented cheques, uncollected deposits, bank ch

A: The two main books are: (1) Cash Book – maintained by the business, where all bank deposits and withdrawals are recorded; (2) Pass Book – maintained by the bank, which records all transactions in the