This document provides an introduction to key accounting concepts including:
1) It defines business events, transactions, and accounting as the process of identifying, measuring, recording, and communicating financial information.
2) Accounting has three main branches - financial, cost, and management accounting.
3) The main objectives of accounting are to record transactions, ascertain profit/loss, assess financial position, and communicate financial results to users.
4) Key accounting terms are defined such as assets, liabilities, capital, and sales. Accounting information should be reliable, relevant, understandable and comparable.
Here are some basics of accounting like its definition, steps involved in it, book-keeping, objectives of accounting, functions and limitations of accounting for the beginners.
It is been tried to explain all these things in a quite easy manner.
Hope that it matches what you were looking for.
The document discusses the differences between book-keeping, accounting, and accountancy. Book-keeping involves systematically recording financial transactions, accounting is book-keeping plus analyzing and interpreting transactions, and accountancy refers to the entire body of accounting theory and practice. It also defines key accounting terms and concepts.
Accounting can be viewed from both a structural and functional viewpoint. Structurally, accounting is both an art and a science - it applies established principles but also requires judgment. It records the financial history of a business. Functionally, accounting identifies financial transactions, measures resources and obligations, and communicates financial information to users for decision making. Accounting provides essential information to management and fulfills legal reporting requirements.
Accounting is defined as the art of recording, classifying, summarizing, analyzing, interpreting and communicating the results of financial transactions and events. It involves generating financial information through recording transactions, classifying accounts, preparing documents like the trial balance, income statement, balance sheet, and cash flow statement. The resulting financial information is used by internal parties like managers and directors, as well as external parties like investors, lenders, and government agencies.
This document provides an overview of basic accounting techniques and bookkeeping. It discusses accounting concepts like transactions, accounts, capital, liabilities, and the accounting equation. It describes the two stages of accounting - accounting and bookkeeping. Under bookkeeping, it explains journals, ledgers, trial balances and how they are used to prepare final accounts like trading accounts, profit and loss accounts, and balance sheets. The document also discusses types of accounts, types of transactions, classification of various accounts and different users of accounting information.
1. Accounting is the process of recording, classifying, and summarizing financial transactions and interpreting the results. Bookkeeping involves specifically recording transactions, while accounting also analyzes and communicates the results.
2. The key difference between bookkeeping and accounting is that bookkeeping records transactions, while accounting analyzes and interprets the results to determine profit/loss and financial position.
3. Financial statements like the income statement and balance sheet provide accounting information to various users to make informed decisions.
1. Accounting is the process of recording, analyzing, and communicating the financial transactions of a business. It involves recording transactions, classifying them, summarizing them into financial statements, analyzing the statements, and communicating the information.
2. The key accounting concepts and principles include entity, money measurement, periodicity, matching, accrual, cost, going concern, consistency, and conservatism. These concepts form the foundation for establishing accounting policies and preparing financial statements.
3. The main objectives of accounting are to systematically record transactions, ascertain the results of recorded transactions, determine the financial position of the business, and provide information to users for rational decision making.
This document provides an overview of accounting concepts, principles, and the accounting cycle. It discusses key topics such as [1] the purpose of accounting and accounting information systems, [2] the basic accounting model involving journal entries, ledgers, and trial balances, and [3] financial statements including the income statement, balance sheet, and statement of cash flows. It also covers [4] adjusting entries, worksheets, and closing entries to prepare the adjusted trial balance and financial statements at the end of each accounting period.
Here are some basics of accounting like its definition, steps involved in it, book-keeping, objectives of accounting, functions and limitations of accounting for the beginners.
It is been tried to explain all these things in a quite easy manner.
Hope that it matches what you were looking for.
The document discusses the differences between book-keeping, accounting, and accountancy. Book-keeping involves systematically recording financial transactions, accounting is book-keeping plus analyzing and interpreting transactions, and accountancy refers to the entire body of accounting theory and practice. It also defines key accounting terms and concepts.
Accounting can be viewed from both a structural and functional viewpoint. Structurally, accounting is both an art and a science - it applies established principles but also requires judgment. It records the financial history of a business. Functionally, accounting identifies financial transactions, measures resources and obligations, and communicates financial information to users for decision making. Accounting provides essential information to management and fulfills legal reporting requirements.
Accounting is defined as the art of recording, classifying, summarizing, analyzing, interpreting and communicating the results of financial transactions and events. It involves generating financial information through recording transactions, classifying accounts, preparing documents like the trial balance, income statement, balance sheet, and cash flow statement. The resulting financial information is used by internal parties like managers and directors, as well as external parties like investors, lenders, and government agencies.
This document provides an overview of basic accounting techniques and bookkeeping. It discusses accounting concepts like transactions, accounts, capital, liabilities, and the accounting equation. It describes the two stages of accounting - accounting and bookkeeping. Under bookkeeping, it explains journals, ledgers, trial balances and how they are used to prepare final accounts like trading accounts, profit and loss accounts, and balance sheets. The document also discusses types of accounts, types of transactions, classification of various accounts and different users of accounting information.
1. Accounting is the process of recording, classifying, and summarizing financial transactions and interpreting the results. Bookkeeping involves specifically recording transactions, while accounting also analyzes and communicates the results.
2. The key difference between bookkeeping and accounting is that bookkeeping records transactions, while accounting analyzes and interprets the results to determine profit/loss and financial position.
3. Financial statements like the income statement and balance sheet provide accounting information to various users to make informed decisions.
1. Accounting is the process of recording, analyzing, and communicating the financial transactions of a business. It involves recording transactions, classifying them, summarizing them into financial statements, analyzing the statements, and communicating the information.
2. The key accounting concepts and principles include entity, money measurement, periodicity, matching, accrual, cost, going concern, consistency, and conservatism. These concepts form the foundation for establishing accounting policies and preparing financial statements.
3. The main objectives of accounting are to systematically record transactions, ascertain the results of recorded transactions, determine the financial position of the business, and provide information to users for rational decision making.
This document provides an overview of accounting concepts, principles, and the accounting cycle. It discusses key topics such as [1] the purpose of accounting and accounting information systems, [2] the basic accounting model involving journal entries, ledgers, and trial balances, and [3] financial statements including the income statement, balance sheet, and statement of cash flows. It also covers [4] adjusting entries, worksheets, and closing entries to prepare the adjusted trial balance and financial statements at the end of each accounting period.
Accounting identifies, measures, records, and communicates economic transactions. It has two main branches: financial accounting provides information to external users, while management accounting provides information internally. The legal structure of a business determines aspects like the number of owners, their liability, capital raising, and financial reporting requirements. Limited companies must publicly disclose annual financial statements to inform present and potential investors, employees, lenders, suppliers, customers, governments, and the public.
Accounting serves as a language of business by communicating results of business operations to stakeholders like owners, creditors, investors, and the government. It records, classifies, and summarizes financial transactions and events in a meaningful manner using money values. Accounting provides quantitative financial information to allow informed decisions by users. It is defined as an information system that measures and reports on the resources controlled by a business and the financing of its operations.
Acc0101. Meaning and Scope of AccountingCPT Success
Accounting involves recording, classifying, summarizing, analyzing, interpreting and communicating financial transactions and events. It includes journal entries, a ledger, a trial balance, income statements, balance sheets, and cash flow statements. The results are used by internal managers and external parties like investors, lenders, and government agencies. Accounting provides information for decision making, compares performance over time, identifies weaknesses for control, and supplies data for taxes and regulation.
This document provides an overview of management accounting. It defines accounting as the process of recording, classifying, summarizing, analyzing and interpreting financial transactions of a business. It then discusses the three branches of accounting: financial accounting, cost accounting, and management accounting. Financial accounting is concerned with preparing financial statements to ascertain results and financial position. However, financial accounting has limitations and does not provide all the information managers need for planning, decision making, and control. Management accounting aims to address these limitations.
Accounting for Entrepreneurs.
Presented by: Ms. Rand Marar, GOL Trainer
Socialize your Business, Maadi Public Library, Cairo, Egypt.
Organized by IRC, US-Embassy in Cairo
26 March, 2013
This document provides definitions and explanations of key terms related to financial statement analysis and accounting. It defines financial as related to money and finance, and financial statement as a summarized presentation of a business's financial position. Financial statement analysis involves preparing and analyzing key statements like the balance sheet, income statement, and cash flow statement to assess a business's performance and financial health. The document also discusses the accounting process of systematically recording, classifying, summarizing, analyzing and reporting business transactions and events.
Management accounting assists managers in planning, organizing, and controlling business operations. It provides accounting data and analysis to help managers make informed decisions. Management accounting focuses on future forecasts and helps evaluate options such as whether to invest in new equipment or acquire another company. Management accountants use tools like ratio analysis and investment appraisal to assess financial performance and identify opportunities to improve and grow the business.
Here are the journal entries for the transactions under the British approach:
1. Ajit's Capital A/c Dr. To Cash A/c (Capital introduced)
(Personal, Real)
2. Bank A/c Dr. To Cash A/c (Deposit into bank)
(Real, Real)
3. Purchase A/c Dr. To Cash A/c (Goods purchased for cash)
(Nominal, Real)
4. Cash A/c Dr. To Sales A/c (Goods sold for cash)
(Real, Nominal)
5. Furniture A/c Dr. To Bank A/c (Furniture purchased by cheque)
This document provides an introduction to financial accounting. It defines accounting as the process of capturing, organizing, and reporting financial transactions of a business. Key terms are defined, including assets, liabilities, and equity. The basic accounting equation is explained as assets equal liabilities plus owner's equity. Financial statements like the balance sheet, income statement, and cash flow statement are summarized. The balance sheet reports assets, liabilities, and equity at a point in time, while the income statement reports profits and losses over a period. The cash flow statement reports cash inflows and outflows from operating, investing, and financing activities. In conclusion, financial accounting provides important financial information to both internal and external users of a business.
This document discusses the scope and importance of accounting. It explains that accounting involves installing accounting systems, recording business transactions, and preparing annual accounts. Accounting is important as it allows businesses to keep systematic records, protect assets, determine profits and losses, and facilitate decision making. The document also introduces the accounting equation and double-entry bookkeeping system. It states that the accounting equation represents the relationship between a business's assets, liabilities, and owner's equity, and is the foundation of double-entry bookkeeping. Double-entry bookkeeping requires that every transaction has equal debits and credits recorded, following the accounting equation.
Financial and management accounting notes @ mba bkBabasab Patil
This document provides an overview of financial and management accounting. It discusses key topics such as the definition of accounting, the differences between financial and management accounting, accounting standards, books of accounts, financial statements, ratio analysis, fund flow statements, cash flow statements, budgeting, and capital budgeting. The document is divided into 6 units that will cover these various accounting concepts and techniques in more depth across 15 lessons.
This document provides an overview of accounting, including its objectives, branches, users of information, and the accounting cycle. It discusses how accounting involves identifying, measuring, recording, classifying, summarizing, analyzing, and communicating financial transactions. The main branches covered are financial accounting, managerial accounting, cost accounting, tax accounting, and forensic accounting. The accounting cycle includes preparing vouchers, journal entries, ledger entries, trial balances, and financial statements. Finally, it outlines the internal and external users that rely on accounting information for decision making.
This document provides an overview of accounting and financial management concepts. It discusses how accounting identifies, records, and communicates financial information. Key topics covered include the accounting equation, assets, liabilities, equity, revenues and expenses. Transaction analysis examples are provided to illustrate adjusting accounting entries for purchases and payments. The purpose of accounting is to provide relevant and reliable financial information to both internal and external stakeholders of a business.
This document provides an overview of accounting as an information system. It discusses key topics such as the definitions of accounting and information systems, the differences between financial and management accounting, the users of accounting information, and the accounting cycle. It also covers accounting principles, concepts, and conventions like accrual, going concern, consistency and conservatism. The purpose of accounting is to provide quantitative financial information to help users make informed economic decisions. Accounting acts as an information system that collects, processes, and communicates useful data to both internal and external parties.
Fundamentals of accounting showcased the basic approach to understanding and managing accounting systems in a simplified manner. Personnel in accounting and financial reporting roles would find the presentation a practice and refresher material for successful bookkeeping and financial reports.
Accounting is the process of identifying, classifying and recording business transactions to provide financial information to internal and external users. It involves measuring, interpreting, and communicating financial information to support decision making. There are various types of accounting, including financial accounting, management accounting, and cost accounting. Financial accounting focuses on preparing external financial reports based on generally accepted accounting principles, while management and cost accounting provide information for internal decision making and cost control.
UNIT - I: INTRODUCTION TO ACCOUNTING: Meaning – Definition – Scope - Objectives
of Accounting - GAAP - Accounting Concepts and conventions - Management Accounting Vs.
Cost Accounting vs. Financial Accounting -Importance of Management Accounting.
This document provides an introduction to accounting principles for a course. It defines accounting and discusses its purpose of providing financial information to various stakeholders. It outlines the accounting process of recording, classifying, summarizing and interpreting financial data. It also describes the different types of business organizations and operations. The document provides learning outcomes and course materials covering accounting fundamentals and specialized accounting fields to equip students for the business environment.
An accountant plays several important roles in an organization. They record all financial transactions to maintain accurate books of accounts, which helps with planning, decision making, coordination, control, communication, and replacing memory. Properly maintained financial records are required for taxation, auditing, and presenting evidence in court. Accountants also assist with tax planning, financial services advice, and statutory and internal auditing. Overall, accountants are crucial to an organization's success by providing timely and accurate financial information needed for effective management and operations.
This document provides an introduction to basic accounting concepts. It defines accounting as the process of recording business transactions systematically to determine profit or loss and financial position. Key concepts discussed include the accounting equation, assets, liabilities, transactions, debits and credits, the accounting cycle, and the need for systematic record keeping in business.
Modeling in the Real World - at LavaCon2014 in Portland, ORBram Wessel
The document discusses modeling experiences in the real world. It uses the example of a persona, Julia, who gets interested in wine on a photography shoot. Her journey of learning about wine involves interacting with different companies and their digital and physical offerings. The speaker emphasizes the importance of understanding customer and business goals, modeling the end-to-end experience, and having the right information infrastructure and resources to deliver an integrated omni-channel experience across organizations.
Accounting identifies, measures, records, and communicates economic transactions. It has two main branches: financial accounting provides information to external users, while management accounting provides information internally. The legal structure of a business determines aspects like the number of owners, their liability, capital raising, and financial reporting requirements. Limited companies must publicly disclose annual financial statements to inform present and potential investors, employees, lenders, suppliers, customers, governments, and the public.
Accounting serves as a language of business by communicating results of business operations to stakeholders like owners, creditors, investors, and the government. It records, classifies, and summarizes financial transactions and events in a meaningful manner using money values. Accounting provides quantitative financial information to allow informed decisions by users. It is defined as an information system that measures and reports on the resources controlled by a business and the financing of its operations.
Acc0101. Meaning and Scope of AccountingCPT Success
Accounting involves recording, classifying, summarizing, analyzing, interpreting and communicating financial transactions and events. It includes journal entries, a ledger, a trial balance, income statements, balance sheets, and cash flow statements. The results are used by internal managers and external parties like investors, lenders, and government agencies. Accounting provides information for decision making, compares performance over time, identifies weaknesses for control, and supplies data for taxes and regulation.
This document provides an overview of management accounting. It defines accounting as the process of recording, classifying, summarizing, analyzing and interpreting financial transactions of a business. It then discusses the three branches of accounting: financial accounting, cost accounting, and management accounting. Financial accounting is concerned with preparing financial statements to ascertain results and financial position. However, financial accounting has limitations and does not provide all the information managers need for planning, decision making, and control. Management accounting aims to address these limitations.
Accounting for Entrepreneurs.
Presented by: Ms. Rand Marar, GOL Trainer
Socialize your Business, Maadi Public Library, Cairo, Egypt.
Organized by IRC, US-Embassy in Cairo
26 March, 2013
This document provides definitions and explanations of key terms related to financial statement analysis and accounting. It defines financial as related to money and finance, and financial statement as a summarized presentation of a business's financial position. Financial statement analysis involves preparing and analyzing key statements like the balance sheet, income statement, and cash flow statement to assess a business's performance and financial health. The document also discusses the accounting process of systematically recording, classifying, summarizing, analyzing and reporting business transactions and events.
Management accounting assists managers in planning, organizing, and controlling business operations. It provides accounting data and analysis to help managers make informed decisions. Management accounting focuses on future forecasts and helps evaluate options such as whether to invest in new equipment or acquire another company. Management accountants use tools like ratio analysis and investment appraisal to assess financial performance and identify opportunities to improve and grow the business.
Here are the journal entries for the transactions under the British approach:
1. Ajit's Capital A/c Dr. To Cash A/c (Capital introduced)
(Personal, Real)
2. Bank A/c Dr. To Cash A/c (Deposit into bank)
(Real, Real)
3. Purchase A/c Dr. To Cash A/c (Goods purchased for cash)
(Nominal, Real)
4. Cash A/c Dr. To Sales A/c (Goods sold for cash)
(Real, Nominal)
5. Furniture A/c Dr. To Bank A/c (Furniture purchased by cheque)
This document provides an introduction to financial accounting. It defines accounting as the process of capturing, organizing, and reporting financial transactions of a business. Key terms are defined, including assets, liabilities, and equity. The basic accounting equation is explained as assets equal liabilities plus owner's equity. Financial statements like the balance sheet, income statement, and cash flow statement are summarized. The balance sheet reports assets, liabilities, and equity at a point in time, while the income statement reports profits and losses over a period. The cash flow statement reports cash inflows and outflows from operating, investing, and financing activities. In conclusion, financial accounting provides important financial information to both internal and external users of a business.
This document discusses the scope and importance of accounting. It explains that accounting involves installing accounting systems, recording business transactions, and preparing annual accounts. Accounting is important as it allows businesses to keep systematic records, protect assets, determine profits and losses, and facilitate decision making. The document also introduces the accounting equation and double-entry bookkeeping system. It states that the accounting equation represents the relationship between a business's assets, liabilities, and owner's equity, and is the foundation of double-entry bookkeeping. Double-entry bookkeeping requires that every transaction has equal debits and credits recorded, following the accounting equation.
Financial and management accounting notes @ mba bkBabasab Patil
This document provides an overview of financial and management accounting. It discusses key topics such as the definition of accounting, the differences between financial and management accounting, accounting standards, books of accounts, financial statements, ratio analysis, fund flow statements, cash flow statements, budgeting, and capital budgeting. The document is divided into 6 units that will cover these various accounting concepts and techniques in more depth across 15 lessons.
This document provides an overview of accounting, including its objectives, branches, users of information, and the accounting cycle. It discusses how accounting involves identifying, measuring, recording, classifying, summarizing, analyzing, and communicating financial transactions. The main branches covered are financial accounting, managerial accounting, cost accounting, tax accounting, and forensic accounting. The accounting cycle includes preparing vouchers, journal entries, ledger entries, trial balances, and financial statements. Finally, it outlines the internal and external users that rely on accounting information for decision making.
This document provides an overview of accounting and financial management concepts. It discusses how accounting identifies, records, and communicates financial information. Key topics covered include the accounting equation, assets, liabilities, equity, revenues and expenses. Transaction analysis examples are provided to illustrate adjusting accounting entries for purchases and payments. The purpose of accounting is to provide relevant and reliable financial information to both internal and external stakeholders of a business.
This document provides an overview of accounting as an information system. It discusses key topics such as the definitions of accounting and information systems, the differences between financial and management accounting, the users of accounting information, and the accounting cycle. It also covers accounting principles, concepts, and conventions like accrual, going concern, consistency and conservatism. The purpose of accounting is to provide quantitative financial information to help users make informed economic decisions. Accounting acts as an information system that collects, processes, and communicates useful data to both internal and external parties.
Fundamentals of accounting showcased the basic approach to understanding and managing accounting systems in a simplified manner. Personnel in accounting and financial reporting roles would find the presentation a practice and refresher material for successful bookkeeping and financial reports.
Accounting is the process of identifying, classifying and recording business transactions to provide financial information to internal and external users. It involves measuring, interpreting, and communicating financial information to support decision making. There are various types of accounting, including financial accounting, management accounting, and cost accounting. Financial accounting focuses on preparing external financial reports based on generally accepted accounting principles, while management and cost accounting provide information for internal decision making and cost control.
UNIT - I: INTRODUCTION TO ACCOUNTING: Meaning – Definition – Scope - Objectives
of Accounting - GAAP - Accounting Concepts and conventions - Management Accounting Vs.
Cost Accounting vs. Financial Accounting -Importance of Management Accounting.
This document provides an introduction to accounting principles for a course. It defines accounting and discusses its purpose of providing financial information to various stakeholders. It outlines the accounting process of recording, classifying, summarizing and interpreting financial data. It also describes the different types of business organizations and operations. The document provides learning outcomes and course materials covering accounting fundamentals and specialized accounting fields to equip students for the business environment.
An accountant plays several important roles in an organization. They record all financial transactions to maintain accurate books of accounts, which helps with planning, decision making, coordination, control, communication, and replacing memory. Properly maintained financial records are required for taxation, auditing, and presenting evidence in court. Accountants also assist with tax planning, financial services advice, and statutory and internal auditing. Overall, accountants are crucial to an organization's success by providing timely and accurate financial information needed for effective management and operations.
This document provides an introduction to basic accounting concepts. It defines accounting as the process of recording business transactions systematically to determine profit or loss and financial position. Key concepts discussed include the accounting equation, assets, liabilities, transactions, debits and credits, the accounting cycle, and the need for systematic record keeping in business.
Modeling in the Real World - at LavaCon2014 in Portland, ORBram Wessel
The document discusses modeling experiences in the real world. It uses the example of a persona, Julia, who gets interested in wine on a photography shoot. Her journey of learning about wine involves interacting with different companies and their digital and physical offerings. The speaker emphasizes the importance of understanding customer and business goals, modeling the end-to-end experience, and having the right information infrastructure and resources to deliver an integrated omni-channel experience across organizations.
This document discusses accounting concepts such as transactions, bookkeeping, and the differences between single-entry and double-entry accounting systems. It defines a transaction as a financial activity between two parties that involves an exchange of goods, services, or future payment. Bookkeeping is described as the systematic recording of financial transactions and is part of the accounting process. The objectives of bookkeeping are to provide financial data to management and maintain a permanent record of transactions. Double-entry accounting is said to provide a more complete and accurate reflection of a business's financial condition compared to single-entry accounting through features like a balanced trial balance.
This document provides definitions and explanations of key concepts in bookkeeping and accounting. It defines bookkeeping as recording business transactions in an organized manner. The double-entry system is described as recording each transaction with two entries, one as a debit and one as a credit. Advantages of the double-entry system include ensuring accuracy, enabling calculation of profits, and preventing fraud. Disadvantages include the cost and complexity of maintaining multiple accounting records.
Bookkeeping and accountancy are related but distinct concepts. Bookkeeping involves systematically recording business transactions in primary accounting books. It provides the source data for accountancy. Accountancy analyzes and interprets the bookkeeping records to prepare financial statements and reports that evaluate business performance and financial position. The key objectives of accountancy are to determine profit or loss, assess the financial position of the business, and provide information to stakeholders like managers, investors and the government.
It is the system in which both the aspects i.e. debit as well as credit are recorded in the books of accounts .It records transactions relating to all the accounts i.e. personal, real and nominal.
1) The document provides an overview of key accounting concepts including the definition of accounting, functions and objectives of accounting, advantages and limitations of accounting, book keeping, types of accounting information, subfields of accounting, qualitative characteristics of accounting information, and more.
2) It describes key accounting terms like assets, liabilities, receipts, expenses, expenditures, business transactions, accounts, capital, drawings, profit, loss, goods, purchases, and more.
3) The document explains accounting concepts like double entry system of bookkeeping, types of assets and liabilities, types of receipts and expenditures, classification of accounts, and more.
Accounting is the process of recording, classifying, and summarizing financial transactions and interpreting the results. It involves maintaining systematic records, ascertaining profits and losses, determining financial position, providing information to users, and assisting management. The accounting cycle includes recording transactions in source documents and journals, posting to ledger accounts, preparing a trial balance, and ultimately financial statements. Accounting provides quantitative and qualitative information to internal and external users for decision making.
PPT - XIACC Chapter 1 - Introduction of accounting177.pptxLohrii
Accounting involves systematically recording, classifying, summarizing, analyzing and communicating financial information about an entity. It identifies financial transactions, measures them in money terms, records them in journals or subsidiary books, and classifies them in ledgers. In addition to bookkeeping, accounting also includes summarizing transactions in trial balances, income statements and balance sheets, analyzing results, and communicating financial data to stakeholders. The overall goal is to provide useful information to decision makers.
Accounting records, classifies, and summarizes business transactions to provide financial information to both internal and external users. It aims to determine profits and financial position, facilitate management control, and assess tax liability. However, accounting has limitations as it uses monetary values and estimates, and may be manipulated. The main accounting systems are cash basis, accrual basis, and mixed basis. Stakeholders like shareholders, creditors, management, employees, and the government rely on accounting information for decision making.
Accounting involves identifying, measuring, recording, classifying, summarizing, and communicating financial information about an entity's economic activities. It is the process of recording, classifying, and summarizing financial transactions and analyzing, verifying, and reporting the results. The double-entry system is used, in which every transaction has equal and opposite effects in at least two different accounts. This ensures accuracy and consistency in accounting. There are three main types of accounts - real, personal, and nominal - which are used to record different types of financial transactions following specific debit and credit rules.
Accounting can be defined as the process of recording, classifying, and summarizing financial transactions and interpreting the results. The double-entry system is used, where every transaction has equal and opposite effects in at least two accounts. There are three types of accounts: real, personal, and nominal. Financial statements like the balance sheet and income statement are prepared to provide information to internal and external users of the accounting information. Accounting helps management make decisions and ensures the accuracy of financial records through the accounting equation of assets equaling liabilities plus equity.
Accounting provides essential information to both internal and external users of a business. It records financial transactions, classifies them, and summarizes the results to determine profit/loss and the overall financial position. The key objectives of accounting are to keep systematic records, calculate profit/loss, ascertain the financial position, and provide useful data to management, owners, investors, creditors, and other stakeholders. While accounting is useful for planning, decision-making and control, its information is limited by relying on estimates, judgments, and historical data rather than current market values.
Accounting involves three key activities: identifying economic events, measuring them in monetary terms, and communicating this financial information to users. Only accountable events that affect assets, liabilities or equity are recognized in the financial statements through journal entries. Non-accountable events may be disclosed in notes if relevant. External events involve transfers with other parties while internal events are from within the entity, like production. Financial information aims to meet users' decision-making needs and is governed by accounting standards like PFRS.
Here are the journal entries for the transactions:
April 1:
Machinery A/c Dr. 12,000
Building A/c Dr. 15,000
Capital A/c (Ashok) Cr. 27,000
April 3:
Bank A/c Dr. 5,000
Cash A/c Cr. 5,000
April 5:
Purchase A/c Dr. 5,000
Creditors (Vishal) A/c Cr. 5,000
April 7:
Debtors A/c Dr. 3,000
Sales A/c Cr. 3,000
This powerpoint presentation is created by Gyanbikash.com for the students of class nine to ten from their accounting NCTB textbook for multimedia class.
1. Bookkeeping is the process of recording financial transactions and events, while accounting involves summarizing and interpreting the results of bookkeeping.
2. The key differences between bookkeeping and accounting are that bookkeeping is routine and focuses on maintaining records, while accounting is analytical and focuses on interpreting results and communicating them to interested parties.
3. The objectives of accounting are to maintain systematic financial records, ascertain profits and losses, ascertain the financial position, assist management decision making, and prevent fraud. Accounting provides reliable and relevant financial information to both internal and external users.
This document provides an introduction to basic accounting principles. It discusses how accounting involves systematically recording all business transactions and defines bookkeeping as the process of recording these transactions. Accounting is then defined as the analysis and interpretation of the bookkeeping records to prepare financial statements.
Several key accounting terms are defined, including assets, equity, capital, liability, revenue, and expenses. The accounting cycle is described as the process of initially recording transactions in a journal, transferring them to ledger accounts, preparing a trial balance, and ultimately final accounts and a balance sheet. Finally, the document discusses accounting assumptions like going concern and accrual basis, and different systems for recording transactions like single and double entry.
Introduction
Needs and Role of Accounting
System of Accounting
Branches of Accounting
Objectives of Accounting
Generally Accepted Accounting principles : (Accounting Concepts and Conventions)
Documents in Accounting
This document provides an introduction to basic accounting principles. It defines key accounting terms like assets, equity, revenue, expenses, and drawings. It explains the accounting cycle which involves recording transactions in a journal, posting to ledgers, preparing a trial balance, and ultimately financial statements like the income statement and balance sheet. It also outlines the different accounting methods and classifications of accounts. The goal is to introduce the reader to the fundamentals of accounting and bookkeeping.
This document provides an introduction to basic accounting principles. It defines key accounting terms like assets, equity, capital, liability, revenue, and expenses. It also explains the accounting cycle which involves recording transactions in a journal, posting to ledgers, preparing a trial balance, and ultimately financial statements like the income statement and balance sheet. Additionally, it discusses the different accounting methods, classifications of accounts, rules of debit and credit, and how transactions are recorded in a journal. The overall purpose is to establish the foundational concepts and process of accounting.
This document provides an introduction to basic accounting principles. It defines key accounting terms like assets, equity, capital, liability, revenue, and expenses. It also explains the accounting cycle which involves recording transactions in a journal, posting to ledgers, preparing a trial balance, and ultimately financial statements like the income statement and balance sheet. Additionally, it discusses the different accounting methods, classifications of accounts, rules of debit and credit, and how transactions are recorded in a journal. The overall purpose is to establish the foundational concepts and process of accounting.
This document provides an overview of accounting. It defines accounting as identifying, measuring, and communicating economic information to allow for informed decisions. It outlines the objectives and scope of accounting and distinguishes between bookkeeping, accounting, and accountancy. It also discusses the interested parties in accounting information, the branches of accounting including financial, cost, and management accounting, and the advantages and limitations of accounting.
Accounting involves recording financial transactions and events in terms of money. It provides tools to track assets, liabilities, profits and cash flows through financial statements. Accounting serves various stakeholders and specialized fields. Private accounting works within a business, while public accounting has multiple clients. Accounting records transactions using debits and credits in accordance with standards to communicate financial information.
The document provides an overview of accounting concepts and principles for an MBA course. It defines bookkeeping and accounting, explains the double-entry system of bookkeeping, and covers key accounting concepts like the accounting equation, revenue and expense recognition, and accounting conventions like materiality and consistency. It also provides examples of journal entries and how to record transactions in ledger accounts.
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.
Taurus Zodiac Sign: Unveiling the Traits, Dates, and Horoscope Insights of th...my Pandit
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Accounts notes
1. CHAPTER 1
INTRODUCTION TO ACCOUNTING
Business Events – Those events which occur in the normal operation of
a business like, sale and purchase of goods are called business events
Types of Business Events – There are two types of business events.
1. Monetary Events – Those business events that can be
expressed in monetary terms are called monetary events. These
affect the financial position of the business. For example, sale
and purchase of goods.
2. Non Monetary Events – Those events that cannot be expressed
in monetary terms like, recruitment of an employee are called
non-monetary events.
NOTE: In accountancy, only monetary events are recorded in the
books of account, ignoring the non-monetary events.
Business Transactions – Those financial transactions or events which
are measured and recorded in monetary terms in the books of account
are called business transactions. These transactions affect the financial
position of an enterprise.
Accounting– Accounting is an art of identifying, measuring, recording,
classifying and summarising the transactions or events (in monetary
terms) and analysing and communicating the financial results of
business to the various interested parties.
2. Book Keeping and Accounting
Basis Book Keeping Accounting
(1) Scope Book keeping is
concerned with
identifying the financial
transactions measuring,
recording and classifying
them.
Accounting is concerned
with summarising the
recorded transactions,
interpreting the results
thereof.
(2) Objective The objective of Book-
Keeping is to maintain
systematic records of
financial transactions.
The objective of
accounting is to ascertain
results of operations and
financial position of
business and to
communicate
information to the
interested users.
(3) Relation Book–Keeping is the
basic for Accounting.
Accounting begins where
Book – Keeping ends.
(4) Special
skills
Book-keeping is
mechanical in nature and
thus does not require
special skills.
Accounting requires
special skill and ability
to analyse and interpret
the results thereof.
(5) Nature of
job
This job is critical and
routine in nature.
This job is analytical and
dynamic in nature.
Functions of Accounting
1. Identifying the events to be recorded in the books of account
2. Measuring the events in the monetary terms
3. Recording the financial events in the books of accounts
4. Classifying the recorded transaction into their respective
3. groups (accounts) in the ledger (a book having different
accounts). The transactions relating to the similar nature are
posted under the same head. For example, all cash sales
related transactions are recorded in the Sales Account.
5. Summarising the classified event in such a manner (Trial
Balance, Profit and Loss Account and Balance Sheet)
which can be understood by different accounting users
without any ambiguity
6. Analysing the summarised data by using different tools of
analysis, according to the needs of different users of
accounting information
7. Communicating the accounting information to various users
and the interested parties
Branches of Accounting
Depending on different accounting users’ interests vested in a
business, accounting is sub-divided into three branches:
1. Financial Accounting primarily deals with identifying,
recording, summarising the transactions and analysing and
communicating the financial results to various users of
accounting information.
2. Cost Accounting is primarily concerned with estimating the
cost of production by ascertaining cost of inputs and
accordingly facilitating the pricing policy of the final output
4. of the business. It helps in cost controlling and checking the
viability of expenses incurred and reducing cost
inefficiencies.
3. Management Accounting basically caters to the managerial
need of accounting information, i.e. gathering accounting
information for the need of the management for designing
various policy measures. Cash Flow Statements, Cash
Budgeting and Ratio Analysis are the prime tools of
Management Accounting.
Accountancy
Accountancy is the science or study of accounting. It explains the
need and purpose of accounting and also explains various principles and
conventions that are used in the accounting process and imparts know-
how of preparing accounts and presenting and communicating
accounting information in a summarised form to various users of
accounting information.
Difference Between Book Keeping and Accounting
Book Keeping is an art of recording and classifying the transactions in
a systematic manner, whereas accounting in addition to Book Keeping
also includes summarising, analyisng and communicating financial
results to various interested parties.
Objectives of Accounting
5. Recording of transaction in the chronological order
Ascertaining profit and loss made during an accounting period
Assessing the financial position of the business
Communicating the accounting information and financial results
to various users
Locating, rectifying and preventing errors and frauds
Assessing and analysing the progress of the business by
conducting inter-firm and intra-firm comparisons
Advantages of Accounting
Provides permanent records of transactions Helps in recalling
the transactions Assists management to perform various activities like,
planning and controlling
Accounting records can be used as an evidence in the court of
law
Acts as ready source
of accounting information to various interested parties and users
Limitations of Accounting
(1) Accounting is not fully exact: Although most of the
transactions are recorded on exact basis but some estimations are also
made for calculating profit or loss. These estimations may be different
from person to person and make the accounting results different.
(2) Accountingignores qualitative elements: Accounting contains only
the monetary aspects and qualitative aspects like quality of management
and labour etc. are ignored. These qualitative elements have a vital
bearing on the profitability of the business.
6. (3) Ignores Price Level change- Accounting statements are prepared at
historical cost. They do not show the effect of changes in price level.
They may not help in judging the true financial position in case of price
fluctuation.
(4) Unsuitable for Forecasting- Financial Accounts show the record of
past events. Due to continuous changes in business environment,
financial analysis based on past events may not be of much use for
forecasting.
(5) Affected by Window Dressing- Window Dressing refers to a practice
of manipulating the accounts so as to show a better position than actual.
Hence correct decisions cannot be taken on the basis of such financial
position.
Accounting Information
Accounting information refers to the accounting data which are
presented in such a manner that they are understandable to various
accounting users.
Accounting information is in the form of financial statements,
financial reports etc.
Qualitative Characteristics of Accounting Information
The accounting information besides being true and fair must also
bear the following qualities:
Reliable – All accounting information must be supported by
verifiable evidences.
Relevance – Accounting information must fulfill the legal
7. requirements and should also disclose the items which are material.
Understandability – Accounting information should be
presented in such a manner that it is easily understood and interpreted
without any ambiguity to all users of the accounting information.
Comparable – Accounting information should be comparable,
so that both inter-firm as well as intra-firm comparisons are possible to
assess the progress of the business.
Chapter- 2
Basic Terms in Accounting
8. Assets– Assets are the right of ownership of the business on its physical
properties (called tangible assets) or on non-physical properties (called
intangible assets). Both the rights are measured and recorded in
monetary terms in the books of account.
Types of assets are given below :
(a) Fixed Assets-Fixed assets are those assets, which are purchased /
acquired for long term operating the business and they are not meant for
resale.
e.g.- Land, Building, Machinery, Patents and Trade Marks, etc
(b) Current Assets-Current assets are those assets, which are held in the
business day to day functioning of the business. They are held for short
period and are readily convertible into cash.
e.g.- Debtors, Bills Receivables, Unsold goods ( Stock),etc
(c) Tangible Assets- They are the assets, which have physical
existence. They can be seen and touched.
e.g. Land, Building, Computer etc.
(d) Intangibles Assets-They are the assets which do not have any
physical form i.e. Theycan’t be seen and touched.
e.g. – Goodwill, Trademark, Patents , Technical Knowhow etc.
(e) Wasting Assets- Wasting assets are those natural resources, which
are consumed during the practice of use, such as rewinds and oil
wells. As soon as the minerals have been extracted rewinds become
valueless. e.g. - mines , quarries etc.
Liabilities– Those amount which the business is liable to pay are called
liabilities. For example, creditors, capital invested by the owner, bank
9. overdraft, etc.
Classification of Liabilities
Contingent Liabilities – Contingent liabilities refer to the amount that
may or may not become liability depending on the outcome of a future
event. In other words, these are potential liabilities. These liabilities are
not shown in the Balance Sheet, but are shown as footnote of the
Balance Sheet.
Capital – The amount invested (either in form of cash or assets) by the
proprietor in the business is called capital. Capital is a liability for the
business, as the business is liable to pay back the amount of capital to
the proprietor.
Drawings– The amount withdrawn in cash or in form of other asset like,
goods withdrawn from business by the proprietor is called drawings.
Drawings reduce the amount of capital of the business.
Sales– The sale of goods either in cash or in credit are called sales.
Revenues– The amount which is either received or receivable from
various business operations like, sale of goods, interest, dividend, rent
etc. are called revenue.
Expenses – The amount that are incurred for generating revenue are
called expenses.
For example, purchase of goods, payment of wages, etc.
Expenditure – Amount spent or liabilities incurred for the purchase of
goods and services and for acquiring assets are called expenditure. For
10. example, purchase of machinery on credit, or cash is expenditure for the
business.
Capital Expenditure – Expenditures that are incurred for the purchase
of fixed assets like, machinery, building, land, etc. are called capital
expenditure. This expenditure is of capital nature, as the benefits of these
expenditures can be availed for a long period of time.
Revenue Expenditure – Expenditure that are incurred during a normal
operation of business, like rent paid, salaries, are called revenue
expenditures. The benefits of this expenditure are availed only for one
accounting period.
Profit – Profit refers to the excess of revenue over its related expense.
Algebraically, Profit = Revenue – Expense
Gain – Gain refers to the profit from non-recurring business
transaction. For example, profit on sale of machine of Rs 2,000 is
considered as gain, as sale of machine is non-recurring in nature.
Loss – Loss refers to the excess of expense over its related revenue. For
example, loss on sale of machinery.
Discount – It refers to:
11. Deduction in the sale price of goods and serv
Trade discount – Generally this discount is allowed on the list price of
the goods from whole seller to retailer or when goods are sold in bulk
Cash Discount – This discount is allowed for spontaneous payment.
This discount is allowed only when the payment is made.
Discount Allowed – This discount is allowed when payment from the
debtors is received.
Discount Received – This discount is received when payment is made
to the creditors.
Voucher – Voucher is an evidential document containing details of a
transaction.
Some examples of voucher are bill, receipt, cash memo, etc.
Goods – Those items which are produced or purchased with an
intention to sell in the main course of a business are called goods. For
example, furniture produced is considered as goods for a furniture
company.
Stock – Goods which are held by a firm for the purpose of sale in the
normal course of the business are called stock.
Debtors – Persons who owe amount to the business on account of credit
sales of goods and services are called debtors.
Creditors – Person to whom business owe amount on account of credit
purchases of goods and services are called creditors.