SlideShare a Scribd company logo
Introduction to Accounting
Presented by;
Mayur Khatri
What is accounting?
• Accounting as a language
• “Accounting is the art of recording, classifying and
summarizing in a significant manner in terms of money,
transactions and events that are of financial character and
interpreting the results thereof.’
• The art of recording involves writing the transactions of
financial character reasonable soon after the occurrence, in
the records maintained by the company.
• The classifying is concerned with the systematic analysis of
the recorded data under appropriate heads.
• The summarizing is presenting data in a manner which is
useful to internal and external end users of accounts.
End users of accounts
• External users:
• Individuals and organizations
• Regulatory authorities and government agencies
• Labor unions, stock brokers and trade associations
• Auditor of the business
• Share holders
Internal users:
• Owners of the business
• Managers at various levels, chief executives
• Employees of the business
Kinds of accounting activities
• Financial accounting
• Income-tax accounting
• Cost accounting
• Management accounting
• Management reporting
Accounting terms
1. Accrual: recognition of revenues and costs as they earned or
incurred but not paid or received.
2. Amortization: the gradual and systematic writing off an asset
over an appropriate period. Eg. Advertising expenses.
3. Annual report: the information provided annually by the
management of an enterprise to the owners and other
interested persons, eg. Different financial statements.
4. Assets: tangible objects or intangible rights owned by an
enterprise and carrying probable future benefits.
5. Balance sheet: a statement of financial position of an
enterprise at a given date with its assets, liabilities , capital,
reserves and other balances at their book values.
Contd.
6. Bonus shares: shares allotted by capitalization of the reserves
or surplus.
7. Book value: the amount at which an item appears in the books
of account or financial statement.
8. Contingent liability: an obligations relating to an existing
condition or situation which may arise in the future
depending on the occurrence or non-occurrence of uncertain
events.
9. Cost of goods sold: the cost of goods sold during an
accounting period. In manufacturing operations, it includes
cost of material, labor and factory costs.
Contd.
10. Cost of sales: cost of goods sold plus selling and
administrative expenses.
11. Current assets: cash and other assets that are expected to be
converted into cash in the normal course of business.
12. Current liability: liability including loans, deposits and bank
overdraft which falls due for payment in relatively short
period, normally not more than twelve months.
13. Debentures: a formal document constituting
acknowledgement of debt by an enterprise, normally
containing provisions regarding payment of interest,
repayment of principle and security.
Contd.
14. Depreciation: a measure of consumption or other loss of value of
a depreciable value arising from use, because of time or
obsolescence through technology and market changes.
15. Earning per share: the earnings in monetary terms attributable to
each equity share based on net profit for the period where all other
liabilities are paid.
16. Fixed assets: assets held for the purpose of providing or producing
goods or services and that is not held for resale in the normal
course of business.
17. Goodwill: an intangible asset arising from business connections,
trade name or reputation of the business. Accounting conventions
do not permit the recording of self generated goodwill, but once it
is acquired by the other firm the premium prices are paid in terms
of goodwill.
Contd.
18. Gross margin or gross profit: the excess of the proceeds of
good sold and services rendered during a period over their
costs.
19. Income and expenditure statement: a financial statement
often prepared by non profit enterprises like clubs,
associations etc. to show their revenues and expenses.
20. Intangible assets: asset which does not have a physical
identity, eg. Goodwill, patent.
21. Inventory: tangible property held for sale in the ordinary
course of business or in the process of production for such
sale, or for consumption in the production of goods or
services.
Contd.
22. Investments: assets held not for operational purposes or for
rendering services. Eg. Securities, shares, debentures, etc.
23. Liability: the financial obligation of an enterprise.
24. Long term liability: liability which does not fall due for
payment in a relatively short period.
25.Mortgage: a transfer of interest in specific immovable
property for the purpose of securing loan.
26.Net fixed assets: fixed assets less depreciation.
27.Net profit: the excess of revenue over expenses during a
particular accounting period. When the result is negative it is
net loss.
Contd.
28. Profit and loss statement: a financial statement which
presents the revenues and expenses of an enterprise for an
accounting period and shows net profit or net loss.
29. Provision: an amount retained by way of providing for any
liability the amount of which can not be determined with
substantial accuracy.
30. Reserve: the portion of earnings, receipts, surplus or profit
appropriated by the management for a general or specific
purpose. Reserve can be of two types; capital reserve and
revenue reserve.
A capital reserve is not available for distribution as dividend.
Any reserve that is not a capital reserve is a revenue reserve.
Contd.
31. Sales turnover: the aggregate amount for which sales are
effected or services rendered by an enterprise.
32. Secured loan: loan secured wholly or partly against an asset.
33. Share premium: the excess of issue price of shares over their
face value. Share premium usually shown in the reserve.
Share premium is not a revenue reserve. It can be issued as
bonus share.
34. Work in process: work in process includes all material which
have undergone manufacturing or processing operations, but
upon which further operations are necessary before the
products is ready for sale.
Concepts – B/S
1. The Business Entity concept
2. Going concern concept
3. Monetary unit concept
4. Cost concept
5. Conservatism concept
6. Accounting equivalence concept:
Assets = Owner's equity + Liability
Concepts – P & L A/C
1. The accounting period concept
2. Realization concept
3. Accrual concept
4. Matching concept with revenue
Recording Transactions – Journal entry
• Recording (Journal): recording refers to the
prime record of every transaction and event in
“Journal”. Thus, recording is journalizing and
the entry is called journal entry.
• Types of accounts: all the transactions can be
classified under three types of accounts:
- Personal Accounts
- Real accounts
- Nominal Accounts
Contd.
• Rule of debit and credit:
1. Personal Account: Debit the receiver and
credit the giver
2. Real Account: Debit what comes in and
credit what goes out
3. Nominal Account: Debit the expense and
credit the incomes

More Related Content

What's hot

Account
AccountAccount
Account
Niyati Mehta
 
accounting ppt..pdf
accounting ppt..pdfaccounting ppt..pdf
accounting ppt..pdf
ChristineJoyMaranan2
 
Basic accounting notes
Basic accounting notesBasic accounting notes
Basic accounting notes
Dr. Bhavik Shah
 
Basic accounting principles
Basic accounting principlesBasic accounting principles
Basic accounting principles
Umar Gul
 
Introduction to Accounting- class 11
Introduction to Accounting-  class 11Introduction to Accounting-  class 11
Introduction to Accounting- class 11
Susmita Patra
 
Introduction to Accounting
Introduction to AccountingIntroduction to Accounting
Introduction to Accounting
Dr. Bhavik Shah
 
Internal and external users of financial information
Internal and external users of financial informationInternal and external users of financial information
Internal and external users of financial information
Dyann Barras
 
Basics of accounts
Basics of accountsBasics of accounts
Basics of accounts
Anup Suchak
 
Basic accounting terms
Basic accounting termsBasic accounting terms
Basic accounting terms
KULDEEP MATHUR
 
Accounting equation
Accounting equationAccounting equation
Accounting equation
Gugu Princess Mvubu
 
Users of accounting information
Users of accounting informationUsers of accounting information
Users of accounting information
Pulkit Bordia
 
Control account
Control accountControl account
Control account
Khalid Aziz
 
Chapter 3 - The Adjusting Process
Chapter 3 - The Adjusting ProcessChapter 3 - The Adjusting Process
Chapter 3 - The Adjusting Process
Gene Carboni
 
Financial accounting quiz
Financial accounting quizFinancial accounting quiz
Financial accounting quiz
Muhammad Mustafa
 
The golden rules in accounting or rules of debit and credit
The golden rules in accounting or rules of debit and creditThe golden rules in accounting or rules of debit and credit
The golden rules in accounting or rules of debit and credit
kaslinsas
 
| Accounting Cycle | Double Entry Accounting | Basic Accounting Equation | 8 ...
| Accounting Cycle | Double Entry Accounting | Basic Accounting Equation | 8 ...| Accounting Cycle | Double Entry Accounting | Basic Accounting Equation | 8 ...
| Accounting Cycle | Double Entry Accounting | Basic Accounting Equation | 8 ...
Ahmad Hassan
 
Accounting ppt
Accounting pptAccounting ppt
Accounting ppt
Narasimha Simha
 
Introduction To Accounting
Introduction To AccountingIntroduction To Accounting
Introduction To Accounting
Yousef Hani
 
Topic 3 Double entry book keeping
Topic 3 Double entry book keepingTopic 3 Double entry book keeping
Topic 3 Double entry book keeping
Srinivas Methuku
 
financial accounting
 financial accounting    financial accounting

What's hot (20)

Account
AccountAccount
Account
 
accounting ppt..pdf
accounting ppt..pdfaccounting ppt..pdf
accounting ppt..pdf
 
Basic accounting notes
Basic accounting notesBasic accounting notes
Basic accounting notes
 
Basic accounting principles
Basic accounting principlesBasic accounting principles
Basic accounting principles
 
Introduction to Accounting- class 11
Introduction to Accounting-  class 11Introduction to Accounting-  class 11
Introduction to Accounting- class 11
 
Introduction to Accounting
Introduction to AccountingIntroduction to Accounting
Introduction to Accounting
 
Internal and external users of financial information
Internal and external users of financial informationInternal and external users of financial information
Internal and external users of financial information
 
Basics of accounts
Basics of accountsBasics of accounts
Basics of accounts
 
Basic accounting terms
Basic accounting termsBasic accounting terms
Basic accounting terms
 
Accounting equation
Accounting equationAccounting equation
Accounting equation
 
Users of accounting information
Users of accounting informationUsers of accounting information
Users of accounting information
 
Control account
Control accountControl account
Control account
 
Chapter 3 - The Adjusting Process
Chapter 3 - The Adjusting ProcessChapter 3 - The Adjusting Process
Chapter 3 - The Adjusting Process
 
Financial accounting quiz
Financial accounting quizFinancial accounting quiz
Financial accounting quiz
 
The golden rules in accounting or rules of debit and credit
The golden rules in accounting or rules of debit and creditThe golden rules in accounting or rules of debit and credit
The golden rules in accounting or rules of debit and credit
 
| Accounting Cycle | Double Entry Accounting | Basic Accounting Equation | 8 ...
| Accounting Cycle | Double Entry Accounting | Basic Accounting Equation | 8 ...| Accounting Cycle | Double Entry Accounting | Basic Accounting Equation | 8 ...
| Accounting Cycle | Double Entry Accounting | Basic Accounting Equation | 8 ...
 
Accounting ppt
Accounting pptAccounting ppt
Accounting ppt
 
Introduction To Accounting
Introduction To AccountingIntroduction To Accounting
Introduction To Accounting
 
Topic 3 Double entry book keeping
Topic 3 Double entry book keepingTopic 3 Double entry book keeping
Topic 3 Double entry book keeping
 
financial accounting
 financial accounting    financial accounting
financial accounting
 

Viewers also liked

Introduction to Accounting
Introduction to AccountingIntroduction to Accounting
Introduction to Accounting
Aditya Kapoor
 
Tax deducted at source on salary
Tax deducted at source on salaryTax deducted at source on salary
Tax deducted at source on salary
Gayathri Iyyer
 
Accounting an introduction
Accounting   an introductionAccounting   an introduction
Accounting an introduction
Mahesh Chandra Sharma
 
Introduction To Accounting
Introduction To AccountingIntroduction To Accounting
Introduction To Accounting
Nimo Gill
 
Ch01 - Introduction to Accounting and Business
Ch01 - Introduction to Accounting and BusinessCh01 - Introduction to Accounting and Business
Ch01 - Introduction to Accounting and Business
Trisdarisa Soedarto, MPM, MQM
 
Unit 1 introduction to accounting
Unit 1 introduction to accountingUnit 1 introduction to accounting
Unit 1 introduction to accounting
Iva Walton
 
Chapter 3 recording of transaction i
Chapter 3 recording of transaction iChapter 3 recording of transaction i
Chapter 3 recording of transaction i
Huma Tarannum
 
An Introduction to Accounting Theory
An Introduction to Accounting TheoryAn Introduction to Accounting Theory
An Introduction to Accounting Theory
Arthik Davianti
 
Accounting theory
Accounting theoryAccounting theory
Accounting theory
rochmatullah rochmatullah
 
Introduction Of Accounting
Introduction Of AccountingIntroduction Of Accounting
Introduction Of Accounting
guest441011
 
Introduction to accounting chapter 1 new
Introduction to accounting chapter 1 newIntroduction to accounting chapter 1 new
Introduction to accounting chapter 1 new
SAITO College Sdn Bhd
 
Definition of Accounting
Definition of AccountingDefinition of Accounting
Definition of Accounting
Irma_Miller_11344
 
Basics of accounting
Basics of accountingBasics of accounting
Basics of accounting
ajithjoanes
 
Free Download Powerpoint Slides
Free Download Powerpoint SlidesFree Download Powerpoint Slides
Free Download Powerpoint Slides
George
 
Slideshare Powerpoint presentation
Slideshare Powerpoint presentationSlideshare Powerpoint presentation
Slideshare Powerpoint presentation
elliehood
 
State of the Word 2011
State of the Word 2011State of the Word 2011
State of the Word 2011
photomatt
 

Viewers also liked (16)

Introduction to Accounting
Introduction to AccountingIntroduction to Accounting
Introduction to Accounting
 
Tax deducted at source on salary
Tax deducted at source on salaryTax deducted at source on salary
Tax deducted at source on salary
 
Accounting an introduction
Accounting   an introductionAccounting   an introduction
Accounting an introduction
 
Introduction To Accounting
Introduction To AccountingIntroduction To Accounting
Introduction To Accounting
 
Ch01 - Introduction to Accounting and Business
Ch01 - Introduction to Accounting and BusinessCh01 - Introduction to Accounting and Business
Ch01 - Introduction to Accounting and Business
 
Unit 1 introduction to accounting
Unit 1 introduction to accountingUnit 1 introduction to accounting
Unit 1 introduction to accounting
 
Chapter 3 recording of transaction i
Chapter 3 recording of transaction iChapter 3 recording of transaction i
Chapter 3 recording of transaction i
 
An Introduction to Accounting Theory
An Introduction to Accounting TheoryAn Introduction to Accounting Theory
An Introduction to Accounting Theory
 
Accounting theory
Accounting theoryAccounting theory
Accounting theory
 
Introduction Of Accounting
Introduction Of AccountingIntroduction Of Accounting
Introduction Of Accounting
 
Introduction to accounting chapter 1 new
Introduction to accounting chapter 1 newIntroduction to accounting chapter 1 new
Introduction to accounting chapter 1 new
 
Definition of Accounting
Definition of AccountingDefinition of Accounting
Definition of Accounting
 
Basics of accounting
Basics of accountingBasics of accounting
Basics of accounting
 
Free Download Powerpoint Slides
Free Download Powerpoint SlidesFree Download Powerpoint Slides
Free Download Powerpoint Slides
 
Slideshare Powerpoint presentation
Slideshare Powerpoint presentationSlideshare Powerpoint presentation
Slideshare Powerpoint presentation
 
State of the Word 2011
State of the Word 2011State of the Word 2011
State of the Word 2011
 

Similar to Introduction to accounting

Finance
FinanceFinance
Finance
Rintu Das
 
Some basic important finance/accounting_concepts
Some basic important finance/accounting_conceptsSome basic important finance/accounting_concepts
Some basic important finance/accounting_concepts
Saurabh Verma
 
Interview material Anil chowdary pulipati
Interview material  Anil chowdary pulipatiInterview material  Anil chowdary pulipati
Interview material Anil chowdary pulipati
ANILKUMARPULIPATI1
 
Accounting basics and interview questions answers
Accounting basics and interview questions answersAccounting basics and interview questions answers
Accounting basics and interview questions answers
Vijay D Narigara
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
interviewW
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
Pmp15770
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
interview16
 
financial management
financial managementfinancial management
financial management
Himangshu Bhuyan
 
Accounting1
Accounting1Accounting1
Accounting1
Muhammad Raza
 
Some Basic Finance Important Concepts
Some Basic Finance Important ConceptsSome Basic Finance Important Concepts
Some Basic Finance Important Concepts
Dr. Durgaprasad Navulla
 
Capital i.q
Capital i.qCapital i.q
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
pinping200
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
Pmp15710
 
Commerce and mangment important concepts for interviews
Commerce and mangment important concepts for interviewsCommerce and mangment important concepts for interviews
Commerce and mangment important concepts for interviews
RAVI KUMAR J
 
Accounts questions
Accounts questionsAccounts questions
Accounts questions
Shabbeer Mohammed
 
Finance iq questions
Finance iq questionsFinance iq questions
Finance iq questions
saiyuva
 
Basic accounting terminology
Basic accounting terminologyBasic accounting terminology
Basic accounting terminology
Rajat Baranwal
 
Ppt
PptPpt
Basicsofaccounting 120223232525-phpapp01
Basicsofaccounting 120223232525-phpapp01Basicsofaccounting 120223232525-phpapp01
Basicsofaccounting 120223232525-phpapp01
BeinghumanSandipThakuri
 
Basicsofaccounting 120223232525-phpapp01
Basicsofaccounting 120223232525-phpapp01Basicsofaccounting 120223232525-phpapp01
Basicsofaccounting 120223232525-phpapp01
SandipShahi
 

Similar to Introduction to accounting (20)

Finance
FinanceFinance
Finance
 
Some basic important finance/accounting_concepts
Some basic important finance/accounting_conceptsSome basic important finance/accounting_concepts
Some basic important finance/accounting_concepts
 
Interview material Anil chowdary pulipati
Interview material  Anil chowdary pulipatiInterview material  Anil chowdary pulipati
Interview material Anil chowdary pulipati
 
Accounting basics and interview questions answers
Accounting basics and interview questions answersAccounting basics and interview questions answers
Accounting basics and interview questions answers
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
 
financial management
financial managementfinancial management
financial management
 
Accounting1
Accounting1Accounting1
Accounting1
 
Some Basic Finance Important Concepts
Some Basic Finance Important ConceptsSome Basic Finance Important Concepts
Some Basic Finance Important Concepts
 
Capital i.q
Capital i.qCapital i.q
Capital i.q
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
 
Accounting interview questions answers
Accounting interview questions answersAccounting interview questions answers
Accounting interview questions answers
 
Commerce and mangment important concepts for interviews
Commerce and mangment important concepts for interviewsCommerce and mangment important concepts for interviews
Commerce and mangment important concepts for interviews
 
Accounts questions
Accounts questionsAccounts questions
Accounts questions
 
Finance iq questions
Finance iq questionsFinance iq questions
Finance iq questions
 
Basic accounting terminology
Basic accounting terminologyBasic accounting terminology
Basic accounting terminology
 
Ppt
PptPpt
Ppt
 
Basicsofaccounting 120223232525-phpapp01
Basicsofaccounting 120223232525-phpapp01Basicsofaccounting 120223232525-phpapp01
Basicsofaccounting 120223232525-phpapp01
 
Basicsofaccounting 120223232525-phpapp01
Basicsofaccounting 120223232525-phpapp01Basicsofaccounting 120223232525-phpapp01
Basicsofaccounting 120223232525-phpapp01
 

More from Mayur Khatri

Essential Safety precautions during monsoon season
Essential Safety precautions during monsoon seasonEssential Safety precautions during monsoon season
Essential Safety precautions during monsoon season
Mayur Khatri
 
Work Life Balance
Work Life BalanceWork Life Balance
Work Life Balance
Mayur Khatri
 
Recruitment selection process,methods and steps
Recruitment selection process,methods and stepsRecruitment selection process,methods and steps
Recruitment selection process,methods and steps
Mayur Khatri
 
Employee induction programme
Employee induction programmeEmployee induction programme
Employee induction programme
Mayur Khatri
 
Developing effective communication skills
Developing effective communication skillsDeveloping effective communication skills
Developing effective communication skills
Mayur Khatri
 
PERCEPTION OF FACULTIES TOWARDS HUMAN RESOURCE DEVELOPMENT CLIMATE
PERCEPTION OF FACULTIES TOWARDS HUMAN RESOURCE DEVELOPMENT  CLIMATEPERCEPTION OF FACULTIES TOWARDS HUMAN RESOURCE DEVELOPMENT  CLIMATE
PERCEPTION OF FACULTIES TOWARDS HUMAN RESOURCE DEVELOPMENT CLIMATE
Mayur Khatri
 
Narayana Murthy Committee Report on Corporate Governance
Narayana Murthy Committee Report on Corporate GovernanceNarayana Murthy Committee Report on Corporate Governance
Narayana Murthy Committee Report on Corporate Governance
Mayur Khatri
 
NABARD
NABARDNABARD
NABARD
Mayur Khatri
 
Inflation
Inflation Inflation
Inflation
Mayur Khatri
 
Porter's Five Forces
Porter's Five ForcesPorter's Five Forces
Porter's Five Forces
Mayur Khatri
 
Theory x & y
Theory x & yTheory x & y
Theory x & y
Mayur Khatri
 
Understanding Financial Statement / Report
Understanding Financial Statement / ReportUnderstanding Financial Statement / Report
Understanding Financial Statement / Report
Mayur Khatri
 
Research Methodology study method
Research Methodology study methodResearch Methodology study method
Research Methodology study method
Mayur Khatri
 
THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
THE EMPLOYEES’ PROVIDENT FUNDSANDMISCELLANEOUS PROVISIONS ACT,1952THE EMPLOYEES’ PROVIDENT FUNDSANDMISCELLANEOUS PROVISIONS ACT,1952
THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
Mayur Khatri
 
EMPLOYEE STATE INSURANCE ACT 1948
EMPLOYEE STATE INSURANCE ACT 1948EMPLOYEE STATE INSURANCE ACT 1948
EMPLOYEE STATE INSURANCE ACT 1948
Mayur Khatri
 
Equal Remuneration Act, 1976
Equal Remuneration Act, 1976Equal Remuneration Act, 1976
Equal Remuneration Act, 1976
Mayur Khatri
 
Payment of Bonus Act 1965
Payment of Bonus Act 1965Payment of Bonus Act 1965
Payment of Bonus Act 1965
Mayur Khatri
 
Different types of allowances
Different types of allowancesDifferent types of allowances
Different types of allowances
Mayur Khatri
 
The State Trading Corporation of India Ltd
The State Trading Corporation of India LtdThe State Trading Corporation of India Ltd
The State Trading Corporation of India Ltd
Mayur Khatri
 

More from Mayur Khatri (19)

Essential Safety precautions during monsoon season
Essential Safety precautions during monsoon seasonEssential Safety precautions during monsoon season
Essential Safety precautions during monsoon season
 
Work Life Balance
Work Life BalanceWork Life Balance
Work Life Balance
 
Recruitment selection process,methods and steps
Recruitment selection process,methods and stepsRecruitment selection process,methods and steps
Recruitment selection process,methods and steps
 
Employee induction programme
Employee induction programmeEmployee induction programme
Employee induction programme
 
Developing effective communication skills
Developing effective communication skillsDeveloping effective communication skills
Developing effective communication skills
 
PERCEPTION OF FACULTIES TOWARDS HUMAN RESOURCE DEVELOPMENT CLIMATE
PERCEPTION OF FACULTIES TOWARDS HUMAN RESOURCE DEVELOPMENT  CLIMATEPERCEPTION OF FACULTIES TOWARDS HUMAN RESOURCE DEVELOPMENT  CLIMATE
PERCEPTION OF FACULTIES TOWARDS HUMAN RESOURCE DEVELOPMENT CLIMATE
 
Narayana Murthy Committee Report on Corporate Governance
Narayana Murthy Committee Report on Corporate GovernanceNarayana Murthy Committee Report on Corporate Governance
Narayana Murthy Committee Report on Corporate Governance
 
NABARD
NABARDNABARD
NABARD
 
Inflation
Inflation Inflation
Inflation
 
Porter's Five Forces
Porter's Five ForcesPorter's Five Forces
Porter's Five Forces
 
Theory x & y
Theory x & yTheory x & y
Theory x & y
 
Understanding Financial Statement / Report
Understanding Financial Statement / ReportUnderstanding Financial Statement / Report
Understanding Financial Statement / Report
 
Research Methodology study method
Research Methodology study methodResearch Methodology study method
Research Methodology study method
 
THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
THE EMPLOYEES’ PROVIDENT FUNDSANDMISCELLANEOUS PROVISIONS ACT,1952THE EMPLOYEES’ PROVIDENT FUNDSANDMISCELLANEOUS PROVISIONS ACT,1952
THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
 
EMPLOYEE STATE INSURANCE ACT 1948
EMPLOYEE STATE INSURANCE ACT 1948EMPLOYEE STATE INSURANCE ACT 1948
EMPLOYEE STATE INSURANCE ACT 1948
 
Equal Remuneration Act, 1976
Equal Remuneration Act, 1976Equal Remuneration Act, 1976
Equal Remuneration Act, 1976
 
Payment of Bonus Act 1965
Payment of Bonus Act 1965Payment of Bonus Act 1965
Payment of Bonus Act 1965
 
Different types of allowances
Different types of allowancesDifferent types of allowances
Different types of allowances
 
The State Trading Corporation of India Ltd
The State Trading Corporation of India LtdThe State Trading Corporation of India Ltd
The State Trading Corporation of India Ltd
 

Recently uploaded

C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptxC1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
mulvey2
 
Lifelines of National Economy chapter for Class 10 STUDY MATERIAL PDF
Lifelines of National Economy chapter for Class 10 STUDY MATERIAL PDFLifelines of National Economy chapter for Class 10 STUDY MATERIAL PDF
Lifelines of National Economy chapter for Class 10 STUDY MATERIAL PDF
Vivekanand Anglo Vedic Academy
 
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumPhilippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
MJDuyan
 
Electric Fetus - Record Store Scavenger Hunt
Electric Fetus - Record Store Scavenger HuntElectric Fetus - Record Store Scavenger Hunt
Electric Fetus - Record Store Scavenger Hunt
RamseyBerglund
 
Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...
Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...
Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...
imrankhan141184
 
Gender and Mental Health - Counselling and Family Therapy Applications and In...
Gender and Mental Health - Counselling and Family Therapy Applications and In...Gender and Mental Health - Counselling and Family Therapy Applications and In...
Gender and Mental Health - Counselling and Family Therapy Applications and In...
PsychoTech Services
 
Standardized tool for Intelligence test.
Standardized tool for Intelligence test.Standardized tool for Intelligence test.
Standardized tool for Intelligence test.
deepaannamalai16
 
Benner "Expanding Pathways to Publishing Careers"
Benner "Expanding Pathways to Publishing Careers"Benner "Expanding Pathways to Publishing Careers"
Benner "Expanding Pathways to Publishing Careers"
National Information Standards Organization (NISO)
 
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
TechSoup
 
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
Nguyen Thanh Tu Collection
 
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
EduSkills OECD
 
RHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem students
RHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem studentsRHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem students
RHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem students
Himanshu Rai
 
skeleton System.pdf (skeleton system wow)
skeleton System.pdf (skeleton system wow)skeleton System.pdf (skeleton system wow)
skeleton System.pdf (skeleton system wow)
Mohammad Al-Dhahabi
 
Haunted Houses by H W Longfellow for class 10
Haunted Houses by H W Longfellow for class 10Haunted Houses by H W Longfellow for class 10
Haunted Houses by H W Longfellow for class 10
nitinpv4ai
 
REASIGNACION 2024 UGEL CHUPACA 2024 UGEL CHUPACA.pdf
REASIGNACION 2024 UGEL CHUPACA 2024 UGEL CHUPACA.pdfREASIGNACION 2024 UGEL CHUPACA 2024 UGEL CHUPACA.pdf
REASIGNACION 2024 UGEL CHUPACA 2024 UGEL CHUPACA.pdf
giancarloi8888
 
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptx
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptxBeyond Degrees - Empowering the Workforce in the Context of Skills-First.pptx
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptx
EduSkills OECD
 
How to deliver Powerpoint Presentations.pptx
How to deliver Powerpoint  Presentations.pptxHow to deliver Powerpoint  Presentations.pptx
How to deliver Powerpoint Presentations.pptx
HajraNaeem15
 
MDP on air pollution of class 8 year 2024-2025
MDP on air pollution of class 8 year 2024-2025MDP on air pollution of class 8 year 2024-2025
MDP on air pollution of class 8 year 2024-2025
khuleseema60
 
math operations ued in python and all used
math operations ued in python and all usedmath operations ued in python and all used
math operations ued in python and all used
ssuser13ffe4
 
Stack Memory Organization of 8086 Microprocessor
Stack Memory Organization of 8086 MicroprocessorStack Memory Organization of 8086 Microprocessor
Stack Memory Organization of 8086 Microprocessor
JomonJoseph58
 

Recently uploaded (20)

C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptxC1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
C1 Rubenstein AP HuG xxxxxxxxxxxxxx.pptx
 
Lifelines of National Economy chapter for Class 10 STUDY MATERIAL PDF
Lifelines of National Economy chapter for Class 10 STUDY MATERIAL PDFLifelines of National Economy chapter for Class 10 STUDY MATERIAL PDF
Lifelines of National Economy chapter for Class 10 STUDY MATERIAL PDF
 
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumPhilippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
 
Electric Fetus - Record Store Scavenger Hunt
Electric Fetus - Record Store Scavenger HuntElectric Fetus - Record Store Scavenger Hunt
Electric Fetus - Record Store Scavenger Hunt
 
Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...
Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...
Traditional Musical Instruments of Arunachal Pradesh and Uttar Pradesh - RAYH...
 
Gender and Mental Health - Counselling and Family Therapy Applications and In...
Gender and Mental Health - Counselling and Family Therapy Applications and In...Gender and Mental Health - Counselling and Family Therapy Applications and In...
Gender and Mental Health - Counselling and Family Therapy Applications and In...
 
Standardized tool for Intelligence test.
Standardized tool for Intelligence test.Standardized tool for Intelligence test.
Standardized tool for Intelligence test.
 
Benner "Expanding Pathways to Publishing Careers"
Benner "Expanding Pathways to Publishing Careers"Benner "Expanding Pathways to Publishing Careers"
Benner "Expanding Pathways to Publishing Careers"
 
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
 
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
 
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
 
RHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem students
RHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem studentsRHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem students
RHEOLOGY Physical pharmaceutics-II notes for B.pharm 4th sem students
 
skeleton System.pdf (skeleton system wow)
skeleton System.pdf (skeleton system wow)skeleton System.pdf (skeleton system wow)
skeleton System.pdf (skeleton system wow)
 
Haunted Houses by H W Longfellow for class 10
Haunted Houses by H W Longfellow for class 10Haunted Houses by H W Longfellow for class 10
Haunted Houses by H W Longfellow for class 10
 
REASIGNACION 2024 UGEL CHUPACA 2024 UGEL CHUPACA.pdf
REASIGNACION 2024 UGEL CHUPACA 2024 UGEL CHUPACA.pdfREASIGNACION 2024 UGEL CHUPACA 2024 UGEL CHUPACA.pdf
REASIGNACION 2024 UGEL CHUPACA 2024 UGEL CHUPACA.pdf
 
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptx
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptxBeyond Degrees - Empowering the Workforce in the Context of Skills-First.pptx
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptx
 
How to deliver Powerpoint Presentations.pptx
How to deliver Powerpoint  Presentations.pptxHow to deliver Powerpoint  Presentations.pptx
How to deliver Powerpoint Presentations.pptx
 
MDP on air pollution of class 8 year 2024-2025
MDP on air pollution of class 8 year 2024-2025MDP on air pollution of class 8 year 2024-2025
MDP on air pollution of class 8 year 2024-2025
 
math operations ued in python and all used
math operations ued in python and all usedmath operations ued in python and all used
math operations ued in python and all used
 
Stack Memory Organization of 8086 Microprocessor
Stack Memory Organization of 8086 MicroprocessorStack Memory Organization of 8086 Microprocessor
Stack Memory Organization of 8086 Microprocessor
 

Introduction to accounting

  • 2. What is accounting? • Accounting as a language • “Accounting is the art of recording, classifying and summarizing in a significant manner in terms of money, transactions and events that are of financial character and interpreting the results thereof.’ • The art of recording involves writing the transactions of financial character reasonable soon after the occurrence, in the records maintained by the company. • The classifying is concerned with the systematic analysis of the recorded data under appropriate heads. • The summarizing is presenting data in a manner which is useful to internal and external end users of accounts.
  • 3. End users of accounts • External users: • Individuals and organizations • Regulatory authorities and government agencies • Labor unions, stock brokers and trade associations • Auditor of the business • Share holders Internal users: • Owners of the business • Managers at various levels, chief executives • Employees of the business
  • 4. Kinds of accounting activities • Financial accounting • Income-tax accounting • Cost accounting • Management accounting • Management reporting
  • 5. Accounting terms 1. Accrual: recognition of revenues and costs as they earned or incurred but not paid or received. 2. Amortization: the gradual and systematic writing off an asset over an appropriate period. Eg. Advertising expenses. 3. Annual report: the information provided annually by the management of an enterprise to the owners and other interested persons, eg. Different financial statements. 4. Assets: tangible objects or intangible rights owned by an enterprise and carrying probable future benefits. 5. Balance sheet: a statement of financial position of an enterprise at a given date with its assets, liabilities , capital, reserves and other balances at their book values.
  • 6. Contd. 6. Bonus shares: shares allotted by capitalization of the reserves or surplus. 7. Book value: the amount at which an item appears in the books of account or financial statement. 8. Contingent liability: an obligations relating to an existing condition or situation which may arise in the future depending on the occurrence or non-occurrence of uncertain events. 9. Cost of goods sold: the cost of goods sold during an accounting period. In manufacturing operations, it includes cost of material, labor and factory costs.
  • 7. Contd. 10. Cost of sales: cost of goods sold plus selling and administrative expenses. 11. Current assets: cash and other assets that are expected to be converted into cash in the normal course of business. 12. Current liability: liability including loans, deposits and bank overdraft which falls due for payment in relatively short period, normally not more than twelve months. 13. Debentures: a formal document constituting acknowledgement of debt by an enterprise, normally containing provisions regarding payment of interest, repayment of principle and security.
  • 8. Contd. 14. Depreciation: a measure of consumption or other loss of value of a depreciable value arising from use, because of time or obsolescence through technology and market changes. 15. Earning per share: the earnings in monetary terms attributable to each equity share based on net profit for the period where all other liabilities are paid. 16. Fixed assets: assets held for the purpose of providing or producing goods or services and that is not held for resale in the normal course of business. 17. Goodwill: an intangible asset arising from business connections, trade name or reputation of the business. Accounting conventions do not permit the recording of self generated goodwill, but once it is acquired by the other firm the premium prices are paid in terms of goodwill.
  • 9. Contd. 18. Gross margin or gross profit: the excess of the proceeds of good sold and services rendered during a period over their costs. 19. Income and expenditure statement: a financial statement often prepared by non profit enterprises like clubs, associations etc. to show their revenues and expenses. 20. Intangible assets: asset which does not have a physical identity, eg. Goodwill, patent. 21. Inventory: tangible property held for sale in the ordinary course of business or in the process of production for such sale, or for consumption in the production of goods or services.
  • 10. Contd. 22. Investments: assets held not for operational purposes or for rendering services. Eg. Securities, shares, debentures, etc. 23. Liability: the financial obligation of an enterprise. 24. Long term liability: liability which does not fall due for payment in a relatively short period. 25.Mortgage: a transfer of interest in specific immovable property for the purpose of securing loan. 26.Net fixed assets: fixed assets less depreciation. 27.Net profit: the excess of revenue over expenses during a particular accounting period. When the result is negative it is net loss.
  • 11. Contd. 28. Profit and loss statement: a financial statement which presents the revenues and expenses of an enterprise for an accounting period and shows net profit or net loss. 29. Provision: an amount retained by way of providing for any liability the amount of which can not be determined with substantial accuracy. 30. Reserve: the portion of earnings, receipts, surplus or profit appropriated by the management for a general or specific purpose. Reserve can be of two types; capital reserve and revenue reserve. A capital reserve is not available for distribution as dividend. Any reserve that is not a capital reserve is a revenue reserve.
  • 12. Contd. 31. Sales turnover: the aggregate amount for which sales are effected or services rendered by an enterprise. 32. Secured loan: loan secured wholly or partly against an asset. 33. Share premium: the excess of issue price of shares over their face value. Share premium usually shown in the reserve. Share premium is not a revenue reserve. It can be issued as bonus share. 34. Work in process: work in process includes all material which have undergone manufacturing or processing operations, but upon which further operations are necessary before the products is ready for sale.
  • 13. Concepts – B/S 1. The Business Entity concept 2. Going concern concept 3. Monetary unit concept 4. Cost concept 5. Conservatism concept 6. Accounting equivalence concept: Assets = Owner's equity + Liability
  • 14. Concepts – P & L A/C 1. The accounting period concept 2. Realization concept 3. Accrual concept 4. Matching concept with revenue
  • 15. Recording Transactions – Journal entry • Recording (Journal): recording refers to the prime record of every transaction and event in “Journal”. Thus, recording is journalizing and the entry is called journal entry. • Types of accounts: all the transactions can be classified under three types of accounts: - Personal Accounts - Real accounts - Nominal Accounts
  • 16. Contd. • Rule of debit and credit: 1. Personal Account: Debit the receiver and credit the giver 2. Real Account: Debit what comes in and credit what goes out 3. Nominal Account: Debit the expense and credit the incomes