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Tuesday, March 17, 2009

Accounting System

Accounting system is the system in which all the transaction relating to account is kept in a systematic manner. The simple systematic manner may be posting in day book. After that posting in journal voucher, ledger and sub-ledger, preparation of trial balance, preparation of profit/ loss account or income / expenditure account and finally preparation of final statement.

The development of accounting system took many years and many generation to this state. In previous generation, accounting concept was very limited but now a days it is too broad. In the development and requirement of actual accounting and financial position, people think to develop new concept of recording business transactions. Hence Single Entry Book-keeping was develop. Due to the limitation of single book-keeping system, Double Entry Book-keeping system was developed. Now a days almost all business transaction are recorded in the principle of double entry book-keeping system.

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