This document provides an overview of accounting concepts, principles, standards and financial statements. It discusses key accounting concepts like money measurement, going concern, cost, dual aspect etc. It also explains accounting conventions like conservatism and full disclosure. Furthermore, it introduces accounting standards and their role in reducing discretion and improving financial reporting. Lastly, it discusses the branches of accounting and users of accounting information.
The document discusses various aspects of financial management including scope, objectives, sources of funds, investment decisions, dividend decisions, liquidity management, and capital budgeting. The key objectives of financial management are to maximize shareholder value and profit through efficient planning, financing, investing, monitoring, and control. A finance manager is responsible for raising capital through equity, debt, and bank loans; making prudent investment decisions using methods like net present value; and ensuring adequate liquidity and working capital. Capital budgeting involves generating, analyzing, selecting, executing, and reviewing investment projects using both non-discounting and discounted cash flow methods.
ACCOUNTANCY PROJECT
ON THE TOPIC
CONTENTS:
MEANING OF BOOK KEEPING
BOOK KEEPING IS A PART OF ACCOUNTING THAT IS CONCERNED WITH RECORDING OF FINANCIAL TRANSACTIONS IN THE BOOKS OF ACCOUNTS.
NOTE : EVENTS RELATED TO BUSINESS THAT CAN BE EXPRESSED IN TERMS OF MONEY ONLY ARE RECORDED.
STEPS INVOLVED IN BOOK KEEPING
AIMS OF BOOK KEEPING
RELATIONSHIP BETWEEN BOOK KEEPING, ACCOUNTING AND ACCOUNTANCY.
DIFFERENCE BETWEEN BOOK KEEPING AND ACCOUNTING.
THANK YOU
Accounting for Managers - Brief Overview'Nipun Jain'
The presentation discusses about the basics of accounting required for commerce and management students.
Contents:
Introduction to Accounting
Basic Accounting Terminologies
Generally Accepted Principles (G.A.A.P.)
Approaches to Accounting
Primary Book – Journal
Secondary Book – Ledger
Trial Balance
Sample Question
The presentation includes animations and can be used for display in seminars or lectures as well.
For further details, write to TheNipunJain@gmail.com
This document provides an introduction to financial management. It discusses key topics like the meaning and scope of financial management, the goals of profit maximization versus wealth maximization, finance functions, and organizational structure. It also covers the relationship between finance and accounting, interfaces with other functions, and different forms of business organization. The overall summary is that financial management involves acquiring and using funds to achieve organizational goals in the most profitable way by making decisions around investing, financing, and dividends.
Principles of accountancy or business accountingDr V GURUMOORTHI
This document provides an overview of accounting principles and concepts. It begins with a brief history of accounting and an introduction to key terms like bookkeeping and the accounting equation. It then covers topics like the different types of accounts, accounting concepts and conventions, the accounting cycle process involving journals, ledgers and trial balances, and how to prepare final accounts documents like trading accounts and profit and loss statements. The document aims to give the reader foundational knowledge on the fundamentals and processes of accounting.
Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life. There are several methods for calculating depreciation including straight-line, double declining balance, and units of production. Straight-line depreciation provides a constant depreciation expense each year while double declining balance and units of production result in higher expenses in earlier years. Each method has advantages and disadvantages related to ease of use, matching expenses to revenues, and reflecting the actual decline in value of the asset over time.
Financial management involves planning, organizing, directing, and controlling a company's financial resources. Capital investment refers to acquiring long-term assets like plants and machinery. Capital budgeting determines the viability of long-term investments and uses techniques like net present value, internal rate of return, and payback period to evaluate projects. It considers the time value of money, risk, and rates of return to make optimal investment decisions.
This document provides an overview of financial statements that companies are required to prepare under the Companies Act. It discusses the key components of the income statement and balance sheet, including revenues, expenses, assets, liabilities, and equity. Sample income statements and balance sheets are presented with explanatory notes. Key terms related to revenues, expenses, assets, liabilities, equity, and other items are also defined.
The document discusses various aspects of financial management including scope, objectives, sources of funds, investment decisions, dividend decisions, liquidity management, and capital budgeting. The key objectives of financial management are to maximize shareholder value and profit through efficient planning, financing, investing, monitoring, and control. A finance manager is responsible for raising capital through equity, debt, and bank loans; making prudent investment decisions using methods like net present value; and ensuring adequate liquidity and working capital. Capital budgeting involves generating, analyzing, selecting, executing, and reviewing investment projects using both non-discounting and discounted cash flow methods.
ACCOUNTANCY PROJECT
ON THE TOPIC
CONTENTS:
MEANING OF BOOK KEEPING
BOOK KEEPING IS A PART OF ACCOUNTING THAT IS CONCERNED WITH RECORDING OF FINANCIAL TRANSACTIONS IN THE BOOKS OF ACCOUNTS.
NOTE : EVENTS RELATED TO BUSINESS THAT CAN BE EXPRESSED IN TERMS OF MONEY ONLY ARE RECORDED.
STEPS INVOLVED IN BOOK KEEPING
AIMS OF BOOK KEEPING
RELATIONSHIP BETWEEN BOOK KEEPING, ACCOUNTING AND ACCOUNTANCY.
DIFFERENCE BETWEEN BOOK KEEPING AND ACCOUNTING.
THANK YOU
Accounting for Managers - Brief Overview'Nipun Jain'
The presentation discusses about the basics of accounting required for commerce and management students.
Contents:
Introduction to Accounting
Basic Accounting Terminologies
Generally Accepted Principles (G.A.A.P.)
Approaches to Accounting
Primary Book – Journal
Secondary Book – Ledger
Trial Balance
Sample Question
The presentation includes animations and can be used for display in seminars or lectures as well.
For further details, write to TheNipunJain@gmail.com
This document provides an introduction to financial management. It discusses key topics like the meaning and scope of financial management, the goals of profit maximization versus wealth maximization, finance functions, and organizational structure. It also covers the relationship between finance and accounting, interfaces with other functions, and different forms of business organization. The overall summary is that financial management involves acquiring and using funds to achieve organizational goals in the most profitable way by making decisions around investing, financing, and dividends.
Principles of accountancy or business accountingDr V GURUMOORTHI
This document provides an overview of accounting principles and concepts. It begins with a brief history of accounting and an introduction to key terms like bookkeeping and the accounting equation. It then covers topics like the different types of accounts, accounting concepts and conventions, the accounting cycle process involving journals, ledgers and trial balances, and how to prepare final accounts documents like trading accounts and profit and loss statements. The document aims to give the reader foundational knowledge on the fundamentals and processes of accounting.
Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life. There are several methods for calculating depreciation including straight-line, double declining balance, and units of production. Straight-line depreciation provides a constant depreciation expense each year while double declining balance and units of production result in higher expenses in earlier years. Each method has advantages and disadvantages related to ease of use, matching expenses to revenues, and reflecting the actual decline in value of the asset over time.
Financial management involves planning, organizing, directing, and controlling a company's financial resources. Capital investment refers to acquiring long-term assets like plants and machinery. Capital budgeting determines the viability of long-term investments and uses techniques like net present value, internal rate of return, and payback period to evaluate projects. It considers the time value of money, risk, and rates of return to make optimal investment decisions.
This document provides an overview of financial statements that companies are required to prepare under the Companies Act. It discusses the key components of the income statement and balance sheet, including revenues, expenses, assets, liabilities, and equity. Sample income statements and balance sheets are presented with explanatory notes. Key terms related to revenues, expenses, assets, liabilities, equity, and other items are also defined.
The document discusses the key aspects of final accounts of banks and companies. It explains that final accounts comprise the income statement (trading and profit & loss account) and balance sheet. It provides details on various expenses like direct, indirect, administrative etc. It also discusses elements of assets and liabilities like fixed assets, current assets, owners' funds, reserves, secured and unsecured loans. Key adjustments in final accounts like closing stock, outstanding expenses, depreciation etc. are also summarized.
The document discusses the cost of capital and how to calculate it. It defines cost of capital as the rate of return a firm requires to increase its market value. It then discusses:
1) The sources of capital for a firm including debt, equity, preference shares, and retained earnings.
2) How to calculate the weighted average cost of capital (WACC) by determining the costs of each source and weighting them based on proportion of total capital.
3) Methods to calculate the costs of different sources like debt, preference shares, equity, and retained earnings. This includes considering factors like tax rates, issue premiums/discounts, and growth rates.
This document defines accounting rate of return (ARR) as the ratio of estimated accounting profit to average investment of a project. It ignores the time value of money. ARR is calculated by dividing average accounting profit by initial investment. Average accounting profit is the mean of annual profits over the project life. Initial investment may be replaced by average investment due to declining book value over time. Projects are accepted if their ARR is not less than the required rate of return. Examples show calculating ARR for projects with given cash flows. ARR is an easy method but ignores the time value of money and can be calculated inconsistently using accounting versus cash flows.
meaning of accounting
meaning of book-keeping
difference between accounting and book-keeping
meaning of double entry system of book-keeping
accounting equation
accounting principles, concepts and conventions
parties interested in accounting information
accounting cycle
classification/types of accounts
golden rules of accounting
The document discusses accounting standards, including their meaning, definitions, contents, objectives, and need. Accounting standards are designed to harmonize diverse accounting policies and practices. They are issued by accounting bodies to prepare uniform and consistent financial statements and disclosures. The document outlines definitions of accounting standards from international and other bodies. It also lists the typical contents of accounting standards and their objectives like ensuring policies are adopted and financial statements are effective and useful. The final section discusses the need for accounting standards to improve financial statement relevance, reliability, and prevent misleading conclusions.
Financial management involves raising funds, using funds profitably based on risk levels, planning operations and controlling performance. It guides investment decisions, judges operations and projects, and aims for adequate returns. Financial management is concerned with efficient use of capital funds and management decisions regarding asset acquisition and financing. Its goals are to maximize profits and shareholder wealth while maintaining adequate liquidity and ensuring operational efficiency and financial discipline.
Accounting involves identifying, measuring, and communicating the economic information of a business entity to its users. It records transactions and events to determine the entity's financial position. Accounting identifies assets, liabilities, and equity through a system of debits and credits according to the dual aspect concept. The accounting process provides information to owners, managers, creditors, government, and others for decision making.
The document discusses different types of control based on the elements controlled and stage of control. It describes strategic control which evaluates strategy and operational control which evaluates organizational performance. It also discusses feedforward, concurrent, and feedback control based on when control is exercised. Management by exception and total quality management are also summarized, focusing on only monitoring deviations from plans, continuous improvement, and satisfying customer expectations.
The document discusses the key principles and concepts of accounting. It explains that accounting principles provide guidelines for preparing financial statements and include concepts like business entity, historical cost, and matching. Various users of financial statements are also identified, such as investors, lenders, and management. Their different information needs are described. Finally, specific accounting concepts like consistency and materiality are defined in further detail.
This document summarizes a presentation on the International Financial Reporting Standards Conceptual Framework. It discusses key concepts such as the objective of financial reporting which is to provide useful information to investors, lenders and other creditors. It also discusses the qualitative characteristics of relevant and faithfully represented financial information, and fundamental elements such as assets, liabilities and equity. The presentation provides examples and discusses concepts such as recognition and measurement in financial reporting.
AS 22 - Accounting for taxex on incomeUrmila Bapat
This document provides an overview of Accounting Standard 22 on accounting for taxes on income. It discusses key aspects of the standard such as its applicability, definitions of deferred tax asset and liability, recognition and measurement of deferred taxes, and required disclosures. The standard aims to prescribe the accounting treatment for taxes on income in line with the matching concept and ensures transparency by accounting for the tax effect of timing differences between accounting income and taxable income.
The presentation discusses the meaning and objectives of corporate financial reporting. Financial reporting involves communicating a company's financial status to stakeholders through statements that disclose information about resources, obligations, income, cash flows, and equity. The objectives are to provide useful information to help present and potential investors, creditors, and others make rational decisions by assessing amounts, timing, and uncertainty of prospective cash flows and assessing a company's net cash inflows. Financial reports include the balance sheet, income statement, statement of cash flows, and statement of changes in equity.
This document provides an overview of financial management. It defines financial management as dealing with the procurement and utilization of funds. The key aspects covered are procurement of funds through identifying sources and determining financing mixes, and effective utilization of funds through investment decisions. The traditional approach to financial management focused only on procurement, while the modern approach expanded the scope to include investment and dividend decisions. The objectives of financial management are discussed as profit maximization and wealth maximization of shareholders. Risk and return analysis and the time value of money are also covered.
This document provides an overview of price level accounting, which is an accounting technique used to adjust financial statements for inflation. It does this by recording transactions at current prices rather than historical costs. The summary explains that price level accounting aims to provide an accurate picture of profitability and financial position by eliminating the effects of declining money value during inflationary periods. It also outlines some of the techniques used, including the current purchasing power method, replacement cost accounting method, current value accounting method, and current cost accounting method.
This document provides an overview of cost and management accounting. It defines cost accounting as a system for recording costs and producing cost information for products. It also discusses why organizations need costing systems to provide actual unit costs, actual department costs, and forecast costs for planning, decision making, and cost control. The document then covers key terms in cost accounting such as cost, cost units, cost centers, cost objects, and classifications of costs by nature, function, behavior, and changes in activity or volume.
This document provides definitions and explanations of key financial and accounting terminology used in accounting. It begins by defining accounting as the process of recording, classifying, and summarizing business transactions in order to prepare financial statements. It then explains key terms like assets, liabilities, revenue, expenses, and accounting concepts such as the separate entity concept, going concern concept, and matching principle. Examples are provided for types of assets like fixed assets and current assets. Liabilities are classified as long-term and current. The document aims to outline important financial terms and accounting concepts for students in an MBA executive program.
After completing the course, students will be able to:
1. Explain key accounting concepts such as financial and managerial accounting, the accounting cycle, and preparing financial reports.
2. Distinguish accounting systems such as cash, accrual, single and double entry.
3. Apply accounting principles to prepare financial statements and analyze results.
Chapter 1 Introduction to Accounting and Accounting Systems Part - ISuku Thomas Samuel
The document provides an introduction to accounting and accounting systems, defining key terms like transactions, assets, liabilities, revenues, and expenses. It explains the accounting process of recording, classifying, and summarizing transactions and the basic accounting equation that total assets equal total liabilities plus owner's equity. It also outlines the different types of accounts in accounting - personal, real, and nominal accounts - and the golden rules for debit and credit entries.
Note 2Accounting Concepts and Accounting Conventions note 2.pptGhoshVolu
This document discusses key accounting concepts and conventions used in preparing financial statements according to Generally Accepted Accounting Principles (GAAP). It outlines concepts such as the separate entity concept, going concern concept, money measurement concept, and dual aspect concept. It also covers conventions like conservatism, full disclosure, consistency, and materiality that accountants should follow when preparing financial statements to provide an accurate representation of a company's financial position.
The document discusses the key aspects of final accounts of banks and companies. It explains that final accounts comprise the income statement (trading and profit & loss account) and balance sheet. It provides details on various expenses like direct, indirect, administrative etc. It also discusses elements of assets and liabilities like fixed assets, current assets, owners' funds, reserves, secured and unsecured loans. Key adjustments in final accounts like closing stock, outstanding expenses, depreciation etc. are also summarized.
The document discusses the cost of capital and how to calculate it. It defines cost of capital as the rate of return a firm requires to increase its market value. It then discusses:
1) The sources of capital for a firm including debt, equity, preference shares, and retained earnings.
2) How to calculate the weighted average cost of capital (WACC) by determining the costs of each source and weighting them based on proportion of total capital.
3) Methods to calculate the costs of different sources like debt, preference shares, equity, and retained earnings. This includes considering factors like tax rates, issue premiums/discounts, and growth rates.
This document defines accounting rate of return (ARR) as the ratio of estimated accounting profit to average investment of a project. It ignores the time value of money. ARR is calculated by dividing average accounting profit by initial investment. Average accounting profit is the mean of annual profits over the project life. Initial investment may be replaced by average investment due to declining book value over time. Projects are accepted if their ARR is not less than the required rate of return. Examples show calculating ARR for projects with given cash flows. ARR is an easy method but ignores the time value of money and can be calculated inconsistently using accounting versus cash flows.
meaning of accounting
meaning of book-keeping
difference between accounting and book-keeping
meaning of double entry system of book-keeping
accounting equation
accounting principles, concepts and conventions
parties interested in accounting information
accounting cycle
classification/types of accounts
golden rules of accounting
The document discusses accounting standards, including their meaning, definitions, contents, objectives, and need. Accounting standards are designed to harmonize diverse accounting policies and practices. They are issued by accounting bodies to prepare uniform and consistent financial statements and disclosures. The document outlines definitions of accounting standards from international and other bodies. It also lists the typical contents of accounting standards and their objectives like ensuring policies are adopted and financial statements are effective and useful. The final section discusses the need for accounting standards to improve financial statement relevance, reliability, and prevent misleading conclusions.
Financial management involves raising funds, using funds profitably based on risk levels, planning operations and controlling performance. It guides investment decisions, judges operations and projects, and aims for adequate returns. Financial management is concerned with efficient use of capital funds and management decisions regarding asset acquisition and financing. Its goals are to maximize profits and shareholder wealth while maintaining adequate liquidity and ensuring operational efficiency and financial discipline.
Accounting involves identifying, measuring, and communicating the economic information of a business entity to its users. It records transactions and events to determine the entity's financial position. Accounting identifies assets, liabilities, and equity through a system of debits and credits according to the dual aspect concept. The accounting process provides information to owners, managers, creditors, government, and others for decision making.
The document discusses different types of control based on the elements controlled and stage of control. It describes strategic control which evaluates strategy and operational control which evaluates organizational performance. It also discusses feedforward, concurrent, and feedback control based on when control is exercised. Management by exception and total quality management are also summarized, focusing on only monitoring deviations from plans, continuous improvement, and satisfying customer expectations.
The document discusses the key principles and concepts of accounting. It explains that accounting principles provide guidelines for preparing financial statements and include concepts like business entity, historical cost, and matching. Various users of financial statements are also identified, such as investors, lenders, and management. Their different information needs are described. Finally, specific accounting concepts like consistency and materiality are defined in further detail.
This document summarizes a presentation on the International Financial Reporting Standards Conceptual Framework. It discusses key concepts such as the objective of financial reporting which is to provide useful information to investors, lenders and other creditors. It also discusses the qualitative characteristics of relevant and faithfully represented financial information, and fundamental elements such as assets, liabilities and equity. The presentation provides examples and discusses concepts such as recognition and measurement in financial reporting.
AS 22 - Accounting for taxex on incomeUrmila Bapat
This document provides an overview of Accounting Standard 22 on accounting for taxes on income. It discusses key aspects of the standard such as its applicability, definitions of deferred tax asset and liability, recognition and measurement of deferred taxes, and required disclosures. The standard aims to prescribe the accounting treatment for taxes on income in line with the matching concept and ensures transparency by accounting for the tax effect of timing differences between accounting income and taxable income.
The presentation discusses the meaning and objectives of corporate financial reporting. Financial reporting involves communicating a company's financial status to stakeholders through statements that disclose information about resources, obligations, income, cash flows, and equity. The objectives are to provide useful information to help present and potential investors, creditors, and others make rational decisions by assessing amounts, timing, and uncertainty of prospective cash flows and assessing a company's net cash inflows. Financial reports include the balance sheet, income statement, statement of cash flows, and statement of changes in equity.
This document provides an overview of financial management. It defines financial management as dealing with the procurement and utilization of funds. The key aspects covered are procurement of funds through identifying sources and determining financing mixes, and effective utilization of funds through investment decisions. The traditional approach to financial management focused only on procurement, while the modern approach expanded the scope to include investment and dividend decisions. The objectives of financial management are discussed as profit maximization and wealth maximization of shareholders. Risk and return analysis and the time value of money are also covered.
This document provides an overview of price level accounting, which is an accounting technique used to adjust financial statements for inflation. It does this by recording transactions at current prices rather than historical costs. The summary explains that price level accounting aims to provide an accurate picture of profitability and financial position by eliminating the effects of declining money value during inflationary periods. It also outlines some of the techniques used, including the current purchasing power method, replacement cost accounting method, current value accounting method, and current cost accounting method.
This document provides an overview of cost and management accounting. It defines cost accounting as a system for recording costs and producing cost information for products. It also discusses why organizations need costing systems to provide actual unit costs, actual department costs, and forecast costs for planning, decision making, and cost control. The document then covers key terms in cost accounting such as cost, cost units, cost centers, cost objects, and classifications of costs by nature, function, behavior, and changes in activity or volume.
This document provides definitions and explanations of key financial and accounting terminology used in accounting. It begins by defining accounting as the process of recording, classifying, and summarizing business transactions in order to prepare financial statements. It then explains key terms like assets, liabilities, revenue, expenses, and accounting concepts such as the separate entity concept, going concern concept, and matching principle. Examples are provided for types of assets like fixed assets and current assets. Liabilities are classified as long-term and current. The document aims to outline important financial terms and accounting concepts for students in an MBA executive program.
After completing the course, students will be able to:
1. Explain key accounting concepts such as financial and managerial accounting, the accounting cycle, and preparing financial reports.
2. Distinguish accounting systems such as cash, accrual, single and double entry.
3. Apply accounting principles to prepare financial statements and analyze results.
Chapter 1 Introduction to Accounting and Accounting Systems Part - ISuku Thomas Samuel
The document provides an introduction to accounting and accounting systems, defining key terms like transactions, assets, liabilities, revenues, and expenses. It explains the accounting process of recording, classifying, and summarizing transactions and the basic accounting equation that total assets equal total liabilities plus owner's equity. It also outlines the different types of accounts in accounting - personal, real, and nominal accounts - and the golden rules for debit and credit entries.
Note 2Accounting Concepts and Accounting Conventions note 2.pptGhoshVolu
This document discusses key accounting concepts and conventions used in preparing financial statements according to Generally Accepted Accounting Principles (GAAP). It outlines concepts such as the separate entity concept, going concern concept, money measurement concept, and dual aspect concept. It also covers conventions like conservatism, full disclosure, consistency, and materiality that accountants should follow when preparing financial statements to provide an accurate representation of a company's financial position.
The document provides an overview of key concepts in financial accounting including:
- The meaning and objectives of financial accounting
- The advantages and limitations of financial accounting
- Accounting principles like the accounting equation, concepts, and conventions
- International accounting standards set by the IASB
- Users of accounting information both internal and external to a business
(MBA SEM 1) SEM 1 Accounting Principles.pptxgindu3009
Accounting principles provide guidelines for sound accounting practices and procedures. They aim to ensure uniformity and easy understanding of financial information.
There are two main categories of accounting principles: concepts and conventions. Concepts are basic assumptions used as a foundation for recording transactions, while conventions are customs that guide financial statement preparation.
Key concepts include business entity, money measurement, cost, going concern, dual aspect, realization, accrual, accounting period, and matching. Important conventions are consistency, conservatism, full disclosure, and materiality. Consistency provides comparability over time, while conservatism plays it safe and avoids overstating values. Full disclosure and materiality aim to make financial statements complete and understandable.
The document discusses accounting principles and standards. It defines accounting principles as the rules adopted by accountants when recording transactions, which provide guidelines for preparing financial statements. The key accounting concepts discussed are the going concern assumption, consistency assumption, and accrual assumption. Accounting standards issued by regulatory bodies aim to promote uniformity in accounting practices and ensure transparency, consistency and comparability of financial statements.
accountings and financial anulysis.pptxKrishan Saini
The document provides an overview of accounting concepts, principles, and equations. It defines accounting as the process of recording financial transactions and communicating financial information. Some key points covered include:
- The basic accounting equation is Assets = Liabilities + Owner's Equity, indicating that assets are equal to liabilities plus the owner's investment.
- Accounting principles include accrual basis, matching, full disclosure, consistency, and conservatism.
- Accounting concepts include business entity, money measurement, cost, going concern, and dual aspect.
- Accounting has expanded in scope to include businesses, non-profits, governments, and individuals.
Accounting involves recording, classifying, and summarizing financial transactions and events. It has several objectives, including maintaining business records, ascertaining profit/loss, determining financial position, and providing information to users. The accounting process involves identifying transactions, recording them, classifying records, summarizing data, and interpreting results. Principles like the business entity concept, money measurement concept, and matching concept guide the accounting process. Accounting provides useful information but has limitations like not reflecting qualitative factors or price changes.
Accounting is a system for measuring and recording business transactions and reporting financial information. It involves processing transactions, preparing financial statements, and providing information to decision-makers. The key points are:
- Accounting records business transactions, prepares financial reports like the income statement and balance sheet, and provides information to managers, investors, and others.
- Accounting principles and conventions provide guidelines for financial reporting and include concepts like business entity, cost, matching, and consistency to ensure uniformity and comparability.
- Management accounting provides internal reports for decision-making while financial accounting prepares external financial statements for stakeholders.
The document discusses key accounting concepts and standards. It covers the accounting equation of assets equaling liabilities plus owner's equity. It defines assets, liabilities and owner's equity. It also discusses the types of financial statements including the income statement, balance sheet, cash flow statement, and statement of changes in equity. Finally, it provides an overview of accounting standards used internationally such as GAAP, IFRS, and standards used in countries like the UK, Germany, France, China and Russia.
Book keeping basic concept: - raju mba 4semsridharvraju
The document discusses the basic concepts of book keeping and accounting. It explains that book keeping involves systematically recording business transactions, while accounting builds on book keeping by analyzing records to prepare financial statements and interpret financial results. The key principles of accounting include the money measurement concept, business entity concept, going concern concept, and matching concept. Financial statements like the manufacturing account, trading account, profit and loss account, and balance sheet are prepared according to accounting principles and concepts.
This presentation is based on the subject Financial Accounting which helps the beginners to know the basic concept of accounting . This is according to the syllabus of Pt. Ravishankar University , Raipur and Durg University, Durg.
This document discusses key accounting concepts including:
- The business entity concept treats a business and its owners separately for accounting purposes.
- Under the going concern concept, businesses are viewed as continuing indefinitely. This affects recording of long-term assets at cost and depreciation.
- The accrual concept requires revenues to be recorded when earned and expenses when incurred, regardless of cash flow.
It also outlines other fundamental concepts like historical cost, matching, revenue recognition, accounting periods, money measurement, dual aspect, cost-benefit, and timely reporting principles. Key types of accounting concepts are defined such as business entity, going concern, accrual, historical cost, revenue recognition, and accounting periods.
2. concepts and conventions of accounting mba 1st tri semesterKaran Kukreja
The document discusses key accounting principles and concepts. It defines Generally Accepted Accounting Principles (GAAP) as the broad guidelines, conventions, rules, and procedures for accepted accounting practice. It outlines 10 fundamental accounting concepts: (1) business entity, (2) going concern, (3) money measurement, (4) double entry, (5) accounting period, (6) cost, (7) revenue recognition, (8) matching, (9) accrual, and (10) reliability. It also describes 4 important accounting conventions: (1) full disclosure, (2) conservatism, (3) consistency, and (4) materiality. The document provides details on the definition and application of
The document discusses accounting principles, concepts, conventions, and the nature of accounting. It provides characteristics of accounting principles such as flexibility and being framed by people. It also discusses the criteria accounting principles must meet like objectivity and usefulness. Balance sheet principles, income statement principles, and general principles are presented. Key concepts discussed include the entity concept, money measurement, going concern, and cost. Conventions around disclosure, consistency, and conservatism are also summarized.
Here are the key steps involved in payroll calculations:
1. Calculate basic salary as per employment terms
2. Calculate allowances like HRA, travel allowance, LTA as per company policy and income tax rules
3. Calculate statutory deductions like PF, ESI as prescribed percentages of basic pay
4. Calculate non-statutory deductions like income tax as per applicable tax slabs and rules
5. Calculate other benefits like leave encashment, bonuses, incentives if any
6. Generate payslip showing calculations of gross pay, deductions and net pay
7. Process payment to employees and file statutory returns
The payroll software automates these calculations to ensure accuracy as per rules. It is important to
This presentation provides an overview of accounting principles and standards. It defines accounting as identifying, measuring, and communicating financial information to allow for informed decisions. Accounting standards provide common principles, procedures, and policies to improve transparency. Specific standards cover revenue recognition, asset valuation, cash flow reporting, inventory costs, leases, taxes, intangible assets, and more. The accounting standards board of India issues standards following ICAI principles with input from advisory committees.
Accounting concepts and conventions(mba)tanvi goyal
The document discusses several key accounting concepts and conventions. It explains that concepts are the underlying theories and assumptions that form the basis of accounting, such as the business entity concept, going concern concept, and money measurement concept. It also describes important accounting conventions like dual aspect, historical cost, matching, materiality, full disclosure, conservatism, and consistency. These concepts and conventions provide the fundamental framework and guidelines for preparing and presenting financial statements.
This document provides an introduction to basic accounting concepts. It begins by defining key terms like assets, liabilities, capital, and accounting periods. It then explains important accounting principles and financial statements, including accrual accounting, accounts receivable/payable, and the balance sheet, income statement, and statement of cash flows. The overall purpose is to familiarize readers with fundamental accounting vocabulary and practices.
This document discusses key accounting concepts and conventions. It defines 8 accounting concepts: business entity, money measurement, accounting period, accounting cost, going concern, dual aspect, realization, and matching. It also discusses 4 accounting conventions: consistency, materiality, conservatism, and full disclosure. The concepts and conventions establish standard principles and practices for preparing accurate financial statements and reports.
LBS Introduction to Financial Accounting.pptxNamishGupta10
The document provides an overview of basic concepts in financial accounting. It discusses key concepts like identifying transactions, measuring transactions in monetary terms, recording transactions, classifying and summarizing transactions, analyzing relationships, interpreting results, and communicating information to users. It also outlines the branches of accounting and their purposes, as well as accounting principles, standards, and the process of converging with International Financial Reporting Standards.
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.AnnySerafinaLove
This letter, written by Kellen Harkins, Course Director at Full Sail University, commends Anny Love's exemplary performance in the Video Sharing Platforms class. It highlights her dedication, willingness to challenge herself, and exceptional skills in production, editing, and marketing across various video platforms like YouTube, TikTok, and Instagram.
Part 2 Deep Dive: Navigating the 2024 Slowdownjeffkluth1
Introduction
The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
Storytelling is an incredibly valuable tool to share data and information. To get the most impact from stories there are a number of key ingredients. These are based on science and human nature. Using these elements in a story you can deliver information impactfully, ensure action and drive change.
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
B2B payments are rapidly changing. Find out the 5 key questions you need to be asking yourself to be sure you are mastering B2B payments today. Learn more at www.BlueSnap.com.
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5. •What about the money I
gave you?
•Where did you spend it?
•How much of it is left?
•Please give an account
of it.
This Photo by Unknown Author is licensed under CC BY
6. Movie Ticket - 300
Cab - 100
Coke – 80
Popcorn treat- 300
Shirt – 500
Total = 1200
7. What is
Accounting?
Basically, it is Process of
identifying, measuring,
recording and
communicating the
required information
relating to economic
transactions to the
to the
interested users to help them
them make decisions.
8. ACCOUNTING
• It is the objective medium through
which business organizations find
out and communicate their
financial performance and financial
position to the outside world
• It is also defined as the process of
recording, classifying,
summarizing, analysing and
interpreting the financial
transactions and communicating
the results thereof to the persons
interested in such information.
Recording
• Journal
Classifying
• Ledger
Summarising
• TB, P&L, BS
Analysing
& Interpreting
• Ratios and reading the financial info. For
judgment about financial condition and
profitability.
Communicating
• Accounting reports
9. Branches of Accounting
Financial
Accounting
Cost Accounting Management
Accounting
While Management Accounting and Cost accounting aims at assisting managers in
their functions, Financial Accounting aims at meeting the information needs of both
external and internal users. While Management Accounting information is privileged
and personalized, Financial Accounting information needs to be more accurate and in
standardized formats to enable use by external users and easy comparability.
12. External Users
Investors
Lenders and Suppliers
and Research and Rating Agencies
Customers
Tax Authorities and Government
Auditor
Competitor
Public
Performance Risk Profit
Continuity of supply
Monitor Compliances
Accuracy of Tax Return
Worth
Credit worthiness
Inspect Accounting Records
Journalists Analysts Academicians
Check strategies and pricing policies
14. Output of
Financial
Accounts
FINANCIAL STATEMENT:
A complete set of financial statements comprises:
• Balance Sheet;
• Statement of Profit & Loss / Profit & Loss account/ Income
statement;
• Cash flow statement; and
• Notes to Accounts
As per Ind-AS -1, the following are also included:
• Bifurcation of Profit & Loss Account into Other
Comprehensive Income;
• Statement of changes in equity/net worth;
• For a sole proprietor generally only first two are prepared.
16. Generally
Accepted
Accounting
Principles
(GAAP)
• GAAP – Generally Accepted Accounting Principles (GAAP)
• GAAP – COMMON SET OF conventions, rules, standards
and procedures that constitute accepted accounting
practices at any given time
• GAAP differ from country to country because of the
legislative requirements of each country, local accounting
practices, customs, usage and business environment
peculiar to each country
• Each country has set up its own professional accounting
body to frame, implement and regulate the application of
the GAAPs in the country.
• Example:
• In USA – FASB – Financial Accounting Standard Board – set
up in 1973
• In UK – ASB – Accounting Standard Board – set up in 1990
issues Financial reporting standards
• In India – ASB – Accounting Standard Board - set up in
1977 by ICAI issues Accounting Standards (AS)
17. Generally
Accepted
Accounting
Principles
(GAAP)
•These accounting Principles can be divided into two categories:
- Accounting concepts
- Accounting convention
•Accounting concepts: Those basic assumptions or conditions
upon which the science of accounting is based. They are like the
foundation or pillars of accounting.
•Accounting conventions: Those customs or traditions which
over period have been found to yield better results and so those
have been established as guidelines for accountants to follow
while preparing the financial statements.
•Use of GAAP make Financial Statements more meaningful,
reliable and comparable.
18. Generally Accepted Accounting Principles (GAAP)
Accounting concepts:
•Separate entity concept
•Money Measurement concept
•Going concern*
•Cost concept (this have been widely
challenged by IFRS by introducing Fair
Value concept)
•Accounting period
•Dual aspect concept
•Accrual concept*
•Matching concept
Accounting conventions:
•Conservatism
•Materiality
•Full disclosure
•Consistency*
* : The ones marked in red are
Fundamental Accounting
Assumptions.
19. Accounting Concepts
Separate entity concept/ Business Entity concept :
• For accounting purposes, the business enterprise and its
owners are two separate and independent entities. Accounting
records are made in the books of accounts from the point of
view of the business and not of the owner.
• Eg. If Star International UK set up Star Trek India as captive
BPO and invested $ 50 million, how will the transaction be
recorded in accounts?
• As investment in books of Star International UK and as
capital in the books of Star Trek India
20. Accounting Concepts
Money Measurement concept :
•As per this concept, only those transactions which
can be expressed in terms of money are subject
matter of accounting.
•Also, record of the transactions will be kept in
monetary terms and not in physical units enabling it
to be aggregated and objectively measured.
•Eg. Sale transaction whether big or small is
recorded. But appointment of a new M.D. is not
recorded. Also, sale is recorded in terms of money
and in reporting currency and not units.
21. Accounting Concepts
Going Concern concept :
•Unless there is substantial evidence to the contrary, this
concept assumes that there is neither any intention
nor any necessity to liquidate the business in the
foreseeable future and it will continue to carry on its
activities for a long period of time.
•Eg. A business purchases machinery of Rs. 100,000 and
Rs. 10,000 is decided to be charged as depreciation
every year in Profit & Loss Account. Without going
concern concept, asset would be shown at market
value and the differential expensed off.
22. Cost concept:
•This concept states that all assets (except stock and short-term
investments) are recorded in the books of accounts at their purchase
price, which includes cost of acquisition, transportation and
installation and not at its market value as business is a going
concern.
•Eg. if a business purchases a plot of land for Rs. 50,00,000 and incurs a
legal fees of Rs. 50,000. It will be recorded at Rs. 50,50,000
irrespective of whether market value has become 60,00,000 or
40,00,000.
•However, it should be noted that under the new era of accounting and
presentation and disclosure of financial transactions , the concept of
Fair value of accounting is introduced. As per this concept, Assets can
be valued at their fair value in contrast to historical cost concept
(referred to as revaluation model). Since we are in the transition
phase, both the concepts are currently in practice.
Accounting Concepts
23. Accounting period:
• As per this concept, the activities of the enterprise
is divided into artificial time periods and results
seen after each period. The period covered by the
Financials is called accounting period and is
conventionally for one year. However, it can be
shorter or longer but max period allowed by
Companies Act is up to 15 months.
• Suppose a company starts operations from Feb
2018, what accounting period it can opt for in its
first reporting?
• 2 months or 14 months
Accounting Concepts
25. Accounting Concepts
Matching concept
• This concept states that the revenue
and the expenses incurred to earn
that revenue must be ‘matched’ to
determine the correct profit and
loss.
• Eg. Closing stock remaining at the
end of the year should be valued
and subtracted from purchases and
opening stock to know the ‘cost of
goods sold’ during the year.
REVENUE ASSOCIATED EXPENSES
SAME
ACCOUNTING
PERIOD
26. Dual Aspect concept :
•According to this concept, every business transaction
has a dual & opposite effect and both the aspects should
be recorded.
Eg. If a capital of Rs. 10,000 is invested in business, it will
be recorded in two accounts – cash received of Rs.
10,000 and Capital introduced of Rs. 10,000.
Now, if machinery is purchased for Rs. 5,000, it will be
recorded in two accounts again– machinery increase by
Rs.5,000, cash balance decrease by Rs. 5,000
•It is because of dual aspect that the fundamental
accounting equation always balances
Assets = Capital + Liabilities
(+Income – Expenses)
Accounting Concepts
27. Convention of Conservatism:
• In the initial stages of accounting, certain anticipated profits were recorded but did not
materialize. This led to low acceptability of accounting figures by the end-users.
• Therefore, the accountant now follows the rule ‘anticipate no profit but provide for all
losses. This is called the principle of ‘conservatism’ or policy of ‘playing safe’.
• Eg. Inventories are valued at cost or NRV whichever is less
Accounting Convention
28. Accounting
Convention
Convention of Consistency:
•According to this convention, the same accounting
principles, procedures and policies should be used
consistently on a period to period basis for
preparing financial statements. If change is
inevitable due to legal necessity or to improve
accounting, a note to that effect and the amount of
effect should be given.
•Eg. If depreciation on fixed assets is charged
according to diminishing balance method and at a
particular rate, it should be followed year after year
unless there is a necessity to change the same. If
changed, the impact of such change and the reason
for change should be duly disclosed.
29. Accounting
Convention
Convention of Materiality:
•According to this convention, the accountant should
attach more importance to material details, otherwise
accounting will be unnecessarily overburdened with
minute details.
•This concepts gives way to subjectivity. However the
criteria to decide materiality is: an item would be
material if it influences the judgement of the end user.
•Eg. Any item of income or expenditure which exceeds 1
percent of the revenue from operations or Rs. 100,000,
whichever is higher, is shown as a separate item against
appropriate account head in the P&L and is not combined
with any other items shown under misc.
expenses/income.
30. Accounting Convention
Convention of Full Disclosure:
•According to this convention, accounting
statements should disclose fully & fairly the
information they purport to represent and which
can be of material interest to the users of
financial statement.
•Eg. Notes to Accounts appended to financial
statements (giving information on contingent
liabilities, managerial remuneration etc.) is in
pursuance of this convention.
31. Accounting Concepts ….. some
questions
• Mediclaim Pharma Ltd. Is facing a law suit wherein it may
be liable to pay a fine of Rs. 10 lakhs. The lawyer of the
company has advised that there is high probability of loosing
the law suit. How should the company record the transaction
in its books of accounts?
• Shivam Ltd. borrowed a sum of Rs. 50 lakhs from ICICI on
July 1, 2017 for one year. The loan matured on June 30, 2018
and was duly repaid with interest of 5 lakhs. The company
maintains books on financial year basis. In which accounting
year should the interest expense be recorded?
• A businessman purchased goods for rs. 25,00,000 and sold
80% of such goods during the accounting year ended 31st
March, 2018. The net realisable value of the remaining goods
was Rs. 4,00,000. He valued the closing inventory at cost. He
violated the concept of ?
32. Accounting Concepts ….. some
questions
1.__________ concept states that business firm
will continue to carry on its activities for an
indefinite period of time.
2.The goods drawn from business for owner’s
personal use is treated as reduction in __________
3.Inventories are shown in the financial
statements at ________
4.Recording of transactions in the books of
accounts with a definite period is called _______
concept.
33. Meaning &
Relevance of
Accounting
Standards
•Accounting Principles (concepts and conventions) that have
evolved over a period of time as general rules for accounting
transactions do not cover specific situations. Also they do not
have backing of law.
•Accounting Standards reduce these general principles to
specific rules covering specific accounting events or
transactions and have the backing of law.
•Eg. AS- 2 states that inventory should be valued at ‘lower of
cost or net realizable value’
•AS-13 states that short-term investments should be shown at
‘lower of cost or market value’[conservatism principle applied]
•Accounting Standards thus reduce management discretion in
choosing accounting policies.
•They also lay down disclosure requirements in order to
provide more meaningful information to various users of FS.
34. Accounting Standards in India (AS)
•ICAI established an Accounting Standards Board on 22nd April, 1977 to formulate AS.
•ASB has so far issued 32 definitive standards out of which AS - 6, 8, 30, 31 and 32 are withdrawn.
Thus the total number of active AS is 27.
•For detailed list refer: https://www.icai.org/post.html?post_id=8660
37. Introduction to
International
Financial
Reporting
Standards (IFRS):
•The term IFRS includes IFRS & International Accounting
Standards (IAS)
•IASB has issued 17 IFRS so far. There were 41 International
Accounting Standards issued by IASC out of which 13 have
been withdrawn/replaced or superseded. For complete
list refer: https://www.ifrs.org/issued-standards/list-of-
standards/
•Thus the total number of International Standards stand as
follows = 17 IFRS + 28 IAS = 45
•Collectively these 45 standards are referred to as IFRS and
recognized by more then 130+ countries
38. Need for International Financial Reporting
Standards (IFRS):
•Global standards for global markets
•Modern economies rely on cross-border transactions and the free
flow of international capital. More than a third of all financial
transactions occur across borders, and that number is expected to
grow.
•Investors seek diversification and investment opportunities across the
world, while companies raise capital, undertake transactions or have
international operations and subsidiaries in multiple countries.
•In the past, such cross-border activities were complicated by different
countries maintaining their own sets of national accounting standards.
Such different sets of accounting requirements often added cost,
complexity and ultimately risk both to companies preparing financial
statements and investors and others using those financial statements to
make economic decisions.
39. Need for International Financial Reporting
Standards (IFRS):
• Applying national accounting standards meant amounts
reported in financial statements might be calculated on a
different basis. Analysing such information involved studying
the technicalities of national accounting standards, because
even a small difference in requirements could have a major
impact on a company’s reported financial performance and
financial position.
• IFRS Standards address this challenge by providing a high
quality, internationally recognised set of accounting standards
that bring transparency, accountability and efficiency to
financial markets around the world.
• Homogenous Accounting standards will facilitate the stake
holders all over the globe to understand accounting
information before taking any investment decision.
40. Benefits of
IFRS Standards:
•IFRS Standards bring transparency by enhancing the international
comparability and quality of financial information, enabling investors
and other market participants to make informed economic decisions.
•IFRS Standards strengthen accountability by reducing the
information gap between the providers of capital and the people to
whom they have entrusted their money. IFRS Standards provide
information that is needed to hold management to account. As a
source of globally comparable information, IFRS Standards are also of
vital importance to regulators around the world.
•And IFRS Standards contribute to economic efficiency by helping
investors to identify opportunities and risks across the world, thus
improving capital allocation. For businesses, the use of a single,
trusted accounting language lowers the cost of capital and reduces
international reporting costs
•Source: https://www.ifrs.org/use-around-the-world/why-global-
accounting-standards/
41. IFRS – CONVERGENCE IN INDIA- Ind AS:
Convergence vs. adoption: Instead of adopting IFRS whereby Indian accounting Standards would have
ceased to exist, India has opted for convergence route for transition. In this route, a new set of AS are
issued substantially in line with IFRS but by the Indian authorities. Also, these IFRS are slightly
modified in light of usage and business environment prevailing in the country (termed as ‘carve-outs).
In view of demand by global investors, in 2011, Ministry of Corporate Affairs (MCA), in
consultation with ICAI, decided to converge Indian Accounting Standards with IFRS to improve
credibility and bring Indian financial information in line with global best practices.
•These converged Accounting standards are referred to as Ind AS. It should be noted that Ind AS are
different from AS issued by ICAI.
•Thus in India, currently there are two sets of Accounting Standards:
–First, existing AS issued by ICAI
–Second, Ind AS formulated by ICAI and notified by Ministry of Corporate Affairs (MCA).
•ICAI has so far formulated 41 Ind AS. Ind AS 42 is under formulation. These standards are converged
with IFRS. The nomenclatures, paragraph numbers etc. have all been kept similar to the IFRS version.
For detailed list of notified Ind AS refer: www.mca.gov.in/MinistryV2/Stand.html
43. Applicability of Ind AS:
•Implemented on voluntary basis from 1st April, 2015 and in phased manner it will be mandatory as follows:
–from 1st April, 2016 for companies (listed and unlisted) with net worth >= ₹ 500 crores including
their associates
–From 1st April, 2017 for all listed companies and unlisted companies with net worth >= ₹ 250 crores
including their associates (However companies listed on SME exchanges are exempted)
–From 1st April, 2018 for all Scheduled Commercial Banks, Insurance companies and NBFCs. However for
Banks and insurance sector it has been deferred till further notice.
•Thus there are two separate sets of Accounting Standards in India.
–One set comprises of Ind AS which are converged with IFRS. These shall be applicable to specified class of
companies as notified by the Government.
–The second set would comprise the existing Accounting Standards (AS’s). These would be applicable to all
other companies including Small and Medium Companies (SMCs)