What's up everyone welcome back to the channel. Guys, this is day seven of our 100 days commerce master class for class 11th and in seven days we have covered Accounts, Business Studies, Economics etc. Today is Friday. There was a marriage at my house for the last two-three days so I was not available. I told you in the community post that I will not be there for two-three days. But now everything is over. The functions are over. So now it's time for our real function. Let's start studying. Today children, we will do chapter number one, which is a theoretical chapter in accounts, because now you have learnt the basic terms, so it will be easy for you to learn it. So let's get started quickly. The chapter will take two parts today and one will be completed in the next class. Let's begin. So look my dear children what is the name of chapter number one? The Meaning and the Objectives of Accounting. This accounting that we are going to do, this subject of ours is accounting, what does the accounting that we do within it mean? Why do they do this ? We are going to try to understand this in great detail. So let's start quickly. The first topic is The Meaning of Accounting. What is the meaning of accounting? Now look children, before starting accounting, we will understand book keeping. First of all we will understand bookkeeping. Then we will understand accounting and then we will understand accountancy which is your subject. Ok? The first is bookkeeping. The second is accounting, the third is accountancy? Sir, what is this? What is this bookkeeping? What is this accounting? And what is this accountancy? Let's start with bookkeeping. First. What does bookkeeping mean, kids? Here book means account and keeping means keeping. So basically book keeping means keeping account of whatever has happened, whatever money has been transacted, in a copy. This is what we call bookkeeping. Very very very simple. Children, even if there is a fruit seller who is running a small train. Be it a paan seller who has a small store under a tree. There is a stall. Be it a departmental store, be it a confectionery store, be it a bakery. Everyone keeps their own transactions and accounts, right? Every person tries to write down if he has to take money from someone. If I have to give money to someone, I should know that. What properties do I have, what assets do I have, what liabilities do I have? Now I have explained assets and liabilities to you in basic terms. That's why I always teach that first. So whenever you do any business , whenever you do any trade, you want to keep accounts. How will we know how much money is coming in and how much money is going out ? So in a simple copy there are no rules, no debits, no credits, nothing. When you write accounts in a simple copy, write plus minus, write how much came, how much went, we call it book keeping. What do we say to him, children? Let's call it book keeping. Now you do not need any specialized knowledge or specialized skills to do bookkeeping. Anyone can keep this much account, friend. Even an illiterate person can maintain such a large amount of accounts, even one who does not know anything about accounting can do so. So you don't need any special extra knowledge to keep accounts. No such senior staff is needed. A basic individual can keep accounts. But when we keep this calculation in a systematic manner. Keep it in a proper systematic manner with rules. Where we record everything on double side so that it comes and goes. How much came, how much went. What came to whom, what went from whom? Now imagine I bought a camera worth ₹1 lakh. So 1 lakh rupees went out of my pocket. The cameraman found ₹1 lakh in his pocket. So ultimately, will both of them be equal or not? So what do we call accounting? When you maintain books, you do it in a systematic manner with certain rules and not just maintain books. You also have to analyze them. You also have to interpret them. You also have to report to him, not just keep accounts, basically. I have to see them and also understand them. They also have to be interpreted whether profit is coming or loss is coming. How can I take good decisions with this, how can I do policy making with this. So the next step from bookkeeping to more detailed bookkeeping is that you need any basic staff to do the bookkeeping. But to do accounting, a knowledgeable person is required. Who has knowledge of accounts. Who knows the rules. So what is accounting? It is the elder brother of bookkeeping which we do in a more detailed and proper way and in which not only accounting is required but analysis should also be done along with accounting. Interpretation should also be available. Reporting should also come. Only then will we know whether the business is doing well or not. This is what we children call accounting. So the first stage is bookkeeping. The second stage is accounting. Now these accounting rules, which I am repeatedly telling you, how will the accounting be done? What about in debit? What's in the credits? Debit what? Credit what? What is this single entry? What is double entry? Children, when you study these rules, when you learn these rules, it is called accountancy. That's why you should check your book. The name of that book is not Bookkeeping. The name of that book is not Accounting. The name of that book is Accountancy. Accountancy is basically the study of accounting. You are being taught accounting, children. Did you understand? Is it perfect? So if you talk about bookkeeping then it is the primary stage, if you talk about accounting then it is the secondary stage. This is the actual work. But when this work is taught, it is called accountancy. Did you understand? Great sir. It will be fun only if you write each thing one by one. Write down each thing one by one and move on. Now look what is given here? Accounting is often called the language of business. Because only in this you will see and understand. That's what I said, analysis has to be done, interpretation has to be done, that is, it has to be explained and reporting has to be done. Isn't it ? Accounting is the science of recording, classifying, business transactions and events of a financial character. Financial character means there must be some kind of money transaction within it. and The Art of Making Summaries. After that we will make a summary of whether there was profit or loss from it or how we can make policies from it. How Better Can Work. Isn't it? Analysis, interpretation of those transactions so that we can make the best decisions so that we can grow our business in the best possible way. Did you understand ? This is a great definition. You have to learn the definition of accounting well. Ok? Now let us come to the characteristics of accounting, what are the characteristics of accounting ? What are the features of accounting? How can we study accounting? So look children, first of all we will say that accounting is an art. There is a science behind it. Accounting art means art. What does art mean, children? Art means art. Art and science mean science. You already understand science. Isn't it? Now Sir, how is accounting both a science and an art? Children, first of all why is accounting a science ? Science exists because what does science even mean ? Science means some certain fundamental principles. Science means some certain fundamental rules which we study and follow. Science means knowledge. What is the meaning of science? Knowledge. You tell me, to do accounting also, it is necessary for you to have some rules, some knowledge, some wisdom, only then you will be able to do accounting, if you do not have knowledge then how will you be able to do accounting, so I am comparing it with science because I am saying that just like there is theory, knowledge and wisdom in accounting, similarly there is theory, knowledge and wisdom in accounting, both are the same thing, we will say that accounting is also a science. Isn't it ? But when an accountant does accounting, he is an accountant. Isn't it ? Everyone must know CA as Chartered Accountant. So when an accountant uses that particular knowledge, when he does analysis, when he does interpretation , it is different for everyone. One accountant looks at the books in one way , another accountant looks at the books in another way. So every person has his own art of reading books. That is why we say that accounting has the characteristics of science as well as the characteristics of art. So look what is written? Accounting is an art. How is someone recording? How is someone classifying, how is someone summarizing? Because as you read further chapters, you will see that you will have to take individual decisions. Individual judgment will have to be made. So accounting is also an art. And why is accounting a science? Because any body of knowledge which is based on certain specified principles is called science. Same is the case in accounting. Isn't it? So what even is accountancy? There is a science. Since it is also an organized body of knowledge. So what will you say? Accounting is an art as well as a science. Secondly, children, when we do accounting, we will record all the financial transactions. Financial transactions mean wherever there is a transaction of money, wherever there is talk of finance. So in accounting, first of all, it is both a science and an art. Secondly, all transactions of financial nature will be recorded in it. Thirdly, all transactions will be recorded in children's money terms. That means you are buying the goods in kg , litre, metre , centimetre, gram or whatever in pieces. Accounting doesn't care. Accounting will ask, tell me how much? How many rupees? How many rupees? How many rupees? How many rupees? So we will always talk about everything in money terms. Everything is going to be in terms of money. Now you have come into commerce. Here you just have to study money in a good way. Understood? So recording in terms of money. Fourth, we classify children under this. Classifying means that transactions of similar nature are recorded in similar places. For example, I will classify from whom I have to take money and to whom I have to give money. So the debtor's accounts will be made separately. The creditor's accounts will be prepared separately. The debtor is the one from whom the money is to be taken. The creditor is the person to whom the money is owed. So we will classify all the daters on one side. All creditors will be classified on one side. This is the art of recording, isn't it? There was nothing like that in bookkeeping. You were writing the same thing in book keeping. In accounting, you properly classify who are the debtors, who are the creditors, what are my assets, what are my liabilities? So the classification is proper inside it so that anyone can read it. There is no confusion chaos. So, it is written , after recording the transactions, the transactions are classified. Classification is the process of grouping the transactions of similar nature at one place. Then we also make a summary. Summary means that now we have also created a final result net summary. How is a summary made? For example, I had to collect ₹1 each i.e. ₹100 from a total of 10 people. So when I calculate the debtor, I have to take a total of ₹1 lakh. And in a year six people donated ₹1 each to ₹100. So in the ₹1 Lakh - 60 summary I will write at the end that now I just have to take 40. I had to take Rs 1 lakh at the beginning of the year. But when the year ends I will make a summary. I will make a crux of it. I write there that brother, there is summary in 40 last. So you don't have to spend the whole lot. You won't have to do plus or minus later. You can see what the final is from the summary itself. So we also take out the summary in this. They also do interpretation. What interpretation means is that we also arrive at the final results, whether there was a profit or a loss. For this we create different accounts. Like trading account, profit and loss account. You will mainly learn all this later. Now just understand that in accounting you also do interpretation and at the end you communicate. Who do you communicate with? To the users. Like the owners. Brother, you are an accountant, right? You are making books. Who will be the users? There will be management, owners and investors. If you have taken a loan from the bank, the banker will also be interested to know how the business is doing. So all the accounting users, we are going to read in detail about the users further. You will have to tell them all too. You will also have to communicate to all of them what the results have been. So all this happens in accounting, children. Ok? So what are the features of accounting? There is science and there is art, financial transactions will be recorded. There will be records in money terms, they will also classify and summarize. Interpretation and Communication. Now let us come children, what are the objectives of accounting? Why do we do accounting? Why are we reading? Basically why are you working so hard ? Why did we take commerce? Look children, your first purpose is to study money, to study finance. Only then will you get proper information. So why are we doing accounting? So that we can keep a systematic record. It's not like anything is written anywhere. Press a button on the PC and all the calculations will be displayed. In a systematic manner because you all will study on the computer also. Yes, okay. You are currently reading with a copy and pen. This is a little flaw in our education system. Brother, when everything is made on PC then it should be taught on PC. But okay, once you learn the rules then you will be able to learn further computerized accounting also. So first of all its work is to keep systematic records. Keeping complete records of every transaction. What is the second job ? To calculate the profit and loss. You should know whether the business is making profit, there is gain, there is loss, what is happening? You are doing business, putting in your full efforts , investing money, investing time, making profits, making losses. Who will tell? Accounting will tell. What is the third thing? To know the exact reasons. Brother, if there is loss then what is the reason for it? Why are you not able to come? Which costs more ? When you analyze, you check all the expenses. You check the liabilities. Do you see if the interest rate is increasing? Why are we going to Los ? Why is the profit margin not coming? What is the reason? All this can also be found out in accounting. That is why chartered accountants have value. He will read and analyze everything and tell you that this is wrong. You have to correct this. Right? What is the fourth one? To assert the financial position. Now children, see, profit and loss are part of profitability. What does position mean? Position means what assets do you have? What are the liabilities? Take care of your children in your financial position. We read about assets. We read about liabilities. So when you read assets and liabilities, you will be interested in knowing the financial position, how much is my wealth? Like we say, brother, Ambani's net worth is basically this much. So how does that net worth come out ? Net worth is calculated children, the amount of money that is assets minus the liabilities that are to be paid as loan. So, in this way you calculate the net worth of anyone. So, what you read, Ambani 's net worth is this much, Adani's net worth is this much, what is your net worth? This net worth is not determined by the profit of one person, you useless people, listen to this now, that is why you are going to read that net worth is determined by assets minus liabilities. Understand, you will learn all this. Great, after that what is the work, to see the progress of accounting, whether the business is growing or not. Is it moving forward or not moving forward. Are sales increasing every year or not? To see whether the income is increasing or not. After that, if there is any mistake, error or any fraud is happening, catch it. Here we also learn how we can catch errors and frauds. This is also your job. You will audit further. Audit means you will check whether the book is prepared correctly or not. So there is no error or fraud happening. It is also your responsibility to provide information to various parties. Now I told you earlier about many parties that there are many users like investors, owners, creditors, bankers, employees, give details to all of them about how your business is doing? So how will you give those details? You will give it only if the accounting is done. Isn't it? So these are all the objectives of accounting, children. Keeping systematic records, calculating profit and loss, finding out the reasons why profit loss is happening, how is it happening? Looking at the position, how many assets and how many liabilities are there? Checking progress, detecting errors and frauds. So you can remember any four points. There will be no theory question of more than four marks in your exam. Is it done? Perfect sir. What is the matter, sir? We also learned the meaning. We also learned the features. We also learned the objectives. What next? Then there are the functions. I will teach you the functions tomorrow. First of all understand bookkeeping. Now what was bookkeeping ? I told you about bookkeeping. It is the art of recording business dealings. Just how do you record what transactions are taking place in the business ? What kind of dealings are taking place, what kind of deals are being made , where is the money coming and going? Just want to see this. This is what we call bookkeeping. It is mainly concerned with record keeping. That's it brother, its only job is to keep records. Is it correct or not? Take a screenshot of it. Done. Now see what is accounting? Accounting starts where bookkeeping ends. Wherever bookkeeping ends, brother, there are things more important than accounting, accounting will start there. That means summarizing, analyzing, interpreting, communicating. It's all in the accounting. Bookkeeping is simply keeping accounts. No one is summarizing, no one is analyzing , no one is interpreting, no one is doing anything. Just keeping accounts. So so sorry. The elder brother is in accounting. Younger brother is a bookkeeper. And what is the knowledge required to do accounting called ? Accountancy. Accountancy is a systematic knowledge of accounting concerned with principles and techniques which are applied in the accounting. Did you understand? So what do we call the study of the principles and rules that are being applied in accounting ? Accountancy. Nice, did you understand? What is the matter, sir. Very true. There is a difference between bookkeeping and accounting. Come on sir, let's read this. After this we will do the rest of the things tomorrow. This is all you have to remember today, children. It's your homework. Whatever theory I teach, keep memorizing it every day. Only then will the preparation be good. So these topics should be ready today. Meaning, Features, Objectives, Bookkeeping, Accounting. I have taught you five topics. Correct? See what all will come in bookkeeping? Identification of transactions. If it is of financial nature then it will have to be done. Measure them, record them and classify them. That's all the work involved in bookkeeping. What will happen in accounting? Along with bookkeeping, summarizing, analyzing, interpreting them in detail and communicating them. All those people who want to know that thing, all those people who are interested in that thing, all this is the work of accounting. So where this ends, this begins. That is why it is called the primary stage. This is called the secondary stage. Will you remember? What is objective? Of bookkeeping? Just keep accounts. Systematic record keeping. What is its objective? Not just keeping records. I also have to take out the profit. I want to see this too. I am not going to lose. What are my assets and liabilities? I want to see this also , I want to see the net worth also. So its objective is a little broad. This is a small topic. Bookkeeping is a routine task. anyone can. Accounting is an analytical function. Analytical means it has to be done properly with proper date wise rules. Carelessness will not work in this. Ok? Who can do this? Junior staff can also do it. Senior staff is required for this. Not everyone can do this. In this, one has limited level of knowledge and knows a little bit of reading and writing. You will do it. A proper higher level of knowledge is required in this. Children need more knowledge than bookkeeping. Isn't it ? After that he is telling the children that a bookkeeper does not need any analytical skills. He can make the calculation anytime. But the accountant should have proper analytical skills, proper knowledge of how to maintain day wise records and everything else. So son, there is a difference between bookkeeping and accounting. I hope Babu that you have understood all these things well today and you have understood it very well. We will finish this in the next class. The chapter will end. It is not a very big chapter. But understanding is variant. If you don't understand it, you won't enjoy it. Proceed with understanding. Read the terms, understand this after the terms. Relate everything. And I believe that children should be taught practical things first. Then they will understand the theory well. So that is why as you study the practicals further, you will understand this chapter well in your mind that this is what is there here. Well here it is. Isn't it ? So do each thing one by one in a good manner. If you face any problem, let me know in the comment section. I'll cover that in the next video. fixed bugs? Thank you so much everyone for joining in. I'm gonna see you all very very very soon. Till Then See or Take Care. Bye, keep growing, keep glowing and keep smiling. And yes, do subscribe to the channel. Very useful content is coming for you. Thank you so much.