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  CHAPTER: 4     (BASIS OF ACCOUNTING)   Cash basis of accounting :   this is a system in which accounting entries are recorded only when cash is received or paid, entry is not recorded when a payment or receipt is merely due. It means revenue is recognised only on receipt of cash. Advantages of cash basis 1)       It is very simple as adjustment entries are not required. 2)       This basis of accounting is most suitable for those enterprises where most of the transactions are on cash basis. Disadvantages of cash basis 1)       It does not follow the matching principle of accounting. 2)       It does not five true and fair view of profit and loss and the financial position of an enterprise because it ignores outstanding and prepaid expenses and accrued income and income received in advance. Accrual basis of accounting :   under accrual...

                                            Chapter- 3         (Theory base of accounting and accounting standards and IFRS)   Meaning and nature of accounting principles : Accounting principles are the rules of action or conduct which are adopted by accountants universally while recording. Definition of accounting principles :   “principles of accounting are the general   law or rule adopted or proposed as a guide to action , a settled ground or basis of conduct or practice”(AICPA)             The principle of accounting can be classified in to two categories 1)       Accounting concepts 2)       Accounting conventions Accounting concepts:   They are basic assumptions. They are generally accepted set of account...

                                                              CHAPTER-2                                                    (BASIC ACCOUNTING TERMS)                 Entity Entity means a thing that has a definite individual existence. There are two types of entities a)      Business entity Entities which are formed for earning income by providing service or selling goods are known as Business entities. For example, TATA Ltd., Reliance Industries, Vimal  garments etc. b)      Non Business entity Entities which are formed for service motive are known as non-business entities. For example, Delhi...

                                        Chapter-1                                     (Introduction to accounting)                                                                                                                     ...