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Accountancy
Friar Luca Pacioli (Paciolo), the Father of Accountancy
Definition of AccountingThe Committee on Terminology of the American Instituteof Certified Public Accountants (AICPA defin...
Accounting as an information system in          business and economic decision making Accounting                          ...
Accounting conceptsSeparate Entity conceptDual aspect conceptGoing concern conceptAccounting period conceptMoney measureme...
Accounting conceptsSeparate Entity conceptDual aspect conceptGoing concern conceptAccounting period conceptMoney measureme...
Accounting conventions Convention   of   consistency Convention   of   conservatism Convention   of   materiality Conventi...
Accounting conventions Convention   of   consistency Convention   of   conservatism Convention   of   materiality Conventi...
Cash and Accrual BasedAccounting Systems Cash-basis accounting is a method of bookkeeping that records financial events ba...
Cash and Accrual BasedAccounting Systems Accrual-basis accounting records financial events based on events that change you...
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  1. 1. Accountancy
  2. 2. Friar Luca Pacioli (Paciolo), the Father of Accountancy
  3. 3. Definition of AccountingThe Committee on Terminology of the American Instituteof Certified Public Accountants (AICPA defined accounting AICPA) AICPAthus, in 1941:Accounting is the art of recording, classifying andsummarizing in a significant manner, and in terms ofmoney, transactions and events which are, in part atleast, of a financial character, and interpreting the resultsthereof.
  4. 4. Accounting as an information system in business and economic decision making Accounting Decision makersBusiness activities DATAand transactions Recording of data Processing of data Communication
  5. 5. Accounting conceptsSeparate Entity conceptDual aspect conceptGoing concern conceptAccounting period conceptMoney measurement conceptPeriodic matching of cost and revenue conceptRelevanceAccrual
  6. 6. Accounting conceptsSeparate Entity conceptDual aspect conceptGoing concern conceptAccounting period conceptMoney measurement conceptPeriodic matching of cost and revenue conceptRelevanceAccrual
  7. 7. Accounting conventions Convention of consistency Convention of conservatism Convention of materiality Convention of full disclosure
  8. 8. Accounting conventions Convention of consistency Convention of conservatism Convention of materiality Convention of full disclosure
  9. 9. Cash and Accrual BasedAccounting Systems Cash-basis accounting is a method of bookkeeping that records financial events based on cash flows and cash position. Revenue is recognized when cash is received and expense is recognized when cash is paid. In cash-basis accounting, revenues and expenses are also called cash receipts and cash payments. Cash-basis accounting does not recognize promises to pay or expectations to receive money or service in the future, such as payables, receivables, and prepaid expenses.
  10. 10. Cash and Accrual BasedAccounting Systems Accrual-basis accounting records financial events based on events that change your net worth (the amount owed to you minus the amount you owe others). Standard practice is to record and recognize revenues in the period in which they incur and to match them with related expenses in a process known as matching or expense matching. Even though cash is not received or paid in a credit transaction, they are recorded because they are consequential in the future income and cash flow of the company. Accrual- basis is GAAP compliant.

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