defination of Accounts and accounts classification

Financial transactions change the financial position of the business. By transaction sometime cash received sometime paid, sometime income earned sometime expense incurred, sometime asset increase sometime decrease, and again sometime liability increase sometime decrease. Income, Expense, Asset and Liability are not a particular type, there are different types of many such items in business organization. In a particular table/chart the income, the expense, the asset or the liability that is affected by transaction are recorded as per double entry system and it calculates the gross & net amount of that particular item. Accounts are prepared to know the continuous change and the net amount of each item. 

‘T’-Table
Account’s Title
Debit	Account’s code no……	Credit

Date	Particulars	J.F.	Taka	Date	Particulars	J.F.	Taka

‘Moving Balance’-Table

Account’s Title  Account’s code no…

Date	Particulars	J. F.	Debit  Taka	Credit  Taka	Balance
					Debit	Credit

Classification of Accounts

We can classify accounts very easily by analyzing the Accounting Equation (A=L+E)

Assets = Liabilities + Equity or Capital brought in by the owner + Assets

            = Liabilities + Income-Expense -Withdrawn by the owner 

By observing the above equation it possible to identify, that Accounts are five types.

1. Assets 2. Liabilities     3. Equity      4. Income 5. Expense

Role of accounting in creating sense of value and accountability

Value is the combination of long-term beliefs, thought, concept, and perception that unite a specific standard that helps people accepting the right and ignoring the wrong. Accounting helps creating value perception in the following manner:

1.      Exhibit of honesty and responsibility: If accounting methods are followed properly while keeping accounts, corruption, fraud, and misappropriation of assets could be kept under control thus ensuring clarity in keeping accounts.

2.   Debt repayment consciousness: Accounting plays a vital role in removing the mentality of becoming a defaulter of loan repayment. Therefore, it instills value perception of not becoming a defaulter.

3. Creating religious sense of value: Proper use of god-gifted resources and reducing unnecessary cost are part of religious value. If accounts are kept properly the concept of, ‘cut your coat according to your cloth’ can be hence practiced in both individual as well as institutional life.

4.  Responsibly towards society and state: The main sources of income of govt. are VAT, customs, excise and income tax etc. By utilizing the concept of accounting, accounts are recorded properly hence, the dodging of tax pay tendency reduces.

5.   Prevent fraud and forgery: If proper accounts are kept the chances of fraud and forgery among the officers and the staff reduces at a substantial amount. As such, they become cautious of misappropriation of funds and reduce anomalies.

Accounting in accountability:

If a specific responsibility is assigned to single person, he will only remain responsible for that job. Remain responsible to third party means accountability. The role of accounting is described in keeping this accountability into action:

a)      Internal accountability of the firm: In modern decentralized system, people are empowered for income, expense, and investment so that they may focus and concentrate in accumulating result to their higher authority for answering their various queries.

b)      Accountability towards owners, creditors, and investors: People involved in bookkeeping and management of a firm must make sure that the prepared statement gives a clear pen picture of the invested amount; the profit earned is in line with the invested profit. If found otherwise regarding economic accountability there can be a case of great anarchy in every economic and non-economic affair.

c)       Accountability towards Govt.: Concerned authorities of the Govt. have legal right to see whether govt. rules are being followed properly or not in industry. They need to see whether govt. tax, VAT, and duties are being paid accordingly. Keeping books of accounts properly ensures such accountability.