The document provides an overview of accounting topics including: - The history and branches of accounting such as financial, cost, and management accounting. - Key accounting concepts like the double-entry system, classification of accounts, journal, ledger, trial balance, and financial statements. - Types of accounts, capital, assets, liabilities, and transactions that are involved in accounting. - The preparation process of final accounts which involves trading account, profit and loss account, and balance sheet.

1. ACCOUNTING
PRESENT BY RUSHALI M. SAWANT
WEL-COME

2. INDEX
 HISTORY OF ACCOUNTING
 BOOK-KEEPING AND ACCOUNTING
 BRANCHES OF ACCOUNTING
 USERS OF ACCOUNTING
 ACCOUNTING PRINCIPLES
 DOUBLE ENTERY SYSTEM
 CLASSIFICATION OF ASSETS
 TYPES OF CAPITAL
 TYPES OF LAIBILITIES
 TYEPS OF TRANSACTION
 CLASSIFICATION OF ACCOUNTING
 JOURNAL INTRODUCATION
 LEDGER
 TRIAL BALANCE
 FINAL ACCOUNT
 TRADING ACCOUNT
 BALANCE SHEET

3. HISTORY OF ACCOUNTING
The Principles Of Double Entry System, Which Came Into
Existence In15th Century. Fra Luka Paciolo, A Mathematician
Published A Book De Computicet Scripturies In 1494 At Venice
In Italy. This Book Was Translated Into English In 1543 In This
Book He Covered A Brief Section On “Book-keeping” Origin Of
Accounting In India: The Accounting On Modern Lines Was
Introduced In India After 1850 With The Formation Of Joint
Stock Companies In India. Basics Of Accounting Narasimha

4. BOOK-KEEPING AND ACCOUNTING:
According to Prof. G.A. Lee the accounting
system has two stages.
Book-Keeping:
Book-Keeping involves the chronological recording of
finance transactions in a set of books in a systematic
manner.
Accounting:
Accounting is a concerned with the maintenance of
accounts giving stress to the design of the system of
records, the preparation of reports based on the
recorded data and the interpretation at the reports.
Definition of Accounting:
“Accounting system is a means of collecting,
summarizing, analyzing and reporting in monetary
terms, the information about the business.”-
“R.N.Anthony”

5. Branches Of Accounting
Financial accounting
The purpose of Accounting is to
ascertain the financial results i.e.,
profit or loss in the operations
during a specific period. It is also
aimed at knowing the financial
position, i.e., assets, liabilities and
equity position at the end of the
period
Cost accounting
The purpose of cost
accounting is to analyze
the expenditure so as to
ascertain the cost of
various products
manufactured by the firm
and fix the prices
Management accounting
The purpose of management
accounting is to assist the
management in taking rational
policy decisions. Ex of such
decisions, pricing decisions,
capital expenditure
decisions…….etc. The necessary
accounting information about
funds, costs, profits, etc.

6. USERS OF
ACCOUNTING
 Internal Users: Managers: These
are the persons who manage the
business, i.e., management at the
top, middle and lower levels.
Accounting information also helps
the managers in appraising the
performance of subordinates. As
such Accounting is termed as “ the
eyes and ears of management”.
External Users:
Investors : Those who
are interested in
buying the shares of a
company are naturally
interested in the
financial statements to
know how safe the
investment already
made is and how safe
the proposed
investment will be.
Creditors: Lenders are
interested to know
whether their loan,
principal and interest,
will be paid when due
Workers: In our country,
workers are entitled to
payment of bonus which
depends the size of profit
earned. Hence, they would
like to be satisfied that the
bonus being paid to them is
correct
Customers: They are
also concerned with
the stability and
profitability of the
enterprise.
Government:Governme
nt all over the world
are using financial
statements for
compiling statistics
concerning business
which, in turn, helps
in compiling national
accounts.

7. ACCOUNTING PRINCIPLES
Accounting
Principles
can be
broadly
classified
Into two
categories
• Accounting
Concepts
• Accounting
Conventions

8. DOUBLE ENTRY SYSTEM
2) Giving Aspect giving aspect is known as ‘Credit Aspect
1) Receiving Aspect Receiving aspect is known as ‘Debit Aspect
DOUBLE ENTRY SYSTEM : Double entry system is a scientific way of presenting accounts. As such all
the Business concerns feel it convenient to prepare the accounts under double entry system. Under
dual aspect concept the accountant deals with the two aspects of business transaction i.e.,

9. CLASSIFICATION OF ASSETS : THE Valuable things owned by the business are known as assets. These are the
properties owned by the business.
Classification of Assets Fixed Assets Liquid Assets Fictitious Assets Intangible Assets Wasting Assets
Fixed Assets: These assets are acquired for long-term use in the business. They are not ment for resale. Land, Building, plant
and machinery, vehicles and furniture etc., are some of the examples of fixed assets.
Liquid Assets : These assets also known as circulating, fluctuating or current assets. These
assets can be converted into cash as early as possible. Current assets are cash, bank
balance, debtors, stock, investments
Fictitious assets: Fictitious assets are those assets, which do not have physical form. They do not have any real
value. The examples of these assets are loss on issue of shares, preliminary expenses etc.
Intangible Assets: Intangible Assets are those having no physical existence. Goodwill, Patents,
Trademarks, are the examples.
Wasting Assets: Wasting Assets are those assets which are consumed through being worked or
used. Mines are the examples of wasting assets.

10. TYPES OF CAPITAL
1) Fixed capital: The amount of invested in
acquiring fixed assets is called fixed capital. Plant
and machinery, vehicles, furniture and building
etc., are some of the examples for fixed capital.
2) Working Capital: The part of capital available
with the firm for day-to-day working of the
business is known as working capital. Working
capital can also be expressed as under.
 Working Capital=Current Assets-Current Liabilities
 Working Capital=Current Assets-Current Liabilities
TYPES OF CAPITAL: Capital: It is the part of wealth which is used for further production and thus
capital consists of all current assets and fixed assets. Cash in Hand, Cash at bank, Building, Plant and
Machinery, furniture etc., are the capital of the business. Capital is classified as “Fixed capital and
Working capital”.

11. TYPES OF LIABILITIES
TYPES OF LIABILITIES :
Liabilities are the obligations or debts payable by the enterprise in future in the form of money or
goods. Liabilities can be classified as fixed, current and contingent liabilities.
1) Fixed Liabilities:
These liabilities are payable generally, after a long period. Capital, loans, debentures, mortgage etc., are its
examples.
2) Current Liabilities:
Liabilities payable with in a year are termed as current liabilities. The value of these liabilities goes on changing.
Creditors, bills payable, and outstanding expenses etc., are current liabilities.
3) Contingent Liabilities:
These are not the real liabilities. Future events can only decide whether it is really liability or not.

12. TYEPS OF TRANSACTION
TYPES OF TRANSACTION:
Any sale or purchase of goods or services is called the transaction.
Transaction are of three types.
1)Cash Transaction: Cash transaction is one where cash receipts are payment is involved in the
exchange
2) Credit Transaction: Credit Transaction will not have cash, either received or paid, for something
given or received, respectively. Credit transactions give rise to debtor and creditor relationship.
3) Non-cash Transaction: It is a transaction where the question of receipt or payment of cash does not
arise at all EX: Depreciation, return of goods etc

13. Personal
Accounts
Personal Accounts
also includes
accounts in the
names of firms,
companies or
institutions such
as Malini & sons
account,
Nagarjuna finance
limited account,
Andhra Bank
Account etc.
Real
Accounts
Accounts relating
to properties or
assets are known as
‘ Real Accounts’.
Every business
needs assets such
as machinery,
furniture etc., for
running its
activities. A
separate account is
maintained for each
asset owned by the
Business.
Nominal
accounts
Accounts relating to
expenses, losses
and incomes and
gains are known as ‘
Nominal Accounts’
Examples of
Nominal Account
Wages, salaries,
commission,
interest received
accounts.
CLASSIFICATION OF ACCOUNTS

14. “
”
Personal Account : Debit the receiver & Credit the giver
Real Accounts : Debit what comes in Credit what goes out
Nominal accounts : Debit all expenses and losses credit
all incomes and gain
Golden rule of accounting

15. JOURNAL Introduction
 The word is“Journal” is derived from the Latin word ‘Journ’ which means
a day. Therefore, journal means a day book where in day-to-day
business transactions are recorded in chronological order.

16. Ledger
 As stated above, all transactions, irrespective of their nature, are recorded in the journal in a
chronological order. After a certain period, if we want to know whether a particular account is
showing a debit or credit balance it becomes very difficult, so the ledger is designed to
accommodate the various accounts maintained by a trader.

17. TRIAL BALANCE
The first step in preparation of Final
Accounts is the preparation of Trial
Balance. In the double entry system of
book keeping, there will be credit for
every debit and there will not be any
debit without credit. The trail balance
generally does not include stock in
hand at the end of the period. All
adjustments required to be done at the
end of the period, including closing
stock, are generally given under the
trail balance. definition A trial balance
is a list of all the balances standing on
the Ledger accounts and cash Book of a
concern at any given data. “Spicer and
Pegler

18. FINAL ACCOUNTING
The trail balance marks a definite stage in the preparation of accounts. It indicates the all the transactions for a
particular period have been duly entered in the book, properly posted and balanced.
The agreement of trail balance proves two things:
1) The record has been made of both the aspects of each transaction;
2) The book are arithmetically accurate.
final accounts Trading & Profit & Loss A/C Balance Sheet

19. TRADING ACCOUNT, PROFIT & LOSS
ACCOUNT
The first step in the preparation of final
accounts is the preparation of the trading
account. The main purpose of preparing a
Trading Account
1) to ascertain gross profit and loss as a result
of buying and selling of goods; and 2) to enable
management to make a comparison of gross
profit or gross loss of the current year with
that of previous years.
PROFIT AND LOSS A/C
The Businessman is always interested in
knowing his net income or net profit. Net profit
represents the excess of gross profit plus other
revenue incomes over sales expense including
sales costs and other expenses. The debit side
of P&L a/c shows the expenses and the credit
side the incomes. If the total of the credit side
is more, it will be net profit. And if the debit
side happens to be more, it would be net loss
PROFIT LOSS ACCOUNT TRADING
ACCOUNT

20. This forms the
second part of the
Final Accounts.
It is prepared after
the trading and
profit and loss
accounts have been
complied and closed
.
A Balance Sheet may
be described as a
statement of the
financial position of
a concern at a given
date.
The financial
position of a
concern is revealed
by its assets on a
given date and its
liabilities on that
date. Excess of
assets over liabilities
represents Capital.
Such excess may be
taken as an indicator
of the financial
soundness of a
concern.
BALANCE SHEET