2. WHAT IS ACCOUNTING ?
โข Accounting is the system of recording
and summarizing Business and
financial transactions and analyzing,
verifying, and reporting the results
โข โLanguage of businessโ
โข Measured and recorded in terms of
MONEY
3. ACCOUNTING RECORDS
โข Accounting records are financial
transactions which contain entries
of all money received and spent
and a record of the assets and
liabilities of the company
Accounting records are the original source
documents, journal entries, and ledgers that
describe the accounting transactions of a
business
4. TYPES OF ACCOUNTING RECORDS
THREE MAIN TYPES
โข Income statement: Also known as P/L
statement, shows all income and
expenses of a business for a specific
period of time
โข Balance sheet: A balance sheet is a
financial report that list the assets,
liabilities, and equity of a business. It is
also known as a statement of net worth
or financial position.
โข Statement of cash flows: A statement of
cash flow shows all monetary
transactions going in and out of the
business.
5. BENEFITS OF KEEPING ACCOUNTING
RECORDS
โข Saves taxes
โข Reduce the audit period
โข Comply with the law
โข Avoid any Intrest and
penalties
โข Helps during Acquisition and
Merger
6. IMPACT OF ACCOUNTING RECORDS IN
PERFORMANCE OF BUSINESS ORGANISATIONS
โข BENCHMARKING
โข PERFORMANCE
MANAGEMENT
โข DECISION MAKING
โข DETERMINE COST
โข INVESTMENT
