In simple way, we will understand what account is! Account is nothing more, it is a language of business. Business made in two terms- first term is expenses and second term is income. So  we define the term  business as a human activity under which goods are dealt in for profit making. There are also two types of business:

  • 1)  profit making— any business is done with a view to profit means busy ,
  • 2) non profit making— it is to be treated as not for profit organisation. It stands for NPO i.e. not for profit organisation is that business which is not done with a view to earning profit, its objectives have to provide services to society. We see for example — school, college etc.

By the  way, we will know about the language of business  in details – see  the examples for identifing the language of business-

  • 1. started business with captial rs 10000
  • 2.purchased goods from mohan rs 150
  • 3.  sold goods to mohan rs2000.
  • 4.sold goods to mohan for cash 1000
  • 5. diposited  in to bank rs 10000  .
  • 6 returns goods to mohan rs 1oooo
  • 7. returns goods from mohan rs 3000.
  • 8. salaries paid rs 2000 to mohan
  • 9. commission received.
  • 10. outstanding salaries.

It is to be treated as transactions in business.  Now we will know about features of business which are as follows:

  • 1. profit making
  • 2. business will not be done without risks
  • 3. profits and losses are borne by proprietor in a business.
  • 4. joint family hindus business is done by karta, karta is the head of family when karta is dead by accident than his son enjoys rights in a business
  • 5) secrecy is the key to success a business.
  • 6 )license is must in a business.
  • 7) self confidence
  • 8)performance of performance in a market .
  • 9) competition of market
  • 10) unlimited liabilities(sole proprietor has unlimited liabilities,partners have unlimited liabilities
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