• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Accounting Mechanism
 

Accounting Mechanism

on

  • 4,430 views

its use full to students of management

its use full to students of management

Statistics

Views

Total Views
4,430
Views on SlideShare
4,428
Embed Views
2

Actions

Likes
0
Downloads
89
Comments
1

1 Embed 2

http://www.slideshare.net 2

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel

11 of 1 previous next

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
  • very good job
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Accounting Mechanism Accounting Mechanism Presentation Transcript

    • ACCOUNTING MECHANISM
    • Learning objectives:
      To understand the Accounting mechanism
      To understand the Double Entry system
      To understand the meaning of account and classification of accounts
      Conceptual frame work of Financial Accounting
      To know how to prepare the Final Accounts.
    • Double Entry System
      It recognizes that every transaction has a twofold effect.
      The method of writing every transaction in to two accounts, of these two accounts, one A/c is given ‘Debit’ while other one is given ‘Credit’ with an equal amount so that the Accounting Equation is always in balance.
      On any date
      Total Debits = Total Credits
    • The Recording Process
      The sequence of steps in recording transactions:
      Transactions
      Documentation
      Journal
      Financial
      Statements
      Trial
      Balance
      Ledger
    • ACCOUNTING MECHANISM
      Recording
      • Journalizing
      2. Classifying
      • Ledger preparation
      3. Summarizing
      • Balancing the ledger
      • Preparation of Trial Balance
      • Preparation of Profit and Loss A/c
      • Preparation of Balance Sheet
      4. Interpreting the results.
    • JOURNAL
      The book of original entry.
      Recording of entries in the journal is known as Journalising.
      Large Firms/Concerns maintain special journals also known as Subsidiary Books.
    • SUBSIDIARY BOOKS
      Cash Book:
      • Simple
      • Two column
      • Three column
      2. Purchase Book
      3. Purchase returns Book
      4. Sales Book
      5. Sales returns book
      6. Bills Receivable book
      7. Bills Payable Book
      8. Journal Proper
    • LEDGER
      It is set of all accounts.
      It contains a classified summery of all transactions recorded in journal.
    • ACCOUNT - MEANING
      An individual record of increases and decreases in an item that is likely to be of interest or importance.
      It is “T” shaped
      Debit is left side of “T” account
      Credit is right side of “T” account
    • Classification of Accounts
    • Rules of Double Entry System
    • Conceptual frame work of Financial Accounting
    • TRIAL BALANCE
      A statement of Debit and Credit totals or balances extracted from the various accounts in the Ledger.
      Objectives:
      • To facilitate the preparation of Final Accounts.
      • To check the arithmetical accuracy of the books.
    • CAPITAL AND REVENUE ITEMS
      Capital Expenditure:
      The benefit of which is not fully derived in one year but spread over several periods.
      Eg: Acquisition of assets, additions to fixed assets
      Revenue Expenditure:
      The benefit of which is derived in the year in which the expenditure was incurred.
      Eg: Raw material, Rent, wages and salaries.
    • FINAL ACCOUNTS
      Include preparation of:
      Trading and Profit and Loss A/c
      To know the operating performance of the business i.e.profitability.
      Balance Sheet
      To know the financial position of the firm on a particular date.