Accounting is the art of identifying, recording, classifying and summarizing in a significant manner and in terms of money transactions and events, which are, in part at least of a financial character and interpreting the result thereof.
Subsidiary books are the book of original entry and it is called primary records because the first entry of transaction is made in subsidiary books
Thus book-keeping means recording, classifying and summarizing business transactions systematically so that the businessman may be able to know his profit or loss during a specified period.
Business transactions refer to activities and events that affect the financial position of a business and are capable of being assigned monetary values. Business transactions are recorded in the books of the business and summarized in financial reports.
Goodwill means the good name or wide business connections or reputations earned by a businessman through his hard work and honesty. This helps the business to earn more profit.
A partnership is a form of business in which two or more but not more than twenty people own a business, it is based on a written contract or on an oral agreement.
When the business transactions are recorded in the books of accounts there remains a possibility of accounting errors. It may be because of hastiness in writing, negligence, oversight or incomplete knowledge of the principles of accountancy.
Betterment of fixed assets or improvement of an asset to produce more to improve its earning capacity or to reduce its operating expenses or to increase the life of asset.
Accounting principles = concepts + accounting conventions commonly known as GAAP (Generally accepted accounting principles) based on which financial statements are to be prepared. Accounting principles are divided into two parts, concepts, and conventions.