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Explain accounting.
Accounting: It is an art of classifying and recording data. Now there data refers to transactions having monetary or financial values. As per to this, accounting is only an art and not a science. This contention is held due to the fact that the principles and rules of accounting are not based upon general truths and natural laws as any physical science or mathematical. Accounting has its own laws that apply equally well in same circumstances for similar business transactions.
Art of recording: It is an art of recording business transactions in the books of accounts in a systematic way soon after their occurrence. It is done in a book termed as 'Journal' and in other subsidiary books of accounts as Cash Book.
Art of classifying: Classifying is a process of entries of one nature or grouping transactions in one place. It is done by opening accounts in a book termed as 'Ledger'. To get the accurate idea of net effect of transactions already recorded in a journal or subsidiary books, they are subsequently processed and grouped. The same transactions relating to a particular account for a specified period are brought together. After that they are recorded at one place termed as ledger that classifies all transaction under different heads, expenses and persons.
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