1) NON MONETARY TRANSACTIONS

For eg, A quarrel between the production manager and the sales manager will not be recorded since its monetary effect cannot be measured with a fair degree of accuracy.

2) PERSONAL TRANSACTIONS

For eg, Rent paid by the proprietor for his house from his own pocket will not be recorded in the books of accounts unless it is paid from the cash withdrawn from business.

Loss is a decrease in net incom that is outside the normal operations of the business.

For example, if a person buys some goods fot 1000 rs and due damage in some goods he sells them all to a retailer for 950 rs.

An expense is a cost used up in earning revenues in a company's main operations. ... Expenses also include costs used up during the accounting period such as interest expense, insurance expense, and depreciation expense.

For example a soap company spends money for the advertisement of the product to attract customers and earn profit.

Examples of current assets include:

• Cash and cash equivalents: Treasury bills, certificates of deposit, and cash
• Marketable securities: Debt securities or equity that is liquid
• Accounts receivables: Money owed by customers to be paid in the short-term
• Inventory: Goods available for sale or raw materials

Examples of fixed assets include: 

• Vehicles (such as company trucks)
• Office furniture
• Machinery
• Buildings
• Land

Any valuable thing which has monetary value and owned by a business, is its asset. In other words, assets are the monetary values of the properties or the legal rights that are owned by the business organisations.

Fixed Assets− These are those assets that are hold for the long term and increase the profit earning capacity and productive capacity of the business. These assets are not meant for sale, for example, land, building machinery, etc.

Current Assets− Assets that can be easily converted into cash or cash equivalents are termed as current assets. These are required to run day to day business activities; for example, cash, debtors, stock, etc.

Users may be categorised into internal users and external users.

(A) Internal Users

• Owners: Owners contribute capital in the business and thus they are exposed to maximum risk. So, they are always interested in the safety of their capital.
• Management: Accounting information is used by management for taking various decisions.
• Employees: Employees are interested in the financial statements to assess the ability of the business to pay higher wages and bonus.

(B) External Users

• Banks and financial institutions: Banks and Financial Institutions provide loans to business. So, they are interested in financial information to ensure the safety and recovery of the loan.
• Investors: Investors are interested to know the earning capacity of business and safety of the investment.
• Creditors: Creditors provide the goods on credit. So they need accounting information to ascertain the financial soundness of the firm.
• Government: The government needs accounting information to assess the tax liability of the business entity.
• Researchers: Researchers use accounting information in their research work.
• Consumers: They require accounting information for establishing good accounting control, which will reduce the cost of production.

improves efficiency -

this system is more efficient in comparison to the traditional system . the computers make sure speed and accuracy in preparing the records and accounts and thus increases the efficiency of employees.

Greater accuracy-

computerised accounting make sure accuracy in accounting records and statements . it prevents clerical errors and omissions in records.

facilities standardization

computerised accounting provides standardization of accounting routines and procedures . therefore it ensure standardization in the accounting records.

A Voucher in Accounting is a document , which provides the evidence of the occurrence of a transactions is called Voucher. Voucher is also called the Source Document . A voucher is also prepared to show the necessary details in respect of a transaction where there may not be any documentary evidence, particularly in respect of small transactions like petty expenses.

The three steps would be 
1. Reliability, i.e Verifiability,Faithfulness,Neutrality
2. Relevance, i.e, Timeliness
3. Understandability and Comparability.

Trade discount is referred to as the discount that is offered by a seller to the buyer of the product in the form of reduction in the price of the item.

Trade discounts are offered to increase the sales of the product and make the customers feel that they are getting the best offer. No accounts are maintained for keeping track of the discounts that are offered.

Cost Principle: According to this Principle, an asset is recorded in the books of accounts at its original cost comprising cost of acquisition and all expenditure incurred for making the assets ready to use.

This cost becomes the basis of all subsequent accounting transactions for the asset, since the acquisition cost relates to the past, it is referred to as Historical cost. Example: Machinery purchased for Rs. 1,50,000 in cash and Rs. 20,000 was spent on installation of machine then Rs. 1,70,000 be recorded as cost of machine in the books and depreciation will be charged on this cost. If market value of machine due to inflation has gone up to Rs. 2,00,000 then the increased value will not be recorded. This cost is systematically reduced from year after year by charging depreciation and the assets are shown in the balance sheet at book value (cost – depreciation).

Purchases Book records only the credit purchases of goods. Goods are things that are purchased or produced for resale in which a business deals. Purchase of assets or stationery is not meant for resale and will be held for a long term and increase the profit-earning capacity of the business over various accounting periods. Hence, transactions related to purchase of assets or stationery cannot be recorded in the Purchases Book. It will be recorded in the Journal Proper.