Cost Concept

According to this concept, “an asset is ordinarily entered on the accounting record at eh price paid to acquire it”.

Revenues

It is a price of goods sold or services provided by a business to its customers. e.g. Sales, rent received etc.

Expenses

Expenses are the costs of the goods and services used up in the process of obtaining revenue e.g. Salaries, Insurance, rent etc.

Managerial Accounting

The object of this accounting is to communicate the relevant information periodically to the management of the business to enable it to take suitable decision.

Financial Accounting

The main purpose of financial accounting is to ascertain the true results (profit or loss) of the business operations during a particular period of time and to state the financial position of the business on a particular point of time.

Cost Accounting

The main object of cost accounting is to determine the cost of goods manufactured or produced by the business. It also helps the management of the business in controlling the costs by indicating avoidable losses and wastes.

Return Inwards

If a customer to whom goods have been sold finds that the goods are defective, unsatisfactory, below standard or not according to specification, he may return these goods to the seller. To the seller such return of goods is known as sales returns.