I have made a PPT on introduction to accounting and basic accounts.. Pls check the enclosure.. Hope this will be useful for non-accounts student..

1. MEANING AND SCOPE OF
ACCOUNTING
1. Understanding – Meaning and Significance
2. Book-keeping and Distinction of accounting
with book-keeping
3. Evolutionary process of accounting as a social
science
4. Sub-fields of accounting
5. Identification of user groups
6. Functions or purposes of accounting data

2. MEANING AND SCOPE OF
ACCOUNTING
7. Relationship of accounting with Economics,
Statistics, Mathematics, Law and Management.
8. Limitations of accounting
9. Appreciate – accounting profession - ‘Chartered
Accountants’ role of rendering services to the
society.

3. DEFINITIONS
• The Committee on Terminology set up by the
“American Institute of Certified Public
Accountants” formulated the following definition
of accounting in 1961:
1. “Accounting is the art of recording,
classifying and summarising 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”.

4. DEFINITIONS
2. “The process of identifying, measuring and
communicating economic information to
permit informed judgments and decisions
by the users of accounts”.
• In 1970, the Accounting Principles Board (APB)
of American Institute of Certified Public
Accountants (AICPA) enumerated the functions
of accounting as follows:
3. “The function of accounting is to provide
quantitative information, primarily of
financial nature, about economic entities,
that is needed to be useful in making
economic decisions”.

5. DEFINITIONS - SUMMARY
• Thus, accounting may be defined as the process
of recording, classifying, summarising,
analysing and interpreting the financial
transactions and communicating the results
thereof to the persons interested in such
information.

6. PROCEDURAL ASPECTS
1. On the basis of the above definitions, procedures
of accounting can be basically divided into two
parts:
– Generating financial information
– Using the financial information
Procedure of Accounting
Generating Financial Using the Financial
Information Information
Recording Classifying Summarising Analysing Interpreting Communicating

7. GENERATING FINANCIAL
INFORMATION
1. Recording
2. Classifying
3. Summarising
4. Analysing
5. Interpreting
6. Communicating

8. EVOLUTION OF ACCOUNTING AS A
SOCIAL SCIENCE
1. In its oldest form accounting aided to discharge
their stewardship function. The wealthy men
employed stewards to manage their property
2. In the second phase, the idea of financial
accounting emerged with the concept of joint
stock company and divorce of ownership from
the management
3. Lastly, Social Responsibility Accounting is in the
formative process, which aims at accounting for
the social cost incurred by business as well as
the social benefit, created by it.
4. So, accounting is treated as a SOCIAL SCIENCE.

9. OBJECTIVES OF ACCOUNTING
1. Systematic recording of transactions
2. Ascertainment of results of above recorded
transactions
3. Ascertainment of the financial position of the
business
4. Providing information to the users of rational
decision – making
5. To know the Solvency position.

10. FUNCTIONS OF ACCOUNTING
1. Measurement
2. Forecasting
3. Decision – making
4. Comparison and Evaluation
5. Control
6. Government Regulation and Taxation.

11. BOOK - KEEPING
• Book – keeping is an activity concerned with the
recording of financial data relating to
business operation in a significant manner.
• OBJECTIVES OF BOOK – KEEPING:
i. Complete Recording of Transactions
ii. Ascertainment of Financial Effect on the
Business.

12. DISTINCTION BETWEEN BOOK –
KEEPING AND ACCOUNTING
BOOK – KEEPING ACCOUNTING
1. It is a process concerned with 1. It is a process concerned with
recording of transactions summarising of the recorded
2. It constitutes as a base for transactions
accounting 2. It is considered as a language
3. Financial statements do not of the business
form part of this process 3. Financial statements are
4. Managerial decisions cannot prepared in this process on
be taken with the help of the basis of book-keeping
these records records
5. There is no sub-field of book- 4. Management takes decisions
keeping on the basis of these records
6. Financial position of the 5. It has several sub – fields
business cannot be 6. Financial position is
ascertained through book- ascertained on the basis of
keeping records. the accounting reports.

13. SUB-FIELDS OF ACCOUNTING
1. Financial Accounting
2. Management Accounting
3. Cost Accounting
4. Social Responsibility Accounting
5. Human Resource Accounting

14. USERS OF ACCOUNTING
INFORMATION
1. Investors
2. Employees
3. Lenders
4. Suppliers and Creditors
5. Customers
6. Government and their agencies
7. Public
8. Management as whole is also interested in
the accounts for various managerial
decisions

15. RELATIONSHIP OF ACCOUNTING
WITH OTHER DISCIPLINES
1. Accounting and Economics
2. Accounting and Statistics
3. Accounting and Mathematics
4. Accounting and Law
5. Accounting and Management

16. LIMITATIONS
1. The factors which may be relevant in assessing
the worth of the enterprise don’t find place in the
accounts as they cannot be measured in
terms of money.
2. Balance sheet shows the position of the business
on the day of its preparation and not on the
future date.
3. Accounting ignores changes in some money
factors like inflation

17. LIMITATIONS
4. Certain accounting estimates depend on the
sheer personal judgment of the accountant.
5. Financial Statements only consider those assets
which can be expressed in monetary terms.
6. Different accounting policies for the treatment of
same item adds to the probability of
manipulation.
7. In nutshell, language of accounting has certain
limitations and the financial statements should
be interpreted carefully keeping in mind all
various factors influencing the true picture.

18. AREAS OF SERVICE
1. Maintenance of Books of Accounts
2. Statutory Audit
3. Internal Audit
4. Taxation
5. Management Accounting and Consultancy
Services
6. Financial advice
7. Other Services – Secretarial work, Share
Registration work, Company formation,
Receiverships, Liquidations, Arbitrations, etc.

19. CONCEPTS
1. Entity concept
2. Money measurement concept
3. Periodicity concept
4. Accrual concept
5. Matching concept
6. Going concern concept

20. CONCEPTS
7. Cost concept
8. Realisation concept
9. Dual aspect concept
10.Conservatism
11.Consistency
12.materiality

21. FUNDAMENTAL ACCOUNTING
ASSUMPTIONS
1. Going concern
2. Consistency
3. Accrual

22. QUALITATIVE CHARACTERISTICS
OF FINANCIAL STATEMENTS
1. Understandability
2. Relevance
3. Reliability
4. Comparability
5. Materiality
6. Faithful Representation
7. Substance Over Form
8. Neutrality
9. Prudence
10.Full, fair and adequate disclosure
11.Completeness.

23. ACCOUNTING POLCIES
1. Meaning of Accounting Polices.
2. Familiarise with the situations under which
selection from different accounting policies is
required.
3. Grasp the conditions where change in
accounting policies is required.

24. MEANING
1. Accounting policies refer to specific accounting
principles and methods of applying these
principles adopted by the enterprise in the
preparation and presentation of financial
statements.
2. Frequently encountered Accounting policies:
– Methods of depreciation, depletion and
amortisation
– Valuation of inventories
– Treatment of goodwill
– Valuation of inventories
– Valuation of fixed assets.
1. This is not exhaustive but is only illustrative.

25. SELECTION OF ACCOUNTING
POLICES
• Choice of Accounting Policy is an important
policy decision which affects the performance
measurement as well as financial position of the
business entity.
Selection of Accounting Policies
Based on
Prudence Substance over form Materiality

26. CHANGE IN ACCOUNTING POLICES
1. It is required by some statute or for
compliance with an Accounting Standard
2. Change would result in more appropriate
presentation of financial statement.

27. ACCOUNTING AS A MEASUREMENT
DISCIPLINE-VALUATION
PRINCIPLES, ACCOUNTING
ESTIMATES
1. Meaning of measurement and its basic elements
2. Accounting is a measurement discipline if
considered from the standpoint of the basic
elements of measurement.
3. Distinguish measurement with valuation

28. ACCOUNTING AS A MEASUREMENT
DISCIPLINE-VALUATION
PRINCIPLES, ACCOUNTING
ESTIMATES
4. Different measurement bases namely historical
cost, realisable value and present valuation
5. Measurement bases which can give objective
valuation to transactons and events
6. Traditional accounting system mostly uses
historical cost as measurement base although in
some cases other measurement bases are also
used.

29. MEANING OF MEASUREMENT
1. Measurement is vital aspect of accounting.
Primarily transactions and events are measured
in terms of money.
2. The three elements of measurements are:
– Identification of objects, and events to be
measured;
– Selection of standard or scale to be used;
– Evaluation of dimension of measurement
standard or scale.

30. VALUATION PRINCIPLES
VALUATION PRINCIPLES
Historical Current Realisable Present
cost cost value value

31. ACCOUNTING ESTIMATES
• An estimate may require revision if changes
occur regarding circumstances on which the
estimate was based, or as a result of new
information, more experience or subsequent
developments.
• Change in accounting estimate means difference
arises between certain parameters estimated
earlier and re-estimated during the current
period or actual result achieved during the
current period.