Accounting system intro and accounting system of reliance industries
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Accounting system intro and accounting system of reliance industries

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Accounting system intro and accounting system of reliance industries

Accounting system intro and accounting system of reliance industries

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Accounting system intro and accounting system of reliance industries Accounting system intro and accounting system of reliance industries Presentation Transcript

  •  The systematic recording, reporting, and analysis of financial transactions of a business.  The person in charge of accounting is known as an accountant, and this individual is typically required to follow a set of rules and regulations, such as the Generally Accepted Accounting Principles.  Accounting allows a company to analyze the financial performance of the business, and look at statistics such as net profit.
  • Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management. The art lies in selecting the information that is relevant to the user and is reliable.
  • The name given to the collective process of recording and processing the accounting events of a company. The series of steps begin when a transaction occurs and end with its inclusion in the financial statements. The nine steps of the accounting cycle are:          Collecting and analyzing data from transactions and events. Putting transactions into the general journal. Posting entries to the general ledger. Preparing an unadjusted trial balance. Adjusting entries appropriately. Preparing an adjusted trial balance. Organizing the accounts into the financial statements. Closing the books. Preparing a post-closing trial balance to check the accounts.
  • ۶ JOURNALS The general journal is where double entry book keeping entries are recorded by debiting one or more accounts and crediting another one or more accounts with the same total amount. The total amount debited and the total amount credited should always be equal, thereby ensuring the accounting equation is maintained.
  • ۶ LEDGER The final destination of all entries made in the journal is the ledger as they are all subsequently transferred to it. The ledger is the most important book under the double-entry system. Ledger is a permanent book of record, which contains all accounts relating to the financial transactions of a business. Therefore, it is also called the book of accounts. An account contained in the ledger book is called ledger account. A ledger account is a statement shaped liked an English alphabet 'T' that systematically contains all financial transactions relating to either a particular person or thing for a certain period of time.
  • ۶ TRIAL BALANCE A book keeping worksheet, in which the balances of all ledgers are compiled into debit and credit columns. A company prepares a trial balance periodically, usually at the end of every reporting period. The general purpose of producing a trial balance is to ensure the entries in a company's bookkeeping system are mathematically correct. The aggregate of all debit and credit balances at the end of an accounting period: i. Shows if the general ledger is in balance (total debits equal total credits) before making closing entries. ii. Serves as a worksheet for making closing entries, and iii. Provides the basis for making draft financial statements.
  • ۶ FINAL ACCOUNTS Final accounts is done at the end of the year to find whether the company status is in profit or loss. Initially Companies prepare trading and profit & loss accounts and then if required ledgers and individual accounts, which shows the monetary transactions of company and then the last step will be preparation of balance sheet.  PROFIT ‘n’ LOSS STATEMENT A financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time - usually a fiscal quarter or year. These records provide information that shows the ability of a company to generate profit by increasing revenue and reducing costs. The P&L statement is also known as a "statement of profit and loss", an "income statement" or an "income and expense statement".
  • • BALANCE SHEET A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders. The balance sheet must follow Assets = Liabilities + Shareholders' Equity the following formula:
  •  Reliance Industries Limited (RIL) is an Company, headquartered in Mumbai, Maharashtra. Indian  The company operates in five major segments: Exploration & Production, Refining & Marketing, Petrochemicals, Retail and Telecommunications.  RIL is the second-largest Publicly traded company in India and also the second largest company in India by revenue after Indian Oil Corporation.  The company is ranked 107th on Fortune Global 500 list of the world's biggest corporations for the year 2013.  It contributes to approx. 14% of total exports of India.
  •  Basis of Preparation of Financial Statements The financial statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.  Use of Estimates The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known.
  •  Intangible Assets All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized.  Depreciation Depreciation on fixed assets is provided to the extent of depreciable amount on written down value method (WDV) at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 over their useful life except, on fixed assets pertaining to refining segment.  Foreign Currency Transactions Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.
  •  Investments Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost.  Revenue Recognition Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, service tax, excise duty and sales during trial run period, adjusted for discounts (net), Value Added Tax (VAT) and gain / loss on corresponding hedge contracts. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
  •  Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. Employee Benefits (i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered. (ii) Post employment and other long term employee benefits are recognized as an expense in the Profit and Loss account for the year in which the employee has rendered services. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Profit and Loss account. 
  • Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Sources of funds Owner's fund Equity share capital 3,229.00 3,271.00 3,273.37 3,270.37 1,573.53 Share application money 25.00 - - - 69.25 Preference share capital - - - - - 1,76,766.00 1,59,698.00 1,42,799.95 1,25,095.97 1,12,945.44 2,422.00 6,969.00 10,571.21 11,670.50 10,697.92 52,101.00 51,658.00 56,825.47 50,824.19 63,206.56 2,34,543.00 2,21,596.00 2,13,470.00 1,90,861.03 1,88,492.70 1,87,607.00 2,09,552.00 2,21,251.97 2,15,864.71 1,49,628.70 - 3,127.00 5,467.00 8,804.27 11,784.75 Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve
  • Less : accumulated depreciation 77,859.00 91,770.00 78,545.50 62,604.82 49,285.64 1,09,748.00 1,14,655.00 1,37,239.47 1,44,455.62 88,558.31 Capital work-in-progress 19,116.00 4,885.00 12,819.56 12,138.82 69,043.83 Investments 52,509.00 54,008.00 37,651.54 23,228.62 21,606.49 1,37,138.00 1,18,550.00 91,722.78 62,622.05 54,959.78 Less : current liabilities & provisions 83,968.00 70,502.00 65,963.35 51,584.08 45,675.71 Total net current assets 53,170.00 48,048.00 25,759.43 11,037.97 9,284.07 Miscellaneous expenses not written - - - - - 2,34,543.00 2,21,596.00 2,13,470.00 1,90,861.03 1,88,492.70 Book value of unquoted investments 32,551.00 23,339.00 22,377.26 15,563.83 18,927.65 Market value of quoted investments 20,789.00 31,439.00 15,839.31 8,248.22 2,930.63 Contingent liabilities 54,600.00 45,831.00 41,825.13 25,531.21 36,432.69 Number of equity sharesoutstanding (Lacs) 32286.63 32710.59 32733.74 32703.74 15737.98 Net block Net current assets Current assets, loans & advances Total Notes:
  • How accounting information is useful to the company Many factors affect the structure of the accounting system within a particular organization. Among the most important are (1) the company’s needs for accounting information and (2) the resources available for operation of the system. Uses of accounting system in the company:       To keep a systematic record. To ascertain the operational profit and loss. To protect business properties. To ascertain the financial position of the company. Replacement of memory. Evidence in the court.
  • ACCOUNTING AS AN INFORMATION SYSTEM
  • In developing information about the activities of a business, every accounting system performs the following basic functions:  Interpret and record the effects of business transactions.  Classify the effects of similar transactions in a manner that permits determination of the various totals and subtotals useful to management and used in accounting reports.  Summarize and communicate the information contained in the system to decision makers.
  • Why study Accounting? • Accounting provides information for decision making. • Almost every business and organization needs accountants to measure performance and provide information for decisions. What will you Learn? • You will learn how to present financial statements that can be used to assist business planning and decision making. • You will also learn financial analysis techniques. • At postgraduate level, you will cover more advanced subjects and methods to enable you to further develop your skills, knowledge, and career options.
  • Areas of Study There are two areas of study:  Financial Accounting and Management Accounting. • Financial accounting involves consideration of the presentation of financial statements and techniques for their analysis. • Management accounting explores the use of accounting data for managerial planning, decision making, and control.