Hello all Today topic about accounts and its subject knowledge..

Accounting is an double entry system of book keeping is a scientific and complete.hence the transactions should be recorded according to the following rules. Each transaction must have two spaces.The benefit have receiving aspect and benefit have giving aspect. A transaction should be divided in to the two aspects.

The rules is making entries under the double entry system can be given below.

   1.presonal accounts  : 

debit the receiver, credit the giver.

2. Real accounts :

Debit the what comes in, credit what goes out.

3. Nominal accounts: 

Debit all expenses and losses ,credit all incomes and gains

Bases of accounting.

And here there are three bases of accounting in common usage.Any one of the given below bases may be used to finalise accounts.

1.cash basis ,2. Accrual or mercantile basis,3.Mixed or hybrid basis.

Cash basis.

  Under this cash basis of accounting ,all incomes are considered by the earned only when they are actually received in cash.expensrs are considered by theme incurred only when they are actually paid the difference are total income and expenses. Accrued incomes and incomes received in advance are also not adjusted.

income will be recognised only wheh cash is received expense is recognised only when cash is paid.

Government system of accounting is mostly on cash basis.

Accrual basis of accounting or mercantile system.

   This system in which accounting entries made on the basis of amounts having become due for the payment or receipt incomes are credited to the time in which they are earned whether cash is received or not.similarly expenses and losses vare debited to the period in which they are incurred.

The profit or loss of any accounting period is difference from incomes are earned and expenses incurred irrespective of cash payment or receipt.

This type of accounting will be followed by all the merchants,trade and industry.

Mixed or hybrid basis of accounting.

     This accounting in which some items of the income are taken by the cash basis while most of the expenses are shown on accrual basis.it a hybrid system why because of it combines both of the cash basis and accrual basis.

 The profit or loss shown will not be in realistic conservative people who prefer recognising income when received. To provide for all expenses whether paid or not prefer this system. It is not widely practised due to it inconsistencies.

This studies of accounting normal basics accounting..

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