Accounting involves identifying, measuring, and communicating financial information about an organization. It aims to provide useful data to both internal and external users to help them make informed decisions. The accounting cycle involves recording transactions, preparing trial balances, making adjustments, and generating financial statements. Generally accepted accounting principles (GAAP) and concepts like the business entity, money measurement, and matching principles provide guidelines for accountants.
This document provides an overview of key concepts in accounting theory and principles, including:
1) It defines common accounting terms like assets, liabilities, capital, revenues, and expenses. It also distinguishes between current and non-current assets/liabilities.
2) It outlines important accounting principles like business entity, dual aspect, accounting period, going concern, cost, and matching.
3) It discusses the objectives of accounting, accounting records like vouchers, and concepts like materiality, full disclosure, consistency and objectivity in financial reporting.
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.
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 accounting concepts. It defines bookkeeping as recording business transactions and accounting as identifying, measuring and communicating economic information. It discusses the objectives, methods, types of accounts and branches of accounting. Single entry records only cash transactions while double entry records all transactions with equal debits and credits. Accounts are categorized as personal, real or nominal. The three branches of accounting are financial, cost and management accounting. In summary, the document serves as an introductory guide to foundational accounting terminology and principles.
Accounting is defined as the art of Recording, Classifying and Summarizing transactions in monetary terms (in Money terms) for preparation of Financial Statements
Book- keeping includes recording of journal, posting in ledgers and balancing of accounts. All the records before the preparation of trail balance is the whole subject matter of book- keeping.
Accounting, is an information system is the process of identifying, measuring and communicating the economic information of an organization to its users who need the information for decision making.
This document provides an overview of key accounting concepts and principles. It defines accounting as the process of identifying, measuring and communicating financial information. The main functions of accounting are to keep systematic financial records, protect business assets, and communicate results to interested parties. Key concepts discussed include the dual aspect concept where every transaction has two equal parts, the accounting period concept which determines profit/loss over a set time period, and the going concern concept which assumes a business will continue indefinitely. The document also covers accounting conventions like disclosure, conservatism and consistency.
This powerpoint presentation is created by Gyanbikash.com for the students of class nine to ten from their accounting NCTB textbook for multimedia class.
This document provides an overview of key concepts in accounting theory and principles, including:
1) It defines common accounting terms like assets, liabilities, capital, revenues, and expenses. It also distinguishes between current and non-current assets/liabilities.
2) It outlines important accounting principles like business entity, dual aspect, accounting period, going concern, cost, and matching.
3) It discusses the objectives of accounting, accounting records like vouchers, and concepts like materiality, full disclosure, consistency and objectivity in financial reporting.
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.
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 accounting concepts. It defines bookkeeping as recording business transactions and accounting as identifying, measuring and communicating economic information. It discusses the objectives, methods, types of accounts and branches of accounting. Single entry records only cash transactions while double entry records all transactions with equal debits and credits. Accounts are categorized as personal, real or nominal. The three branches of accounting are financial, cost and management accounting. In summary, the document serves as an introductory guide to foundational accounting terminology and principles.
Accounting is defined as the art of Recording, Classifying and Summarizing transactions in monetary terms (in Money terms) for preparation of Financial Statements
Book- keeping includes recording of journal, posting in ledgers and balancing of accounts. All the records before the preparation of trail balance is the whole subject matter of book- keeping.
Accounting, is an information system is the process of identifying, measuring and communicating the economic information of an organization to its users who need the information for decision making.
This document provides an overview of key accounting concepts and principles. It defines accounting as the process of identifying, measuring and communicating financial information. The main functions of accounting are to keep systematic financial records, protect business assets, and communicate results to interested parties. Key concepts discussed include the dual aspect concept where every transaction has two equal parts, the accounting period concept which determines profit/loss over a set time period, and the going concern concept which assumes a business will continue indefinitely. The document also covers accounting conventions like disclosure, conservatism and consistency.
This powerpoint presentation is created by Gyanbikash.com for the students of class nine to ten from their accounting NCTB textbook for multimedia class.
This document provides an introduction to accounting. It defines accounting as recording, classifying, and summarizing financial transactions and events in terms of money. Accounting involves recording transactions, classifying data into appropriate categories, and summarizing data to be useful for internal and external users. It discusses the different types of accounting activities and various accounting terms such as assets, liabilities, revenues, expenses, and financial statements.
Financial accounting Meaning . This is useful for, BCOM,MCOM,CA,CS,CMA STUDENTSBibek Prajapati
Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet.
This is useful for, BCOM,MCOM,CA,CS,CMA STUDENTS
This document provides an introduction to accounting, including definitions and key concepts. It discusses bookkeeping and accounting, explaining that bookkeeping is the process of recording financial transactions, while accounting additionally involves classifying, summarizing, analyzing and interpreting the recorded data.
The document outlines the main attributes and steps of accounting as recording transactions, classifying data, summarizing, and analysis/interpretation. It also discusses the objectives of accounting such as keeping systematic records, ascertaining results and financial position, and facilitating decision making.
Finally, the document covers the importance and functions of accounting. It explains that accounting provides valuable financial information to various stakeholders like owners, managers, creditors, and governments to understand performance and assess financial health
1) Accounting is the process of recording business transactions systematically to determine profit or loss over a period of time and report on the financial position of the business.
2) Key steps include identifying transactions, measuring them in monetary terms, recording them in journals and ledgers, and summarizing the information to prepare financial statements like income statements and balance sheets.
3) The double entry system is used where every transaction has two equal entries to maintain the balance between debits and credits.
This document discusses accounting concepts, conventions, standards, and methods. It provides definitions and explanations of key terms:
- Generally Accepted Accounting Principles (GAAP) are the rules and concepts accepted by the accounting community for sound accounting practice.
- Accounting concepts are basic assumptions that form the foundation of the accounting structure, such as the business entity, money measurement, going concern, and accrual concepts.
- Accounting conventions are common practices followed in recording and presenting accounting information, like consistency, full disclosure, and conservatism.
- Accounting standards are written policies issued by expert accounting bodies to ensure uniformity in accounting practices and financial reporting.
- The double entry system
Introduction to Accounting
By. Prof Navneet Saxena
IBS Gurgaon
Objective:
At the end of this session you should be able to understand
Distinction among Financial Accounting, Cost Accounting and Management Accounting
Evolution of Accounting
Basic Concepts of Financial Accounting
Conventions of Accounting
Stages of Preparing Accounting Statements
From Input to Output
Users of Financial Statements
Advantages of Accounting
Generally Accepted Accounting Principles
This document defines various accounting terms and types of accounting. It describes transactions, assets, liabilities, equity, revenues, expenses, and other basic accounting concepts. It then explains the main types of accounting as financial accounting, management accounting, governmental accounting, tax accounting, forensic accounting, project accounting, and social accounting. For each type, it provides a brief description of what it entails and how it differs from other accounting types.
Accounting conventions ppt @ mba financeBabasab Patil
This document discusses accounting conventions and policies. It covers the sources of accounting concepts like IAS 1 and the IASB framework. Key accounting conventions are described, including fair presentation, going concern, accruals, and consistency. IAS1 requires these conventions be followed. The nature and purpose of accounting conventions is to influence how financial statement line items are recorded, valued, and presented.
This document provides an overview of accounting and economic decisions (Unit I). It defines accounting and discusses its uses, including providing information for business and economic decision making. It outlines the key financial statements and describes the various users of accounting information, including investors, lenders, managers, employees, government, and the public. It also distinguishes between financial and management accounting and discusses the key principles of accounting, including the business entity, money measurement, cost, and matching concepts.
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.
Basics of Accounting. Principles and concepts of Accounting
what is Double Entry System of Accounting?what Financial Statements?
Accounting is a process of identifying, recording, summarising and reporting economic information
to decision makers in the form of financial statements.
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.
The document provides an overview of accounting, including its objectives and uses. It discusses that accounting involves recording, classifying, and summarizing financial transactions. It notes that accounting is required wherever money is involved to account for economic resources. The document also outlines the basic accounting equation of Assets = Liabilities + Owner's Equity and discusses key accounting concepts such as revenues, expenses, assets, liabilities, the double-entry system. It explains that accounting provides important financial information to various stakeholders like owners, management, creditors, investors, and governments.
Accounting is the process of recording, classifying, summarizing, interpreting and communicating financial information about an entity. It has both external and internal users. External users include investors, creditors, tax authorities and customers who use financial statements. Internal users include management and owners who use managerial accounting for decision making. To ensure consistency, accounting follows Generally Accepted Accounting Principles (GAAP), which are a common set of standards, procedures and constraints. GAAP aims to make financial information useful, comprehensive, consistent and comparable for decision makers.
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.
Accounting and Auditing(UGC NET Commerce)UmakantAnnand
This document provides an overview of accounting and auditing classes offered by KDCommerceClasses in 2019. It discusses key accounting concepts like the definition of accounting, characteristics and attributes of accounting, objectives of accounting, functions of accounting, concepts of partnership, and requirements for accounting for partnership firms. The document defines accounting and outlines its characteristics as recording, classifying, and summarizing financial transactions. It also discusses accounting principles, concepts, conventions, and functions including historical and managerial functions. Finally, it covers the concept of partnership, requirements for accounting for partnership firms including having a partnership deed, and rules applicable in the absence of a partnership deed.
This course discusses basic concepts of accounting.
Course Objectives: (i) Help the participants to become intelligent users of accounting information (a) Understand the basic accounting and financial terminology. (b) Understand how events affect firm value (c) Understand how financial transactions are recorded. (d) Make the participants’ comfortable looking through financial statements (ii) Develop the ability in participants’ to use financial statements to assess a company’s performance.
Course Fee: Free of Cost
What you'll learn
• Understand need and importance of Accounting
• Understand Book Keeping, Objectives and Advantages
• Understand Accounting Process, Accounting Cycle,
• Understand Users of Accounting Information
• Understand Branches of Accounting
• Understand Basic Accounting Terms
• Understand Accounting Assumptions, Concepts and Principles
• Understand Rules of Accounting
• Understand Journal, Ledger, Trial Balance and Final Accounts Preparation
In detail view of Everyday session topic covers:
This is a comprehensive course, covering each and every topic in detail. In this course, you will learn Fundamentals of Accounting, step by step covering the following:
Introduction of accounting_2016_09_24_05_08_16_467Bandri Nikhil
The document provides an introduction to accounting, including its meaning, definitions, objectives, and essential aspects. Accounting is defined as the process of recording, classifying, summarizing, and communicating financial information. The key objectives are to systematically record transactions, determine financial results, assess financial position, and provide information to users. Essential aspects include recording, classifying, summarizing, analyzing, interpreting, and communicating financial data. The document also discusses the accounting cycle and basic accounting concepts such as assets, liabilities, capital, income, and expenses.
Introduction to Accounting by Dr. Suresh VaddeSuresh Vadde
This document provides an introduction to accounting concepts. It defines accounting and discusses its importance for controlling financial performance and position. The key users of accounting information are identified as internal stakeholders like management and external stakeholders like investors. Financial accounting provides external reporting through financial statements, while managerial accounting provides internal reporting to support decision making. Accounting concepts like business entity, money measurement, accruals and conventions like consistency are also outlined. International standards like IAS and IFRS aim to harmonize accounting practices globally.
Introduction to Accounting by Dr. Suresh VaddeSuresh Vadde
This document provides an introduction to accounting concepts. It defines accounting as the process of identifying, measuring, and communicating financial information. It discusses the importance of accounting in providing reliable information to both internal and external users. Key accounting concepts covered include the accounting equation, revenue/expense recognition principles, and the going concern assumption. Financial accounting and management accounting are also introduced.
Accounting involves systematically recording all financial transactions of a business entity. The key objectives of accounting are to maintain records of transactions, ascertain profits and losses, determine the financial position of the entity, provide information to users of financial statements, and assist management. Financial statements like the income statement and balance sheet are prepared using accounting principles such as separate entity, money measurement, and accrual basis. Qualitative characteristics of accounting information include reliability, relevance, understandability, and comparability.
This document provides an introduction to accounting. It defines accounting as recording, classifying, and summarizing financial transactions and events in terms of money. Accounting involves recording transactions, classifying data into appropriate categories, and summarizing data to be useful for internal and external users. It discusses the different types of accounting activities and various accounting terms such as assets, liabilities, revenues, expenses, and financial statements.
Financial accounting Meaning . This is useful for, BCOM,MCOM,CA,CS,CMA STUDENTSBibek Prajapati
Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet.
This is useful for, BCOM,MCOM,CA,CS,CMA STUDENTS
This document provides an introduction to accounting, including definitions and key concepts. It discusses bookkeeping and accounting, explaining that bookkeeping is the process of recording financial transactions, while accounting additionally involves classifying, summarizing, analyzing and interpreting the recorded data.
The document outlines the main attributes and steps of accounting as recording transactions, classifying data, summarizing, and analysis/interpretation. It also discusses the objectives of accounting such as keeping systematic records, ascertaining results and financial position, and facilitating decision making.
Finally, the document covers the importance and functions of accounting. It explains that accounting provides valuable financial information to various stakeholders like owners, managers, creditors, and governments to understand performance and assess financial health
1) Accounting is the process of recording business transactions systematically to determine profit or loss over a period of time and report on the financial position of the business.
2) Key steps include identifying transactions, measuring them in monetary terms, recording them in journals and ledgers, and summarizing the information to prepare financial statements like income statements and balance sheets.
3) The double entry system is used where every transaction has two equal entries to maintain the balance between debits and credits.
This document discusses accounting concepts, conventions, standards, and methods. It provides definitions and explanations of key terms:
- Generally Accepted Accounting Principles (GAAP) are the rules and concepts accepted by the accounting community for sound accounting practice.
- Accounting concepts are basic assumptions that form the foundation of the accounting structure, such as the business entity, money measurement, going concern, and accrual concepts.
- Accounting conventions are common practices followed in recording and presenting accounting information, like consistency, full disclosure, and conservatism.
- Accounting standards are written policies issued by expert accounting bodies to ensure uniformity in accounting practices and financial reporting.
- The double entry system
Introduction to Accounting
By. Prof Navneet Saxena
IBS Gurgaon
Objective:
At the end of this session you should be able to understand
Distinction among Financial Accounting, Cost Accounting and Management Accounting
Evolution of Accounting
Basic Concepts of Financial Accounting
Conventions of Accounting
Stages of Preparing Accounting Statements
From Input to Output
Users of Financial Statements
Advantages of Accounting
Generally Accepted Accounting Principles
This document defines various accounting terms and types of accounting. It describes transactions, assets, liabilities, equity, revenues, expenses, and other basic accounting concepts. It then explains the main types of accounting as financial accounting, management accounting, governmental accounting, tax accounting, forensic accounting, project accounting, and social accounting. For each type, it provides a brief description of what it entails and how it differs from other accounting types.
Accounting conventions ppt @ mba financeBabasab Patil
This document discusses accounting conventions and policies. It covers the sources of accounting concepts like IAS 1 and the IASB framework. Key accounting conventions are described, including fair presentation, going concern, accruals, and consistency. IAS1 requires these conventions be followed. The nature and purpose of accounting conventions is to influence how financial statement line items are recorded, valued, and presented.
This document provides an overview of accounting and economic decisions (Unit I). It defines accounting and discusses its uses, including providing information for business and economic decision making. It outlines the key financial statements and describes the various users of accounting information, including investors, lenders, managers, employees, government, and the public. It also distinguishes between financial and management accounting and discusses the key principles of accounting, including the business entity, money measurement, cost, and matching concepts.
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.
Basics of Accounting. Principles and concepts of Accounting
what is Double Entry System of Accounting?what Financial Statements?
Accounting is a process of identifying, recording, summarising and reporting economic information
to decision makers in the form of financial statements.
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.
The document provides an overview of accounting, including its objectives and uses. It discusses that accounting involves recording, classifying, and summarizing financial transactions. It notes that accounting is required wherever money is involved to account for economic resources. The document also outlines the basic accounting equation of Assets = Liabilities + Owner's Equity and discusses key accounting concepts such as revenues, expenses, assets, liabilities, the double-entry system. It explains that accounting provides important financial information to various stakeholders like owners, management, creditors, investors, and governments.
Accounting is the process of recording, classifying, summarizing, interpreting and communicating financial information about an entity. It has both external and internal users. External users include investors, creditors, tax authorities and customers who use financial statements. Internal users include management and owners who use managerial accounting for decision making. To ensure consistency, accounting follows Generally Accepted Accounting Principles (GAAP), which are a common set of standards, procedures and constraints. GAAP aims to make financial information useful, comprehensive, consistent and comparable for decision makers.
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.
Accounting and Auditing(UGC NET Commerce)UmakantAnnand
This document provides an overview of accounting and auditing classes offered by KDCommerceClasses in 2019. It discusses key accounting concepts like the definition of accounting, characteristics and attributes of accounting, objectives of accounting, functions of accounting, concepts of partnership, and requirements for accounting for partnership firms. The document defines accounting and outlines its characteristics as recording, classifying, and summarizing financial transactions. It also discusses accounting principles, concepts, conventions, and functions including historical and managerial functions. Finally, it covers the concept of partnership, requirements for accounting for partnership firms including having a partnership deed, and rules applicable in the absence of a partnership deed.
This course discusses basic concepts of accounting.
Course Objectives: (i) Help the participants to become intelligent users of accounting information (a) Understand the basic accounting and financial terminology. (b) Understand how events affect firm value (c) Understand how financial transactions are recorded. (d) Make the participants’ comfortable looking through financial statements (ii) Develop the ability in participants’ to use financial statements to assess a company’s performance.
Course Fee: Free of Cost
What you'll learn
• Understand need and importance of Accounting
• Understand Book Keeping, Objectives and Advantages
• Understand Accounting Process, Accounting Cycle,
• Understand Users of Accounting Information
• Understand Branches of Accounting
• Understand Basic Accounting Terms
• Understand Accounting Assumptions, Concepts and Principles
• Understand Rules of Accounting
• Understand Journal, Ledger, Trial Balance and Final Accounts Preparation
In detail view of Everyday session topic covers:
This is a comprehensive course, covering each and every topic in detail. In this course, you will learn Fundamentals of Accounting, step by step covering the following:
Introduction of accounting_2016_09_24_05_08_16_467Bandri Nikhil
The document provides an introduction to accounting, including its meaning, definitions, objectives, and essential aspects. Accounting is defined as the process of recording, classifying, summarizing, and communicating financial information. The key objectives are to systematically record transactions, determine financial results, assess financial position, and provide information to users. Essential aspects include recording, classifying, summarizing, analyzing, interpreting, and communicating financial data. The document also discusses the accounting cycle and basic accounting concepts such as assets, liabilities, capital, income, and expenses.
Introduction to Accounting by Dr. Suresh VaddeSuresh Vadde
This document provides an introduction to accounting concepts. It defines accounting and discusses its importance for controlling financial performance and position. The key users of accounting information are identified as internal stakeholders like management and external stakeholders like investors. Financial accounting provides external reporting through financial statements, while managerial accounting provides internal reporting to support decision making. Accounting concepts like business entity, money measurement, accruals and conventions like consistency are also outlined. International standards like IAS and IFRS aim to harmonize accounting practices globally.
Introduction to Accounting by Dr. Suresh VaddeSuresh Vadde
This document provides an introduction to accounting concepts. It defines accounting as the process of identifying, measuring, and communicating financial information. It discusses the importance of accounting in providing reliable information to both internal and external users. Key accounting concepts covered include the accounting equation, revenue/expense recognition principles, and the going concern assumption. Financial accounting and management accounting are also introduced.
Accounting involves systematically recording all financial transactions of a business entity. The key objectives of accounting are to maintain records of transactions, ascertain profits and losses, determine the financial position of the entity, provide information to users of financial statements, and assist management. Financial statements like the income statement and balance sheet are prepared using accounting principles such as separate entity, money measurement, and accrual basis. Qualitative characteristics of accounting information include reliability, relevance, understandability, and comparability.
This document provides an overview of key accounting concepts:
1. Accounting is used to collect, classify, and manipulate financial data for organizations and individuals. Generally accepted accounting principles (GAAP) are the standard framework for financial accounting.
2. Accounting principles are the rules for reporting financial data, commonly following GAAP. Constraints, assumptions, and principles include conservatism, monetary unit, and going concern.
3. Users of accounting information include internal parties like management and owners, as well as external parties like creditors, investors, and government for purposes like decision making, taxation, and research.
This document provides an overview of the conceptual framework of accounting. It discusses what accounting is, its purpose of providing financial information to internal and external users, and the basic accounting concepts and conventions used to guide accounting practice. These include the business entity assumption, going concern principle, money measurement, historical cost, accounting period, objectivity, consistency, conservatism, accrual concept, and matching principle. It also describes the three main financial statements - the income statement, balance sheet, and statement of cash flows.
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 accounting basics for beginners. It discusses the importance of understanding financial accounting for managers and defines key terms. The three main financial statements are identified as the balance sheet, income statement, and statement of cash flows. Important users of financial statements are shareholders, lenders, customers, suppliers, and regulators. Four key assumptions of financial accounting are also outlined: reporting entity, going concern, periodicity, and consistency.
Accounting Basics For Beginners ACCOUNTING BASICS FOR BEGINNERS Module 1 Nat...Katie Robinson
This document provides an introduction to accounting basics for beginners. It discusses the importance of understanding financial accounting for managers and defines key terms. The three main financial statements are identified as the balance sheet, income statement, and statement of cash flows. Important users of financial statements are listed as shareholders, lenders, customers, suppliers, and regulators. Four basic assumptions of financial accounting are described: reporting entity, going concern, periodicity, and consistency. Key terms such as assets, liabilities, revenues, expenses, capital expenditures and revenue expenditures are also defined.
Basic terminology of Accounts-Unit-Ist.pptxManishaDabhade
Financial accounting involves systematically recording, summarizing, and reporting a company's financial transactions and activities to provide accurate information to external stakeholders for decision making. It produces key financial statements including the income statement, balance sheet, cash flow statement, and statement of changes in equity. Financial accounting adheres to accounting principles and follows double-entry bookkeeping to provide a comprehensive view of a company's financial performance and position in accordance with regulatory standards.
Introduction, Accounting as an Information System, Branches of Accounting, Meaning of Financial Accounting, Users of Accounting Information- GAAPS- Basic Concepts and Conventions- Accounting Standards issued by ICAI and IFRS issued by IASB- Manual Vs Computerized Accounting.
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.
LBS Introduction to Financial Accounting (1).pptxparthwalia8
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.
Here are the journal entries for the above transactions:
Date Particulars L.F. Debit (Rs) Credit (Rs)
1/1/2012 Cash A/c 5,000
To Capital A/c
3/1/2012 Bank A/c 1 1,000
To Cash A/c
4/1/2012 Purchase A/c 2 1,000
To Cash A/c
5/1/2012 Furniture A/c 3 500
To Cash A/c
6/1/2012 Cash A/c 600
To Sales A/c
Accounting provides essential financial information for making business and economic decisions. It communicates information to various users like investors, lenders, managers, and government authorities. Management accounting specifically prepares financial reports and other analyses for managers to aid in planning, controlling operations, and decision making. It involves selective reporting of relevant financial data, analysis of future projections, and examination of cause-and-effect relationships to help managers promote efficiency and implement plans and budgets.
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.
The document provides an overview of accounting as an information system. It discusses how accounting records, summarizes, reports and interprets financial data for various users to make economic decisions. It also describes the key elements of accounting including the accounting equation, different types of business organizations, financial and management accounting, financial statements and generally accepted accounting principles.
1. Accounting involves recording, classifying, and summarizing financial transactions and events to provide information to decision makers.
2. Bookkeeping is the process of recording business transactions, while accounting builds on this by interpreting the information, compiling reports, and analyzing the financial position and performance of a business.
3. Financial accounting provides information to external users like investors and regulators, while management accounting informs internal decision making. Both require adherence to generally accepted accounting principles (GAAP) for consistency and accuracy.
Socrates developed the Socratic method of questioning beliefs and exposing contradictions. This method involves asking probing questions to guide students to the underlying truth. It is based on using reasoning and logic to critically examine one's own beliefs. On one occasion, Socrates explained his "triple filter test" to someone who wanted to share gossip about a friend. The triple filter test requires that what is said must pass three filters: it must be truthful, good, and useful. If it fails any of these three tests, it should not be said. This illustrates Socrates' high standards for knowledge and the importance he placed on rational thinking and truth.
This summary provides context and key details from the document in 3 sentences:
The document is a synopsis and first chapter of the novel "The Flesh of the Orchid" by James Hadley Chase. It introduces Carol Blandish, a beautiful young woman who is heir to $6 million but imprisoned in a mental institution. The chapter describes two employees at the institution, Joe and a nurse, and their interaction is interrupted when the nurse finds Carol missing from her room and is then attacked by an unseen assailant.
An appreciation of the ancient traders and Indigenous Bankers commercial merchants of Bengal and India before British colonization. The Marwadi Jain Family from Nagaur came to Murshidabad and became the Banker to Alvardi Khan of Bengal Nawabs. Fateh Chand Seth conspires against Siraj ud-dhaula of Bengal and supports the British army to dethrone the nawab of Bengal for his business prospects.
This document compares the private spaceflight companies Blue Origin, Virgin Galactic, and SpaceX. It discusses SpaceX's Falcon Heavy rocket, which is described as the world's most powerful rocket. The document provides a comparative analysis of the three companies and their different approaches to private space travel.
Informal communication refers to communication that occurs outside of formal channels. It spreads rapidly throughout an organization in an unstructured way. Examples include workers chatting in break rooms about supervisors or rumors of transfers. While informal communication can distort information and spread rumors, it also allows employees to exchange views and can help managers understand reactions. An effective manager will utilize positive aspects of informal communication networks while minimizing negatives like inaccurate information.
The document discusses measures to improve communication effectiveness in organizations. It identifies barriers to effective communication and recommends clarifying ideas before communicating, communicating according to the receiver's needs, consulting others before communicating, being aware of language, tone and content, conveying helpful information to listeners, ensuring feedback, communicating for present and future goals, following up on communications, and being a good listener. Adopting these measures can help organizations overcome barriers and enhance communication.
formal, informal communication, barriers to communication, effective communication, grapevine, rumors, gossips, personal, organizational, and semantic barriers of communication
Formal communication within an organization flows through official channels as defined in the organizational chart. It can be vertical between superiors and subordinates, horizontal between peers, and can be oral or written. Vertical communication is upward from subordinates to superiors, like submitting progress reports, or downward from superiors to subordinates, like passing guidelines. Horizontal communication is between different divisions, like discussing product delivery schedules. The patterns of formal communication flow are represented by different networks, such as single chain, wheel, circular, free flow, and inverted V.
Effective Communication in the organization, Barriers to Communication, personal barriers, cultural barriers, semantic barriers, organizational barriers
Types of Partners, Partner by Holding out, Mutual Agency, Contract of Agency, 3 Musketeers by Dumas, One for all, all for one, Merits of the Partnership in comparing with Sole Proprietory
Formal & Informal Communication, Effective Communication, Process of Communication, Barriers to Communication, Noise in the Communication, How to overcome barriers of Communication,
Types of Partners, Partnership Merits and Demerits, Partner by Holding out, Parter by estoppel, Registration of Partnership, The difference between a sole proprietorship and Partnership, features of Partnership act 1932, Mutual consent of Partners, Mutual agency
Hindu Undivided Family Business, Kartha, Copercenres, unlimited liability to Karta, Business ownership, the unique feature of Indian business professional communities
Best Indian Business Leaders, 6 best Leadership qualities, Sacrifice, Courage, leading, influencing, encouraging, Employer leadership qualities, Mrs. Meera H Sanyal, Ankita Bose is the co-founder and CEO of Zilingo, Microsoft without Bill Gates, Reliance Industries without Ambani's, Infosys without Narayana Murthy, Tata without J.R.D. Tata or Wipro without Azim Premji.
1. The document discusses various forms of business organizations and focuses on sole proprietorship.
2. As a sole proprietorship, one individual owns, manages, and controls the business alone and keeps all profits while bearing full responsibility for any losses or debts.
3. Key advantages of a sole proprietorship include easy formation with few legal requirements, quick decision making, and the owner directly receiving all profits. However, the owner also has unlimited liability for business debts and the business lacks continuity upon the owner's departure.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
South Dakota State University degree offer diploma Transcriptynfqplhm
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
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2. Financial Accounting
Accounting is commonly referred to as the “language of
the business” as it is effectively employed to
communicate the financial performance of business to
various interested parties or stakeholders. It is
concerned with the measurement and communicating
financial data.
Meaning: Accounting is an information system, is the
process of identifying, measuring and communicating
the economic information of an organisation to its
users who need the information for decision making.
3. Definition of Accounting:
Accounting has been defined as “the art of recording,
classifying, and summarizing in a significant manner and
in terms of money, transactions and events which are, in
part at least, of financial character, and interpreting the
results thereof”.(AICPA)
According to American Accounting Association
“accounting is the process of identifying, measuring and
communicating information to permit judgement and
decisions by the users of accounts”.
4. Objectives of Accounting
The basic objectives of accounting are to provide financial information to the
managers, owners and the stakeholders i.e. the parties who are interested in an
organisation. To attain such objectives various financial statements are prepared.
The users of financial statements may be broadly classified in the following
groups –
(a) The investor: This group includes both existing and potential owners of
shares in companies. They are broadly interested in the performance of the entity
and the dividend declared by such entity. They also measure the social and
economic policies of the company to decide whether they will remain associated
with such entity.
(b) The lender: This group includes both secured and unsecured lenders. Such
creditors may be financing long term or short term loans. The financial
statements are analysed to determine an organisation’s ability as to
(i) Pay the interest on due date,
(ii) The growth and stability of the organisation,
(iii) Capability of repaying the loan as agreed upon, and.
(iv) The book value of assets offered as security by the organisation.
5. (c) The customers and suppliers – While customers are interested in the
ability of the organisation to provide goods/services, the suppliers are
interested in the capability of the organisation to pay their dues as and when
due.
(d) The government – This group includes various taxation authorities viz.
Income tax, Excise department, Sales tax department etc. and also various
other government authorities for statistical purposes and for framing various
economic and planning policies.
(e) The employee group – The employees are concerned with the capability
of an organisation to pay their present emoluments and future retirement
benefits. Moreover, financial statements help them to asses job security.
(f) The analyst – Advisors to the management, investors, employees or
public at large collect various data from financial statements to advise their
clients.
(g) The Management – Financial statements provide required information to
different levels of management to assist them in making decisions at each
appropriate level.
6. Users of Accounting Information :
Accounting information helps users to make better financial
decisions. Users of financial information may be both internal and
external to the organization.
Internal users (Primary Users) of accounting information include
the following:
Management: for analysing the organization's performance and
position and taking appropriate measures to improve the company
results.
Employees: for assessing company's profitability and its
consequence on their future remuneration and job security.
Owners: for analysing the viability and profitability of their
investment and determining any future course of action.
Accounting information is presented to internal users usually in the
form of management accounts, budgets, forecasts and financial
statements.
7. External users (Secondary Users) of accounting information include the following:
Creditors, banks, financial institutions, debenture holders: for evaluating the risk
of lending money to a particular business organisation on the basis of accounting
information.
Government, Tax Authorities: for determining the credibility of the tax returns
filed on behalf of the company.
Investors: for analysing the feasibility of investing in the company. Investors want
to make sure they can earn a reasonable return on their investment before they
commit any financial resources to the company.
Customers: for assessing the financial position of its suppliers which is necessary
for them to maintain a stable source of supply in the long term.
Workers: for negotiating the payment of bonus and wages is correct or not on the
size of profit earned.
Researchers: for studying the efficiency of an organisation and find reasons for
profit or losses.
External users are communicated accounting information usually in the form of
financial statements. The purpose of financial statements is to cater for the needs of
such diverse users of accounting information in order to assist them in making sound
financial decisions.
8. Accounting Cycle:
•
-- Identify business events, analyse these transactions, and record
them as journal entries
•
-- Post journal entries to applicable T-accounts or ledger accounts
•
-- Prepare an unadjusted trial balance from the general ledger
9. • -- Analyse the trial balance and make end of period adjusting
entries
• -- Post adjusting journal entries and prepare the adjusted trial
balance
• -- Use the adjusted trial balance to prepare financial statements
• -- Close all temporary income statement accounts with closing
entries
• -- Prepare the post-closing trial balance for the next accounting
period.
10. GAAP (Generally Accepted Accounting Principles):
Accounting principles are the guidelines which provide a procedure to be
followed in the process of accounting. But it is very difficult to have principles
which are universally acceptable.so we have a set of principles which are general
accepted by the makers of financial statements. These principles are called as
“Generally Accepted Accounting Principles” (GAAP).
Accounting principles can be broadly divided into two categories
A. Accounting Concepts B. Accounting Conventions
1. Business Entity Concept 1. Full disclosure
2. Money Measurement Concept 2. Materiality
3. Cost Concept 3. Consistency
4. Going Concern Concept 4. Conservation
5. Dual-aspect Concept
6. Realisation Concept
7. Matching Concept
8. Accounting Period Concept
9. Objective Evident Concept
11. 1. Business Entity Concept: business is treated separated from the
proprietor. All the transactions are recorded in the books of business and
not in the books of the proprietor. The proprietor is also treated as a
creditor of business. When he contributes capital, he is treated as person
who has invested his amount in the business.
2. Money Measurement Concept: only those transactions are recorded in
accounting which can be expressed in terms of money. Therefore, in the
process of accounting only events which can be expressed and measured
in terms of money are recorded.
3. Cost Concept: according to this, an asset is recorded its cost in the
books of account i.e., the price which is paid at the time of acquiring it.
The market value or any other value of an asset is not considered. It is
therefore called as “historical cost concept”.
4. Going Concern Concept: it is assume that a business organisation will
continue to operate for a considerably long period of time. This
assumption is very important because sometimes money is spent by the
business for a future benefit.
12. 5. Dual-aspect Concept: dual mean two. It implies that every transaction will
have two aspects. These aspects are giving and receiving.
6. Realisation Concept: Every business unit spends money to purchase goods or
to manufacture goods for sale. Profit cannot be made only by manufacture sales of
goods either for cash or on credit is essential to make earning. Without realisation
of sales proceeds, there can be no profit. Unearned/unrealised revenue should not
be taken into account.
7. Matching Concept: this concept tries to match the revenue and expenditure of
an organisation pertaining to a particular period of time i.e., is one year. This will
help the users of accounting to understand the functioning of the business in a
clear manner.
8. Accounting Period Concept: business organisations are believed to have
continued existence. But the performance of the organisation should be assessed
regularly over a period of time. Normally one year is taken to assess the financial
performance of the business.
9. Objective Evident Concept: This concept relates with the verification of
accounting record with the outside evidence. Outside evidence means study of
those documents and vouchers on the basis of which accounting record has been
made.
13. Accounting conventions:-
Conventions of full disclosure: According to this convention, all
accounting statements should be honestly prepared to that and full
disclosure of all significant information to be made.
Convention of materiality: According to this convention,
accounting should consist of all the material facts. Material facts
are one those which can have an impact on the financial statements
of the organisations. Immaterial and irrelevant items should be
excluded or merged with other items.
Convention of consistency: Accounting rules, practices and
conventions should be continuously observed and applied i.e. these
should not change from one year to another.
Convention of conservation: According to this convention all
incomes or profits if anticipated should not be taken into account.
But any anticipated losses should be considered while preparing the
accounts of a business.
14. Double entry book keeping: -
This system of accounting was invented by ‘Lucas paciolio’
of Italy in 1494 in Venice but developed in England. The
object of book keeping is to keep a complete record of all
transactions that take place in business. The double entry
book keeping refers to a system of accounting in which
every transaction effects at least two accounts. In double
entry book-keeping, the amount of every transaction is
written twice, once as debit and again as credit, leading to
the conclusion that that in mathematical terms the sum of all
accounts will be zero and in terms of accounting equation,
the sum total of all assets must be equal to sum total of all
liabilities and the owners equity. This equity holds true up
to the last stage of accounting process, ending with the
preparation of the balance sheet.
15. Every business transaction having two aspects, one will be treated as
debit and other will be treated as credit. This debit and credit will be
decided on the basis of nature of aspect. Each aspect comes under
personal, real or nominal accounts.
Every business organisation deals with people, assets, pays expenses and
receives incomes. Therefore, it is necessary to keep the following
accounts in order to keep a complete record of all the transactions.
1.Personal accounts (PA)
2. Real accounts (RA)
3. Nominal accounts(NA)
Transaction
Aspect 1
Dr
Aspect 2
Cr
16. Characteristics of Double entry system:
1.Every business transaction affects two or more accounts
2.Every account is divided in two parts
3.Division of amount column as debit and credit
4.Dual aspect of every transaction
5.Based upon accounting concepts and conventions
6.Preparing trial balance
7.Preparation final accounts
17. Advantages of double entry system:
1.Scientific system: It is scientific system compared to single
entry system.
2.Full information
3. Assessment of profit and loss
4. Knowledge of creditors
5.Arithmetical accuracy
6.Assessment of financial position
7.Comparison of results
8.Maintenance according to incoming tax rules
9.Detection of frauds
18. Limitations:
1.Errors of omission: in case the entire transaction is not recorded in the
books of accounting.
2.Errors of principle: Debiting Ram’s a/c instead of Rao’s a/c
3.Compensating errors: If rahim’s a/c is by mistake debited with Rs. 15/-
lesser and mohan’s a/c is also by mistake credited with Rs 15/- lesser.
Single entry book keeping:
It is a crude and unscientific method of maintaining accounts. Under
this system all the transactions are not recorded. Similarly all the account
books are not maintained. Sometimes two aspects of a transaction are
recorded and are not recorded completely. Under this system it is
incomplete and unsystematic. So, it is not reliable. It is not possible to
prepare proper trial balance and it is difficult to prepare the correct P&L
a/c to know the profit or loss.
19. Definition
According to Kohler, “Single entry system is a
system of bookkeeping in which as the rules, only records of
cash and personal accounts are maintained. It is always an
incomplete double entry varying with circumstances.”
Explanation
•Single entry system is a system of art of bookkeeping. All
business transactions are recorded in the books of accounts.
• In single entry system, only cash and personal accounts are
maintained and real and nominal accounts are not
maintained.
This system is a n incomplete double entry system which is
variable in nature.
20. Feathers of single entry system
1) It is applicable for sole proprietor and partnership
Single entry system is unscientific system and incomplete double entry system.
It cannot be applied to corporate sectors. It is applicable to small level business
which has small level of transactions comparing to corporate sectors.
2) Cash and Personal Accounts
Under single entry system, all transactions are recorded and grouped under two
accounts only. They are named as personal accounts and cash accounts. Real
account and nominal accounts are not existed in this system but they are existed
in double entry system. Only the cash transactions and the credit transactions
which are dealing with persons are recorded in this system.
3) Transactions are not recorded completely
Under single entry system, transactions are recorded in diaries, similar notes as
single line. As they are keeping these style of bookkeeping, some transactions
can be omitted and missed because insufficient method of recording.
21. 4) No Uniformity
As like double entry system, Single entry system records all
transactions in the books of accounts but it does not follow
uniformity in recording and classifying the transactions. No proper
Journal or subsidiary books are kept and no ledger accounts are
maintained separately for every class of accounts.
5) Dependent on source document
The transactions recorded in the books of accounts in single entry
system are not accurate and reliable. No proper books of accounts
are maintained. To check the reliability of transactions recorded in
the books of accounts, source documents of such transactions are to
be verified. The recorded data in books of accounts cannot be relied
for accuracy of transactions.
22. Limitations of Single Entry System
1) Incomplete Records
Transactions are not recorded in dual aspect concept. There is no
equal amount of credit to every debit. Debit and Credit are not
existed in the system. The recording of transactions in this system
is incomplete, no equal debit to equal credit.
2) Financial position is not ascertained
Statement of Affairs is prepared to find out the closing balance
of capital in the final accounts of single entry system. The
balancing figure obtained by comparing the all liabilities except
capital with all assets of a business is treated as closing capital of
the business. Financial position is not revealed accurately in this
statement of affairs. Under double entry system, Balance sheet is
prepared in the final accounts. Balance sheet tallies all assets with
all liabilities exactly. The exact financial position can be
ascertained.
23. 3) Performance of business is not found
Under single entry system, statement of profit or loss is prepared to know
the profit or loss of a business. In statement of profit, the profits are
derived as a balancing figure resulted by subtracting the opening capital
from the closing capital and the drawings are added with and additional
capitals are subtracted from closing capital. The profit is estimation but it
is not exact result of the business. Under double entry system, Trading
and profit and loss account is prepared. All accrued incomes are matched
with the accrued expenses and the result is treated as profit or loss of the
business. The profit is ascertained more exactly.
4) No accuracy of accounts
Trial Balance cannot be prepared in single entry system as it is not
following dual aspect concept. No debit and credit is treated in this
accounts. So all debit accounts cannot be matched with all credit accounts
while preparing Trial Balance. The accuracy of accounts cannot be found
because trial balance is not prepared.
24. 5) No comparison between two accounting periods
Transactions recorded in single entry system is inaccurate so it cannot be
compared the transactions recorded between two accounting periods. All
transactions are not recorded genuinely so it is not acceptable to compare the
transactions between two accounting periods.
6) Unacceptable by tax authorities
One cannot file his return of accounts by following single entry system to the
tax authorities. It is a unscientific method of bookkeeping so it is not
acceptable by tax authorizes.
7) Insufficient to detect frauds
If any frauds are committed in the books of accounts, it cannot be found. An
incomplete record of account does not provide a platform to detect the frauds
in the books of accounts. It is unscientific, inaccurate so it is no possible to
find the frauds by following some systematic rules or practices.
25. Book keeping and accounting:
Book keeping usually involves only the recording of economic
events and is therefore, just one part of accounting process.
Accounting involves the entire accounting process i.e.
identification, measurement, recording analysis and
communication of financial information.
Now-a-days much of the book-keeping function is performed by
computers.
26. Rules for debiting and crediting:-
The rules of debit and credit depend on the nature of an account. If aspect
related to persons, personal account rules, if assets real account rule and if
expenses or incomes nominal account rules are applicable.
Personal accounts: Personal accounts deal with persons. These include
natural persons such as Rama Rao, Latha etc., artificial persons or legal
persons such as Tata Company Ltd, Andhra Bank etc and representative
personal accounts.
Rule: Debit ((Dr) The receiver
Credit (Cr) the giver
E.g.:1. Cash received from Raju is Rs 5000/- . Here Raju is personal
a/c and he is Cr (giver).
2. Goods sold to Chandra is Rs 7000/- . Here Chandra is personal a/c
and he is Dr (receiver).
27. Real accounts: Real a/c deals with assets. These include tangible assets
like land, buildings, machinery etc which can be seen touched and
intangible assets like goodwill, trademarks etc which cannot be seen but
can be measured.
Rule: Dr what comes in?
Cr what goes out?
E.g. goods purchased for cash RS 8000/-. Here goods and cash are real
a/c. Goods is Dr(coming) while cash is Cr(going).
Nominal accounts: Nominal accounts are deals with expenses like rent,
wages, salary, transport etc and incomes like discount received, rent
received, commissions received etc.
Rule: Dr the expenses and losses
Cr the incomes and gains
E.g. 1. Salary paid by cash Rs 5000/- . Salary is nominal a/c and is Dr
(expenditure)
2. Interest received Rs 5000/- .interest is nominal a/c and is Dr
(income)
28. Journal: The term journal means a daily record of events or transactions.
Every transaction relating to a business is recorded in chronological order
as every transaction is first recorded in a journal. It is also called as a
book of original entry or first entry or prime entry.
The process of entering the transactions in a journal is called
as “JOURNALISING”. So transactions which are recorded in a journal
are called as a “JOURNAL ENTRY”.
Pro-forma of Journal
Advantages of journal:
1.It shows all necessary information about transaction
2.It provides an explanation of the transaction.
3.It provides a data wise record of all the transactions.
4.It helps to locate and prevent errors.
Date particulars L
F
Debit credit
29. Ledger:
Journal is the record of all the transactions that take place in organization, in a
chronological order. But, Ledger is the book which contains various accounts.
In other words ledger is a set of accounts. It contains all the accounts of business
whether real, nominal and personal thus, “a Ledger account may be defined as a
summary statement of all the transactions relating to a person, asset, expense or
income which have taken place during given period of time and shows their net
effect”.
Advantages or Features:-
It provides complete information about all accounts in one book.
It is permanent record of business transactions.
It enables to ascertain what are the main items of revenue & Expenses
It enables to ascertain what are the assets and amount & what are the liabilities
and amount.
It facilitates the preparation of final accounts.
30. Pro-forma of Ledger
Name of the Account
Date Particulars JF Amount Date Particulars JF Amount
1
2
3
4
Journal Ledger
It is a book of origin
entry.
It is a book of final entry.
Transactions recorded in
chronological order.
Transactions recorded in
particular order.
It is a subsidiary Book. It is a principal book.
The process of recording
financial transaction in
the journal is called
Journaling.
The process of recording
transaction in the ledger
is called posting.
Difference between Journal & Ledger
31. Trial Balance:-
After posting the journal entries into the respective
ledger accounts and balancing them, the next step is preparation of
“trial balance”. It is a statement prepared, after completion of
ledger accounts to check the arithmetical accuracy of the books of
accounting.
According to double entry system every
transaction should have debit and credit effect therefore the total of
debit balances of all the accounts should equal to credit balances.
32. Pro-forma of Trial Balance
Trial Balance of……As on……
Name of the account Debit(Rs) Credit(Rs)
Capital A/c Xxx
Drawings A/c Xxx
Asset A/c Xxx
Liabilities A/c Xxx
Purchases A/c Xxx
Purchase returns A/c Xxx
Sales A/c Xxx
Sales returns A/c Xxx
Reserves and provisions A/c Xxx
Exp & Losses A/c Xxx
Outstanding Exp xxx
Incomes & gains A/c Xxx
Prepaid Expenses A/c (Un expired expenses) Xxx
Income Receivable A/c (Accrued Income A/c) Xxx
Income Received in advance Xxx
33. Subsidiary books:-
Journal is called as the book of first entry, where all transaction
recorded before in the respective ledger. But in a big organization one
journal and one ledger for each transaction and may not be easy to
prepare and update. Therefore, in order to overcome this difficulty, a
journal is sub divided into different books.
These books are called as “subsidiary books”
The following are the various subsidiary books being maintained by
organization.
Purchase book: this book is records all credit purchases only. Purchase
of goods for cash and purchase of assets for cash or credit will not be
recorded in this book. Purchase book is otherwise called purchases day
book, purchases journal or purchases register.
Purchase returns book: this book is used to record the particulars of
goods returned to the suppliers. This book is otherwise called returns
outward book.
34. Sales book: this book is records all credit sales only. Goods are
sold for cash and sale of assets for cash or credit will not be
recorded in this book. This book is otherwise called sales day
book, sales journal or sales register.
Sales returns book: this book is used to record the particulars of
goods returned by the customers. This book is otherwise called
returns inward book.
Cash book: all cash transactions, receipts and payments are
recorded in this book. Cash includes cheques, money orders etc.
Types of cash book
Simple column cash book
Two column cash book
Three column cash book
Petty cash book
35. Simple or single column cash book: this simple cash book
is record of only cash transactions.
Two column cash book: two column cash book is one
which consists of two separate columns on the debit side
as well as credit side for recording cash and discount.
Three column cash book: treble column cash book is one
in which there are three columns on each side - debit and
credit side. One is used to record cash transactions, the
second is used to record bank transactions and third is
used to record discount received and paid.
36. Petty cash book: In almost all businesses, it is found
necessary to keep small sums of ready money with the
cashier or petty cashier for the purpose of meeting
small expenses such as postage, telegrams, stationary and
office sundries etc. The sum of money so kept in hand
generally termed as petty cash and book in which the petty
cash expenditures are recorded is termed as petty cash book.
Bills receivable book: this book is used to record all the
bills and promissory notes are received from the customers.
Bills Payable book: this book is used to record all the bills
and promissory notes accepted to the suppliers.
Journal Proper: The transaction which are not recorded in
the above seven books is recorded in this book.
37. Pro-forma of purchase book
Pro-forma of purchase returns book
Pro-forma of sales book
Pro-forma of sales returns book
Date Particulars LF Inward invoice no Amount (Rs)
Date Particulars LF Debit note no Amount (Rs)
Date Particulars LF Outward invoice no Amount (Rs)
Date Particulars LF Credit note no Amount (Rs)
38. Pro-forma of simple cash book
Pro-forma of Two Column cash book
Pro-forma of Three column cash book
Date Particulars Amount Date Particulars Amount
Date Particulars Discount Amount Date Particulars Discount Amount
Date Particulars LF Disc. Cash Bank Date Particulars LF Disc. Cash Bank
39. Pro-forma of petty cash book
Pro-forma of Bills Receivable book
Pro-forma of Bills Payable book
Receipts Date Particulars Total Conveyance Cartage Stationary Postage
S
n
o
Date
received
From
whom
received
Drawer Accepter Where
payable
Date
of bill
term Due
date
F Amount Remark
S.
no
Date
given
To whom
given
Name of
payee
Where
payable
Date
of bill
Term due
date
LF Amount Remarks
40. Final Accounts:
Final accounts are prepared by an organization at end of the
financial years to know the operational efficiency and
financial position of the business. Financial account for a
trading firm refers to
Trading and profit loss A/c.
Balance sheet.
Trading Account:
This account is prepared to ascertain the profit or loss
earned by the business from buying and selling of goods
manufactured during a particular period of time. Normally
the period is financial year. The profit earned in this account
is called “GROSS PROFIT” and the profit or loss earned
from this account is transferred to profit or loss A/c.
41. Pro-forma or Trading A/c
Trading A/c of……for the year ended…….
particulars Amount
(Rs)
Amount
(Rs)
particulars Amount
(Rs)
Amount
(Rs)
To opening stock Xxx By sales
Loss: Sales returns
xxx
xxxTo purchases
Less: purchase returns
xxx
xxx
xx
xx
To carriage inwards xxx By closing stock xxx
To fuel and power xxx By gross loss c/d xxx
To manufacturing exp xxx
To coal, water and gas xxx
To motive power xxx
To octroi xxx
To import duty xxx
To custom duty xxx
To consumable stores xxx
To salary to foreman/
works manager
xxx
To royally on mfg goods xxx
To gross profit c/d xxx
XXX XXX
42. Profit & Loss A/C:
It is an account meant for showing net financial result of the
business i.e., Net profit or Net loss.
The profit or loss is arrived at by carrying forward gross profit or gross loss
from trading account credit or debit side respectively.
Apart from this all expenses, other than showing in trading account
and debited to profit or loss A/c. these expenses could be all office and
administration and selling or distribution etc. any income is credited to this
account like commissions received, rent received, dividends received,
discount received etc.
If the total of the credit side is greater than debit side, the difference is net
profit. This is written on debit side as “TO NET PROFIT transferred to
capital account”
If the total of debit side greater than credit side, the difference is net loss.
This is shown on credit side as “BY NET LOSS transferred to capital
account”.
44. Balance sheet:
After preparing the trading account and profit and loss A/c. a
business organization prepares a statement called “BALANCE
SHEET” By the preparation of this statement, the financial
position of the business can be derived.
This statement called balance sheet is in a tabular
form. The left side is called LIABILITIES and the right side is
called ASSETS. It is known fact that the assets of a business
should be equal to the sum of capital and liabilities
Capital + liabilities=Assets.
Thus the liabilities side and assets side of the balance sheet
tally i.e., the total of liabilities should be equal to the assets.