Accounting Concepts

Accounting Concepts

There are 2 types of accounting concepts:

1. Fundamental accounting concepts

2. Underlying accounting concepts.

Fundamental Accounting Concepts

There are five accounting concepts:

1. Going Concern Concept

The going concern concept implies that the business will continue to operate in the foreseeable future. A business is a going concern if it has no intention to discontinue its activities. Accounts are usually prepared under the going concern concept. In case a business is not a going concern, assets will be shown at the price at which they may be sold when the business closes down.

2. Consistency Concept

A business must choose a method to record its transactions which will show a more realistic view of the business. If a business chooses one method to record one transaction, the consistency concepts states that it should continue to use this method in the subsequent years unless the method does not show a realistic view or an another valid reason is given.

3. Prudence Concept

The prudence concepts states that all losses should be recorded in the books as soon as they are recognized, but gains and profits should not be recorded unless they are realized, that is, the business should get the profit or gain in reality. The aim of the prudence concept is to prevent profits from being overstated.

4. Matching Concept (Accrual Concept)

The matching concept states that net profit is the difference between revenue and expenditure incurred. That is;

            NET PROFIT = REVENUE - EXPENDITURE

The matching concept also states that if an expense is incurred in a financial year, then the expense should be included in the final accounts of that year itself, whether the expense has been paid or not.

5. Materiality Concept

The materiality concept states that only items which are material will be recorded in the books. There is no need for absolute precision on the books. For instance, a pocket calculator costing only $8 will not be considered as a non-current asset, although its useful life is 5 years.

Underlying Accounting Concepts

1. Historical Cost Concept

Under the historical cost concept, the assets are shown at their cost price.

2. Money Measurement Concept

Accounting information consists of only those transaction which have a monetary value to which most people will agree. The limitation of this concept is that accounting can never provide each and every information of the business. For example, it cannot show whether the business has problem with the workforce.

3. Business Entity Concept

This concept states that the business has separate existence from that of the owner.

4. Dual Aspect Concept

The dual aspect concepts states that every transactions should have two aspects, one debit and the other credit (Double entry system is applied).

5. Time Interval Concept

This concepts states that final accounts should be prepared at a regular time interval of one year.

Mohandas Karamchand Gandhi (Mahatma Gandhi)

Mahatma Gandhi is remembered in the world for four major virtues. They are non-violence, truth, love and fraternity. By applying these four virtues he brought freedom to India.

His full name was Mohandas Karamchand Gandhi. He was born in Porebandar of Gujarat on 2 October 1869. His father was an officer in charge of a Province. Mohandas married while he was reading in High School.

After passing the Entrance Examination he went to England to study law. M. K.Gandhi was not born great. He was an ordinary child like many of us. In the beginning he acted like a common child. He told lies only once in his life.

However, he corrected his bad habits very soon. He smoked cigarette only once. He took meat with his friend only once. All these things were done due to the influence of bad company in his childhood. One day he confessed all these bad deeds before his father and vowed not to repeat them.

M.K.Gandhi was much influenced by the character of the King Harischandra in the play entitled Raja Harischandra.

M.K.Gandhi completed his law in England and came back to India in 1893. He started his career as a lawyer. He supported the poor and truthful clients. He went to South Africa to deal with the cases of a famous merchant named Abdula Seth.

In South Africa he faced many hurdles. He discovered that the white men were ill treating the dark Indians there. He himself was tortured and insulted by the white often. One day, he was travelling in a first class compartment a train. He had booked a ticket for him. Still he was evented and punished out of the compartment by the white men.

On another occasion he wore a turban and attended the Court. But the judge who was a white man ordered him: to remove the turban because he was a coolie-lawyer. Gandhiji fought against this unjust and cruel treatment. He observed Satyagraha there and became successful.

In South Africa he built up his career as a Satyagrahi. He returned to India in 1915. In India he found similar unkind treatment by the white rulers. He started the Non-co-operation in 1930 and the Quit India Movement in 1942. During his struggle he applied no jealousy and violence against the rulers. Finally, he succeeded. The British Government granted independence to India.

Gandhi's style of living was very simple. He removed the caste barrier. He called the untouchables as the Harijan, the children of God. He was a reformer. He told the Indians to do manual labour. He advised the students of his time to read vocational subjects in order to be self-dependent. He also advised to introduce hand-spinning as a subject in educational institutions. He was a strong supporter of agriculture.

Gandhiji was a spiritual man. He spiritualised the politics. He was pained to find that many politicians had become greedy for power soon after independence. He earnestly appealed them to work for the development of the country. He also told the people to love and tolerate each other. He read the Gita, the Koran, the Holy Bible and all other scriptures.

The saddest thing for us is that Gandhiji died an unnatural death. He was shot dead by an Indian on his way to attend a prayer on 30 January, 1948. It was a cruel murder. His death was mourned all over the world. His body was cremated at Raj Ghat in New Delhi. We observe this day as the martyr day every year. Gandhiji was really a noble soul.

Definition of Demand

Demand refers to the quantity of a good which consumers are willing and able to pay for that good.

Bengali Rasgulla

Rasgullas are homemade cheese or paneer balls soaked in chilled sugar syrup. This recipe is made using a pressure cooker. Makes 12 rasgullas Ingredients: 4 cups milk 1/4 cup lemon juice 1 1/2 cups sugar 4 1/2 cups water Pressure cooker Method: Paneer: Mix lemon juice in half cup of hot water and keep aside. Boil the milk in a heavy bottomed pan over medium heat, stirring occasionally, making sure not to burn milk. As the milk comes to a boil, add the lemon juice gradually and stir the milk gently. The curd will start separating from the whey, turn off the heat. Once the milk fat has separated from the whey, drain the whey using a strainer line with cheesecloth or muslin cloth. Wrap the curd in a muslin cloth, and rince under cold water, and squeeze well. This process takes out the sourness from the lemon. To take out the excess water squeeze the cloth, or press the wrapped paneer under a heavy pan for about one hour.Taking the right amount of water out of the paneer is the most important part of this recipe. To check if enough water is out of the paneer, take a little piece of paneer on your palm and rub with your fingers. After rubbing the paneer for about 15-20 seconds, you should be able to make a firm but smooth ball. Once the paneer is drained, place on a dry, clean surface and knead the paneer for 3-4 minutes until the paneer is almost rolls into smooth soft dough. Knead the paneer by dragging the palm of your hand hard on the paneer. Keep scooping it back to togather and knead more. If the paneer is too crumbly, add a teaspoon of water. Your palm will be little greasy. Rasgulla: Divide the dough into 12 equal parts and roll them into smooth balls. To make the balls apply some pressure at the first and then release when forming the balls. Mix the sugar and water in a pressure cooker on medium high heat and bring to a boil. Add the paneer balls and close the pressure cooker. After the pressure cooker starts steaming, turn the heat to medium and cook for about seven minutes. Make sure the pressure cooker is large enough to accommodate the finished Rasgullas, as they will expand to about double in the volume while cooking in the syrup. Close the heat and wait a few minutes before you opening the pressure cooker. Pour cold water over the pressure cooker before opening. Rasgullas should be little spongy. After rasgullas are refrigerated the sponginess will reduce and will be soft in texture. Serve the Rasgullas chilled. Suggestions: If the Rasgullas don’t turn out exactly the way you want, they are hard or not the right shape, do not worry. There’re many ways to create new dish out of the imperfect Rasgullas! For example, if the Rasgullas are too hard or broken, try cutting them into small pieces and mix with soft vanilla ice cream or cover with melted chocolate. You can use the Rasgulla pieces to make kheer, replacing rice with the Rasgulla pieces. The bottom line is to enjoy your creation!

Basen Ladoo

Besan ladoos are rich, sweet dessert-snack made from gently roasted gram flour (besan). Ladoos can be served any time of the day. Traditionally in Indian households ladoos and burfis are served as cookies and chocolate. Recipe will make approximately 16 ladoos. Ingredients: 1 1/2 cups gram flour (basen) 2 tablespoons semolina flour (fine sooji) 1/2 cup unsalted melted butter (ghee) 3/4 cups sugar 4 tablespoons sliced almonds (badam) 1/4 teaspoons coarsely grounded cardamom seeds (ilaichi) For Garnish: 1 tablespoon melted butter or ghee 1 tablespoons sliced pistachios (pista) Method Put the basen (gram flour), sooji, and melted butter in a large frying pan and mix. Turn the stove on to medium heat and begin to roast the basen mixture until basen becomes light golden brown in color. Stir the mixture continuously with a spatula to prevent burning. Cooking on high heat will not allow the mixture to fully cook. When the color has changed you will also start to smell the sweetness of roasted basen. This should take about 7 to 10 minutes. Remove the pan from the heat and let the basen cool to a warm temperature. don’t let it become to room temperature. While the mixture is warm add and mix cardamom seeds, almonds, and sugar. To make the ladoos, take about 2 tablespoons of warm basen mixture into your palm. Gently press the mixture between your palms to form a smooth, round ball. The ladoos are usually about the size of a ping-pong ball, but you can adjust the as you prefer. When you have finished making all of the ladoos, take one ladoo at a time and dip the ladoo a quarter inch into melted butter or ghee. Then lightly touch the part of the ladoo with the butter into the sliced pistachios just enough so some pistachios stick to the ladoo. Put ladoos back on the plate with the pistachio side facing the top. Leave the ladoos on a plate to cool to room temperature before putting into a covered container. The ladoos can be stored in an airtight container for 2 to 3 weeks.

Banana Puri (Kela Ke Puri)

Banana Puries are delicious fried Indian puffed bread. Puries have richness of banana flavor enhanced with cardamom. Banana Puries are good for festive occasions and holidays. These can be served for breakfast or as a snack. Puries are especially good for picnic or to take for travel. This recipe will make about 40. Ingredients: 1/2 cup ripe mashed banana (about 8” long banana) 1/2 cup sugar 1 tablespoon melted ghee or butter 1/8 teaspoon crushed cardamom powder Pinch of salt 3 tablespoons coarsely ground almonds about 18 almonds Approx ¾ cup whole-wheat flour Approx ¾ cup all purpose flour Oil to fry Method Peel and mash the banana, add the sugar, almond, butter, salt and cardamom mix it well. Add whole-wheat flour and all-purpose flour to the banana mix and make a firm and smooth dough. Keep it aside for about 2 hours. Grease the fingers and knead the dough for a minute and divide in four equal parts. Roll them into 8” diameter and cut them in about 2” diameter, using a cookie cutter. Heat the oil in a frying pan on medium heat. To check the heat if oil is ready put one piece of dough in oil, dough should sizzle and come up slowly. Fry the puries few at a time don’t over crowd the frying pan. Puries will puff and fry them till they are dark brown from all around. It will take about 2 minutes to fry every batch. Take them out over paper towel so it can absorb the extra oil. Puries are ready. Notes:This is good recipe for vegan by replacing the butter with oil. Puries can be served hot or eaten at room temperature. Banana Puries can be stored for a week; you don’t need to refrigerate them.