This document provides an introduction to business accounting. It discusses the objective of accounting as keeping systematic records to ascertain business results and financial position. It notes users of accounting include owners, management, creditors, employees, investors, and the government. Advantages are having a complete transaction record, profit/loss information, and useful data for decision making. Limitations include accounting being historical, excluding qualitative factors, differing valuations, and changing money values.

1. Session I – Introduction to Business Accounting
Objective of Accounting
Users of accounting
Advantages of Accounting
Limitations of Accounting

2. Book Keeping
Book- keeping is the art of recording business transactions in a
systematic manner”. A.H.Rosenkamph
Book- keeping includes recording of journal,
posting in ledgers and balancing of accounts
All the records before the preparation of trail
balance

3. 1. To keeping systematic record
2. To ascertain the results of the operation
3. To show the financial effect on the entity of each
transaction recorded.
Objective of Book keeping

4. 4. Prevention of errors and frauds
5. Measure of exercising a system of control.
6. Permanent record of each transactions
7. To ascertain the amount to be received or paid.
Objective of Book keeping

5. Definition of Accounting
The art of recording, classifying and summarizing 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 results thereof (AICPA) American Institute of Certified
Public Accountants
Accounting is the bigger picture Book Keeping
Taking the information that is obtained through the bookkeeping process
and using that information to analyze the results of the business.
provides the reports and information needed for the user of the account

6. 1. To keep systematic record
2. To ascertain the results of the operation
3. To ascertain the financial position of the business:
4. To portray the liquidity position
5. To protect business properties
6. To facilitate rational decision making
7. To satisfy the requirements of law (GST).
Objective of Accounting

7. 1. Owners
2. Management
3. Creditors
4. Employees
5. Investors
6. Government
7. Consumers
8. Research Scholars
Users of accounting

8. 1. It helps in having complete record of business
transactions.
2. It gives information about the profit or loss
3. It provides useful information for making decisions,
4. It facilitates comparative study of current year’s
profit, sales, expenses etc., with those of the
previous years.
Advantages of Accounting

9. 5. To know about the management’s ability to utilize
enterprise resources effectively
6. useful for predicting, comparing and evaluation
the enterprise’s earning power.
7. It helps in complying with certain legal formalities
like filing of income tax and sales-tax returns.
Advantages of Accounting

10. 1. Accounting is historical in nature
2. It excludes qualitative elements like management,
reputation, employee morale, labor strike etc
3. Valuation of inventory, provision for doubtful debts
and assumption about useful life of an asset may
differ from one business house to another
4. Money value is bound to change often from time to
time.
Limitations of Accounting