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Winning Notes - Accounts - Basics1
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Winning Notes - Accounts - Basics1

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Finance for Non-finance Executives - Start with knowing the basic accounts

Finance for Non-finance Executives - Start with knowing the basic accounts

Published in Business , Economy & Finance
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  • 1. CA - Accounts basicsAccounting
    www.WinningNotes.com
  • 2. Agenda
    2
    Introduction
    Book Keeping
    Advantages of Book keeping
    Accountancy, Accounting and Book keeping
    Branches of Accounting
    What more is in store
  • 3. Introduction – Book Keeping
    3
    Book-keeping is that branch of knowledge which tells us how to keep a record of business transactions.
    Those transactions related to business which can be expressed in terms of money are recorded
    As per R.N. Carter - “Book-keeping is the science and art of correctly recording in the books of account all those business transactions that result in the transfer of money or money’s worth”.
    The objective of book keeping is to keep a record of all the business transactions to enable calculation of Profit & Loss and Assets and Liabilities of the business.
  • 4. Advantages of Book Keeping
    4
    Permanent and Reliable Record keeping
    Arithmetical Accuracy
    To know the Profit or Loss of business correctly
    Ascertainment of Financial Position to plan for the next year as well
    Ascertainment of the Progress of Business
    To know how much he has to pay others and how much to receive.
    Keep a check over assets and evaluate them every year
    To keep control over liabilities
    To ensure proper records for taxation and management purposes
    To maintain legal records
  • 5. Accounting
    5
    American Accounting Association defines accounting as “the process of
    Identifying
    measuring and
    Communicating economic information
    to permit informed judgments
    and decision by
    users of the information”.
    An accounting cycle is a complete sequence of accounting process, that begins with the recording of business transactions and ends with the preparation of final accounts
    Business transaction  Journal  Trial Balance  P&L Account  Balance Sheet
  • 6. Accountancy, Accounting & Book Keeping
    6
    Accountancy- systematic knowledge of accounting. Why and how to prepare the books of accounts
    Accounting– actual process of preparing and presenting the accounts.
    BookKeeping– record keeping or maintenance of books of accounts
    Users of Accounting –
    Internal Users - owners, management, employees
    External Users – creditors / lenders, investors, banks and other lending institutions, present and potential investors, Government, tax authorities, regulatory agencies and analysts and public at large.
  • 7. Branches of Accounting
    7
    Financial Accounting - recording of business transactions to know the operating result (profit or loss) of a particular period and financial position (Balance Sheet) on a particular date can be known.
    Cost Accounting – to know the cost of material, men etc in a certain manner
    Management Accounting – use of accounting information by management for planning, strategy formulation and decision making by the management.
  • 8. What’s more
    8
    Basic Accounting Terms – Closing stock, assets, liabilities etc
    Basic Accounting Concepts - matching concept, revenue realization
    Accounting Assumptions – going concern, accounting entity
    Accounting Standards
    Double Entry system of book keeping
    Questions and Exercises