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It details the usefulness of financial statements for suppliers, customers, employees, banks, lenders, and owners, and explains the three core account types: real, personal, and nominal. The lesson also covers golden rules using debit and credit treatment and reviews key accounting concepts including revenue realization, matching, accrual, cash basis, going concern, accounting period, accounting entity, and money measurement. It concludes with the double entry system and its features.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":30,"@type":76,"position":81},"https://docshare.wps.com/document/technology/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/lesson-1-basics-of-accounting/653370/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/lesson-1-basics-of-accounting/653370.png","ImageObject",300,407,{"name":92,"@type":93},"Taylor Morgan","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-31","2026-10-25",true,{"@type":102,"interactionType":103,"userInteractionCount":19},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What is the purpose of accounting in this lesson?","Question",{"text":112,"@type":113},"Accounting is described as a process of identifying, recording, summarising, and reporting economic information to decision makers in the form of financial statements.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"What are the three types of accounts and how do they differ?",{"text":117,"@type":113},"The lesson lists Real Accounts (assets and properties), Personal Accounts (persons such as suppliers, customers, lenders), and Nominal Accounts (income, expenses, gains, and losses).",{"name":119,"@type":110,"acceptedAnswer":120},"How does the double entry system work?",{"text":121,"@type":113},"Each transaction has two aspects: debit (receiving) and credit (giving), and every debit has a corresponding credit. The system affects two accounts and helps verify accuracy through trial balance.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},653370,1793051821,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":29,"category_name":30,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":19,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":139,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145},1099523885336,"https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c","Lesson 1: Basics of Accounting  \nLesson Objectives  \nOn completion of this lesson, you will be able to understand  \n􀂇 Principles and concepts of Accounting  \n􀂇 Double Entry System of Accounting  \n􀂇 Financial Statements  \n1.1 Introduction  \nAccounting is a process of identifying, recording, summarising and reporting economic information to decision makers in the form of financial statements. Financial statements will be useful to the following parties:  \n􀂇 Suppliers  \n􀂇 Customers  \n􀂇 Employees  \n􀂇 Banks  \n􀂇 Suppliers of equipments, buildings and other assets  \n􀂇 Lenders  \n􀂇 Owners  \n1.1.1 Types of Accounts  \nThere are basically three types of Accounts maintained for transactions :  \n􀂇 Real Accounts  \n􀂇 Personal Accounts  \n􀂇 Nominal Accounts  \nReal Accounts  \nReal Accounts are Accounts relating to properties and assets, which are owned by the business concern. Real accounts include tangible and intangible accounts. For example,  \n􀂇 Land  \n􀂇 Building  \n􀂇 Goodwill  \n􀂇 Purchases  \n􀂇 Cash  \nPersonal Accounts  \nPersonal Accounts are Accounts which relate to persons. Personal Accounts include the following.  \n􀂇 Suppliers  \n􀂇 Customers  \n􀂇 Lenders  \nNominal accounts  \nNominal Accounts are Accounts which relate to incomes and expenses and gains and losses of a business concern. For example,  \n􀂇 Salary Account  \n􀂇 Dividend Account  \n􀂇 Sales  \nAccounts can be broadly classified under the following four groups.  \n􀂇 Assets  \n􀂇 Liabilities  \n􀂇 Income  \n􀂇 Expenses  \nThe above classification is the basis for generating various financial statements viz. , Balance Sheet, Profit & Loss A/c and other MIS reports. The Assets and liabilities are taken to Balance sheet and the Income and Expenses accounts are posted to Profit and Loss Account.  \n1.1.2 Golden Rules of Accounting  \n\n|  | Real Accounts | Personal Accounts | Nominal Accounts |\n| --- | --- | --- | --- |\n| Debit | What Comes in | The Receiver | Expenses and Losses |\n| Credit | What Goes out | The Giver | Incomes and Gains |\n\n1.1.3 Accounting Principles, Concepts and Conventions  \nThe Accounting Principles, concepts and conventions form the basis for how business transactions are recorded. A number of principles, concepts and conventions are developed to ensure that accounting information is presented accurately and consistently. Some of these concepts are briefly described in the following sections.  \nRevenue Realisation  \nAccording to Revenue Realisation concept, revenue is considered as the income earned on the date, when it is realised. As per this concept, unearned or unrealised revenue is not taken into account. This concept is vital for determining income pertaining to an accounting period. It reduces the possibilities of inflating incomes and profits.  \nMatching Concept  \nAs per this concept, Matching of the revenues earned during an accounting period with the cost associated with the respective period to ascertain the result of the business concern is carried out. This concept serves as the basis for finding accurate profit for a period which can be distributed to the owners.  \nAccrual  \nUnder Accrual method of accounting, the transactions are recorded when earned or incurred rather when collected or paid i.e. , transactions are recorded on the basis of income earned or expense incurred irrespective of actual receipt or payment. For example, a seller bills the buyer atthe time of sale and treats the bill amount as revenue, even though the payment may be received later.  \nThe cash basis of accounting is a method wherein revenue is recognised when it is actually received, rather than when it is earned. Expenses are booked when they are actually paid, rather than when incurred. This method is usually not considered to be in conformity with accounting principles and is, therefore, used only in select situations such as for very small businesses.  \nGoing Concern  \nAs per this assumption, the business will exist for a long period and transactions are recorded from this point of view.  \nA","cbCairNXo390nmXo","https://ap.wps.com/l/cbCairNXo390nmXo","pdf",21293194,1192,"English","# Lesson 1: Basics of Accounting\n## Lesson Objectives\n## Introduction\n## Types of Accounts\n## Golden Rules of Accounting\n## Accounting Principles, Concepts and Conventions\n## Double Entry System of Book Keeping","[{\"question\":\"What is the purpose of accounting in this lesson?\",\"answer\":\"Accounting is described as a process of identifying, recording, summarising, and reporting economic information to decision makers in the form of financial statements.\"},{\"question\":\"What are the three types of accounts and how do they differ?\",\"answer\":\"The lesson lists Real Accounts (assets and properties), Personal Accounts (persons such as suppliers, customers, lenders), and Nominal Accounts (income, expenses, gains, and losses).\"},{\"question\":\"How does the double entry system work?\",\"answer\":\"Each transaction has two aspects: debit (receiving) and credit (giving), and every debit has a corresponding credit. The system affects two accounts and helps verify accuracy through trial balance.\"}]","Lesson 1 - Basics of Accounting | PDF",1792889317,3004]