Meaning, Definition and components of Commerce.

What is Commerce? |Meaning, Definition and components of Commerce.

Meaning of commerce

Commerce includes all those activities that facilitate the sale, transfer or exchange of goods and services. In other words, commerce refers to all those activities which directly or indirectly help in the distribution of goods to the end consumer.

As we all know that the production of goods will be of no use until these goods reach the final consumer. Goods are produced at one place and consumers are scattered at different places. Consumers are not aware of the type of goods the manufacturer produces. Goods are produced in large quantities and demanded by consumers in small quantities.

Commerce provides a means for the exchange and distribution of goods. It acts as a link between producers and consumers and thus bridges the gap between them.

It covers all those activities which are necessary to maintain the free flow of goods and services. Thus, all activities that remove barriers to the process of exchange are included in commerce. The constraints can be in relation to persons, place, time, risk, finance etc.

Components of commerce

There are two types of functions involved in commerce:

1. Trade.

2. Auxiliaries to trade.

1. Meaning of Trade.

Trade means buying and selling of goods with the aim of earning profit. It deals with the exchange of goods between buyer and seller.

2. Meaning of Auxiliaries to trade.

Activities undertaken to assist the business are known as ancillary to the business. These activities are generally referred to as services because they facilitate activities related to industry and trade. Transportation, banking, insurance, warehousing and advertising are considered ancillary to trade, that is, activities that play a supporting role.

Auxiliaries to trade includes the following:

1. Banking and Finance

2. Transport and Communication

3. Warehousing

4. Insurance

5. Advertising

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So Friends, in this blog, we have learned the meaning of commerce and the activities of commerce. Hope you enjoyed it. Don't forget to read and give feedback. Thank you🙏

वाणिज्य का क्या अर्थ है। Meaning of Commerce in Hindi. 

वाणिज्य का अर्थ

वाणिज्य में वे सभी गतिविधियाँ शामिल हैं जो वस्तुओं और सेवाओं के बिक्री हस्तांतरण या विनिमय को सुगम बनाती हैं। अन्य शब्दों में, वाणिज्य से तात्पर्य उन सभी गतिविधियों से है जो प्रत्यक्ष या अप्रत्यक्ष रूप से अंतिम उपभोक्ता को माल के वितरण में मदद करती हैं । 

जैसा की हम सब जानते है कि माल के उत्पादन का तब तक कोई फायदा नहीं होगा जब तक कि ये सामान अंतिम उपभोक्ता तक नहीं पहुंच जाते। वस्तुओं का उत्पादन एक स्थान पर होता है और उपभोक्ता विभिन्न स्थानों पर बिखर जाते हैं। उपभोक्ताओं को इस बात की जानकारी नहीं होती है कि विनिर्माता किस प्रकार की वस्तुओं का उत्पादन करता है। वस्तुओं का उत्पादन बड़ी मात्रा में होता है और उपभोक्ताओं द्वारा कम मात्रा में मांग की जाती है। 

वाणिज्य वस्तुओं के आदान-प्रदान और वितरण के लिए एक साधन प्रदान करता है। यह उत्पादकों और उपभोक्ताओं के बीच एक कड़ी का काम करता है और इस तरह उनके बीच की खाई को पाटता है।

यह उन सभी गतिविधियों को शामिल करता है, जो वस्तुओं और सेवाओं के मुक्त प्रवाह को बनाए रखने के लिए आवश्यक हैं। इस प्रकार, विनिमय की प्रक्रिया में बाधाओं को दूर करने वाली सभी गतिविधियों को वाणिज्य में शामिल किया जाता है। बाधाएं व्यक्तियों, स्थान, समय, जोखिम, वित्त आदि के संबंध में हो सकती हैं।

वाणिज्य के घटक

वाणिज्य में सम्मलित किर्याओं के निम्न दो प्रकारों हैं:

1. व्यापार (Trade).

2. व्यापार के सहायक ( Auxiliaries to trade).

1. व्यापार का अर्थ

व्यापार का तात्पर्य लाभ कमाने के उद्देश्य से वस्तुओं का क्रय-विक्रय करना है। यह क्रेता और विक्रेता के बीच माल के आदान-प्रदान से जुड़ा है।

2. व्यापार के सहायक  

व्यापार की सहायता के लिए की जाने वाली गतिविधियों को व्यापार के लिए सहायक के रूप में जाना जाता है। इन गतिविधियों को आम तौर पर सेवाओं के रूप में संदर्भित किया जाता है क्योंकि ये उद्योग और व्यापार से संबंधित गतिविधियों को सुविधाजनक बनाती हैं। परिवहन, बैंकिंग, बीमा, भण्डारण(Warehousing) और विज्ञापन को व्यापार के लिए सहायक माना जाता है, अर्थात, सहायक भूमिका निभाने वाली गतिविधियाँ।

व्यापार के सहायक में निम्न सम्मलित है:

1. परिवाहन एवं संचार (Transport and Communication)

2. बैंकिंग (Banking)

3. भण्डारण (Warehousing)

4. बीमा (Insurance)

5.  विज्ञापन (Advertising) 

दोस्तों इस ब्लॉग में हमने वाणिज्य का अर्थ और वाणिज्य की किर्याए को जाना। अगले ब्लॉग में हम व्यापार की सहायक किर्याओं को विस्तार से जानेंगे। आशा है आपको अच्छा लगा होगा। पढ़ना न भूले और राय अवश्य दें।  धन्यवाद🙏

Meaning and History of Double Entry System Of Accounting.

Meaning and Definitions of Double Entry System of Accounting.

This system of accounting is based on Dual Aspect Concept. According to this concept, there are two effects of every business transaction, which are on two different accounts on different sides. In any one account effect is recorded on the debit side and in the other account it is recorded on credit side. Thus for every Debit there is a Corresponding Credit. Hence, it is clear that as a transaction is recorded in two accounts it is called 'Double Accounting System.

Now we take a business transaction as example to understand it.

Purchased  a Table (Furniture) in business for cash.

Here we can understand that Table(Furniture) is coming  in the business and Cash is going out. 

As we discussed above. According to  Double Entry System, there are two effects of every business transaction, which are on two different accounts on different sides.

In above example also two Accounts are effected at different side Furniture is coming in therefore Furniture account will be debited  and  cash  is going out therefore Cash account will be credited.

Definitions

In the words of William Pickels, "The two fold effect of every transaction is recorded under double entry system - one part is of the one receiving and the second part is of the one giving, hence in every transaction one account is of the receiver and the other account is of the giver. The account of the receiver is debited and the account of the giver is credited."

Brief History of Double Entry System.

Experts of accounting believe that this system of accounting was discovered in 15th century. A monk resident of Venice, Lucas Pacioli is regarded as the father of this system. He 1494 he wrote a book in Italian named, 'De Computiset Scripturis, on double accounting system. This system was adopted by merchants of Italy and was called 'Italian System'. Later on this system was adopted in England and in 1543 'Houghold Castle' translated this book in English and it was printed in England. From then onwards English merchants have also started using it. Since then there have been many changes in this system. In the year 1795 an Englishmen Edward Jones published a book English System of Book-Keeping' with many amendments, where he introduced the use of Subsidiary Books, Trial Balance etc. Due to universal principles this system is widely used.

In brief, Double Entry System is most scientific method of recording business transactions. All business houses use this system. This system opens all types of accounts like personal, real and nominal. For every transaction there are two accounts involved, one account which receives some benefit is debited and the other account which gives benefit is credited. This system is also called as Mercantile System

Accounting Principles| Generally Accepted Accounting Principles GAAP.

Accounting Principles| Generally Accepted Accounting Principles GAAP| Assumptions and Concepts of Accounting.

Meaning of Accounting Principles.

Principles of accounting are those rules on the basis of which accountant prepares financial statements and accounts. Accounting Principles are those guidelines, through which accounting is made more practical and effective. It is necessary to follow principles of accounting for proper accounting and general acceptability of accounts throughout the world. 

In brief, "Accounting principles are guidelines for preparing financial statements and maintaining accounts to bring uniformity in the preparation and presentation of financial statements."

Classification of Accounting Principles

Accounting Principles can be classified into following three parts -

(1) Basic Assumptions or concepts of Accounting.

(2) Basic Principles of Accounting

(3) Modifying Principles of Accounting

In this blog we will discuss only Basic assumptions of Accounting and next two in next one.

Basic assumptions of Accounting.

Basic assumptions of accounting are the foundation on which the strong building of Accounting stands. These are those basic assumptions which are accepted and applied at the time of preparing financial statements.

The following four are considered as main assumptions -

(1) Assumption of Accounting Entity.

(2) Assumption of Monetary Measurement.

(3) Assumption of Going Concern.

(4) Assumption of Accounting Period.

1. Assumption of Accounting Entity- According to this assumption business is treated as separate from its owners. Transactions of the business with the owner are treated in the same manner as with the outsiders. Money invested by the owner is treated as liability and the amount withdrawn from the business is recorded in a separately opened drawings account. Separate business entity concept is applicable to all types of organisations whether sole proprietorship, partnership or company organisation.

2. Assumption of Money Measurement- According to this concept only those events or business transactions are recorded in account books which can be exactly measured in money. These events or transactions are expressed in different countries in their respective currencies, in India it is in terms of rupees. The transactions which are not of monetary nature have no place in account books.

3. Assumption of Going Concern- According to this assumption it is assumed that business will continue in future for indefinite period of time and will not be closed. As a result of this concept, accountants value the goods and assets not at the market price but at the cost price. In the same way depreciation on the assets is not calculated at its market price but on its cost price over the estimated useful life. Adjustments regarding outstanding expenses, prepaid expenses, accrued incomes and unearned incomes etc. are also made when the final account are prepared at the end of the year. Because accountant believe that business will continue in future also therefore these adjustments will be adjusted in future.

4. Assumption of Accounting Period- According to this assumption, final accounts should be prepared annually for a regularly running business. If period concept is not kept in mind then the profit or loss cannot be known properly. For business of short period, business period itself is treated as the accounting period.

Generally, accounting period is of one year. But this period depends upon the nature and object of a particular business. On the basis of accounting period concept, comparison of progress and financial position of the business with that of another period becomes possible. Various plans can be made for progress of business on the basis of annual comparison of cost of business, efficiency of business, profit of business.