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 presentation talks about Meaning, of accounting, distinction between book keeping and accounting, Branches of accounting, Objectives of accounting, Uses and users of accounting information, Advantages of Accounting, Is accounting a science or an art, double entry system of financial accounting, limitations of financial accounting, important terms, journal entry, accounting concepts and conventions
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.
This presentation talks about Meaning, of accounting, distinction between book keeping and accounting, Branches of accounting, Objectives of accounting, Uses and users of accounting information, Advantages of Accounting, Is accounting a science or an art, double entry system of financial accounting, limitations of financial accounting, important terms, journal entry, accounting concepts and conventions
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.
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
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.
Fundamentals of accounting showcased the basic approach to understanding and managing accounting systems in a simplified manner. Personnel in accounting and financial reporting roles would find the presentation a practice and refresher material for successful bookkeeping and financial reports.
It's a good presentation for those students who just started to learn accounting.
Basic theory of accounting must be clear, and there for here I have uploaded this presentation.
The Cash Flow Statement translates earnings in the Income Statement into cash inflows. Explained in detail above as a part of the topic “Financial accounting”, is brought to you by Welingkar’s Distance Learning Division.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/SlideshareFaccounting
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Follow us on Twitter: https://twitter.com/WeLearnIndia
Read our latest blog at: http://welearnindia.wordpress.com
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SmartPrep's teaching methodology ensures better learning through unique interactive teaching-learning sessions, conducted by our certified & highly qualified faculty members at our state-of-the -art centres spread across Delhi-NCR and other cities of India. SmartPrep has programs in Maths, Science, English, Accountancy and Economics for Classes VII to XII.
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
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.
Fundamentals of accounting showcased the basic approach to understanding and managing accounting systems in a simplified manner. Personnel in accounting and financial reporting roles would find the presentation a practice and refresher material for successful bookkeeping and financial reports.
It's a good presentation for those students who just started to learn accounting.
Basic theory of accounting must be clear, and there for here I have uploaded this presentation.
The Cash Flow Statement translates earnings in the Income Statement into cash inflows. Explained in detail above as a part of the topic “Financial accounting”, is brought to you by Welingkar’s Distance Learning Division.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/SlideshareFaccounting
Join us on Facebook: http://www.facebook.com/welearnindia
Follow us on Twitter: https://twitter.com/WeLearnIndia
Read our latest blog at: http://welearnindia.wordpress.com
Subscribe to our Slideshare Channel: http://www.slideshare.net/welingkarDLP
SmartPrep's teaching methodology ensures better learning through unique interactive teaching-learning sessions, conducted by our certified & highly qualified faculty members at our state-of-the -art centres spread across Delhi-NCR and other cities of India. SmartPrep has programs in Maths, Science, English, Accountancy and Economics for Classes VII to XII.
Accounting concepts andprinciples all important
In financial accounting
Cost accounting
Management accounting
GAAR principles are differernt
Application in economics and accounts corporete accounting
KING ASOKA AND THE ART OF GOVERNANCE
by
Prof. Sanjeev Sareen
Assoc. Dean & Dy ACO
Faculty - Marketing & Operations
ICFAI Business School,
Gurgaon
Landline: 0124-4980950 Extn. 206
Email: sanjeev.sareen@ibsindia.org
web : www.ibsindia.org
facebook: https://www.facebook.com/GurgaonIBS/
Deferred Tax,
By: Mahima Pahwa (IBS Gurgaon)
Differences between Accounting Income and Taxable Income
TYPES OF DEFERRED TAX
DEFERRED TAX LIABILITY
FINANCIAL STATEMENTS PRESENTATION
"Talent wins games, but Teamwork wins Championships" - Micheal Jordan
Samvaad brings you "The Magic of Team Work" in it's July 2018 issue. Learn how an effective team work can create wonders in your career from IBS Gurgaon faculties prospective.
Read about the academic, extracurricular events happened in IBS Gurgaon during April-June 2018. Know your surroundings through Samvaad.
#IBSAT2018 #IBSGURGAON #IBSINDIA #SAMVAAD
Introduction to Financial Management
By. Prof Navneet Saxena
IBS Gurgaon
Objective:
At the end of this session you should be able to understand
Objectives
Functions and Scope
Evolution
Interface of Financial Management with Other Functional Areas
Environment of Corporate Finance
International conference on management imperative for sustainable growth.ICFAI Business School
International conference on management imperative for sustainable growth. A call for papers in the area of marketing, human resource, finance, economics and business analytics.
All the information about registration is further mentioned in the pdf.
Learn some tips and tricks to prepare a good resume, Cv, Biodata.
Tips to crack different type of aptitude test.
#interviewtips #resume #ibsgurgaon #ibstips
By Dr Reshmi Manna
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
2. 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
2
3. What is Accounting
Accounting is the process of identifying, measuring and
communicating economic information, to permit informed
judgments and decisions by a user of the information.
Accounting information is used both by external users as well
as internal users.
Financial Accounting involves identifying and recording
business transactions and summarizing them in rupee terms.
3
4. What is Accounting
Cost Accounting may be defined as “Accounting for costs
classification and analysis of expenditure as will enable the
total cost of any particular unit of production to be ascertained
with reasonable degree of accuracy and at the same time to
disclose exactly how such total cost is constituted”.
Management Accounting collects and provides accounting,
cost accounting, economic and statistical information to the
men at various managerial levels to assist them in the
performance of managerial functions and their evaluations.
4
6. Evolution of Accounting
15th Century - In the 15th century, Italian mathematician Luca
Pacioli first established the “language of business”, now considered
to be the spearhead of modern bookkeeping.
19th Century - The first accounting organization was established in
New York in 1887, which later became the American Institute of
Certified Public Accountants.
20th Century - The evolution of accounting was revolutionized with
computer technology, which meant bookkeeping no longer had to
be done with paper and pencil.
The Future of Accounting - Businesses now have the option of
using cloud-based accounting.
6
7. Basic Concepts of Financial
Accounting
Separate Entity – The accounts are kept for the business entity
which is distinct from the owner
Q. Ram Manohar & Sons is a proprietorship firm owned by Mr
Ram Manohar. During the year 2010, the firm bought goods
worth Rs.1,000,000 were consumed by Mr Ram Manohar for
personal purposes. The remaining goods were sold for Rs.
9,60,000. What is the profit or loss for the year?
7
8. Basic Concepts of Financial
Accounting
Accounting Period – is usually a period of 12 months.
Additionally, interim reports are prepared to meet the
requirement of users for more concurrent information.
Q. Hindustan Boiler Limited, an Indian subsidiary of a US
company, prepares its accounts using financial year as the
accounting period. The US parent company prepares its
accounts on calendar year basis. What kind of problem the US
company would face to present consolidated results?
8
9. Basic Concepts of Financial
Accounting
Money Measurement – makes it possible to aggregate different
types of assets, liabilities, revenues and expenses by
expressing them in a common unit of reporting
Q. After the death of the promoter of E-Sport Limited, there is
fierce battle between his two sons for succession. How will this
be reflected in the books of accounts of the company?
9
10. Basic Concepts of Financial
Accounting
Going Concern – requires a longer term view to be taken for
recording business transactions as if the business will continue
to operate for an indefinite period of time
Q. Healthcare Pharmaceutical Ltd has three plants located at
Delhi, Mumbai and Pune. The company has decided to shut
down the Pune plant and sell its assets either as a running unit
or in a piecemeal manner. What is the implication of such
decision in the books of accounts of the company?
10
11. Basic Concepts of Financial
Accounting
Cost Concept – lends objectivity to the financial statements as
a long-term asset will continue to be shown at its historical cost
irrespective of fluctuation in the market price. However a
permanent fall in value is recognized.
Q. Industrial Lab Limited bought a piece of land for Rs. 5
million in the year 1970. The company had used the land to set
up an industrial unit. The current market price of the land is Rs.
20 million. At what value of this asset should be shown in the
financial statements of the company?
11
12. Basic Concepts of Financial
Accounting
Conservatism – prefers accounting policies that understate
rather than overstate profits; ignore probable gains but account
for probable losses.
Q. Reliable Ltd sells goods on credit basis. On 31st March
2011, it has a total outstanding of Rs. 120 million from its
customers. The past experience shows that about 5% of the
customers invariably default. How do we account for this
anticipated loss?
12
13. Basic Concepts of Financial
Accounting
Materiality – provides for all information that is relevant to the
users but avoid unnecessary details
Q. In the P&L statement of Tee Ltd. about 60% of the
expenses have been clubbed under the heading
‘miscellaneous expenses’, whereas Cee Ltd has reported all
heads of expenses separately including about 100 different
types of expenses which together constitute only 10% of the
total expenses in rupee terms. What are your views?
13
14. Basic Concepts of Financial
Accounting
Consistency – facilitates inter-period comparison by requiring
that same accounting policies are followed period after period.
Change in accounting policies, if any, must be adequately
disclosed
Q. Red Swan Auto Ltd. is proposing to change its accounting
policy for the valuation of inventories, as the management feels
that it would lead to better estimation of cost of inventories.
Can they do so?
14
15. Basic Concepts of Financial
Accounting
Matching – concept for correct ascertainment of profits, expenses
incurred to earn revenue are matched against the revenue earned.
Both revenue and related expenses must be accounted for in the
same accounting period
Q. During the year 2010-11, Smart Trading Ltd bought goods worth
Rs. 1,350,000. It also had goods worth Rs. 200,000 bought during
the year 2009-10. At the end of 2010-11, goods costing Rs. 450,000
are still unsold. Remaining goods have been sold during the year
for Rs.1,400,0000. Ascertain the cost of goods sold during the year
2010-11 and profit or loss for the year.
15
16. Basic Concepts of Financial
Accounting
Accrual – Revenue are recorded when earned while expense are
recorded when incurred irrespective of when received or paid
Cash – Transactions are recorded on receipt and payment of cash
Q. ABC Diagnostic Ltd. has the practice of paying the monthly
salary on the 7th of next month. Accordingly, salary for the month of
March 2011 was paid on 7th April 2011. If the company follows cash
basis of accounting, when would the expenses be recognized?
What if the company follows accrual basis of accounting?
16
17. Basic Concepts of Financial
Accounting
Dual – Every transaction affects at least two accounts in such
a way that Assets = Capital + Liabilities
Q. Mr Ramesh Jha started a new business on 1st April 2011
contributing Rs. 1,000,000 in cash as capital. The firm bought
some furniture for Rs. 200,000 in cash and bought machinery
from XYZ Ltd for Rs. 700,000 on credit. How would these
transactions affect the transaction equation?
17
18. Basic Concepts of Financial
Accounting
Substance over Form – Accountants often face situations
where the real intent of a transaction is totally different from the
form in which the transaction is entered into.
Q. On 1st May 2011, Moneywise Bank sold some securities to
KM Bank for Rs. 100 million with an agreement to buy them
back at Rs. 101 million after a month. The securities were
delivered to KM Bank on 1st May 2011. On 1st June,
Moneywise Bank paid Rs. 101 million and bought back the
securities. How should the transactions be recorded in the
books of Moneywise Bank.
18
19. Stages of Preparing Accounting
Statements – Accounting Cycle
ANALYSIS
Trend Analysis,
Common Size,
Ratios Analysis
FINANCIAL
STATEMENTS
Profit & Loss
Statement,
Balance Sheet,
Cash Flow
Statement
THROUGHPUT
Recording,
Classification,
Balancing, Trial
Balance
INPUT
Vouchers or
Supporting
Documents
19
20. From Input to Output - Financial
Statements
The financial statement aim to answer three basic questions
about a business entity:
1. How much profit was earned by the business during a
particular time period? Statement of Profit and Loss
2. What are the assets and liabilities of the business at the end
of the period? Balance Sheet
3. What were the sources and uses of cash during a particular
period? Cash Flow Statement
20
21. Problem 1: Identify Relevant
Accounting Principle
Curewell Pharmaceutical Ltd is facing a law suit wherein it may
be liable to pay a fine of Rs. 10 million. The lawyer of the
company has advised that there is a high probability of the
company losing the law suit.
How should the company record this transaction in the books
of accounts? What accounting principle is involved?
21
22. Solution 1:
Curewell Pharmaceutical is advised to make appropriate
provision for the loss as there is a reasonable probability of
company losing the case.
It is based upon the principle of conservatism.
22
23. Problem 2: Identify Relevant
Accounting Principle
Shivam Limited borrowed a sum of Rs. 50 million from the SBI
on 1st August 2010 for a period of one year. The loan matured
on 30th July 2011 and was duly repaid on due date with interest
amounting to Rs. 5 million.
The company maintains its books on financial year basis.
In which accounting year the interest expenses should be
recorded? Why?
23
24. Solution 2:
The interest of Rs. 5 million is for a period of 12 months from
1st August 2010 to 30th July 2011. Interest accrues on a day-to-
day basis. Interest from 1st August 2010 to 31st March 2011
should be accounted for in the year 2010-11, whereas interest
for the period 1st April 2011 to 30th July will be treated as an
expense for the year 2011-12.
Accordingly, interest of Rs. 5 million will be split two-third: one-
third between the two accounting years.
24
25. Problem 3: Identify Relevant
Accounting Principle
Which of the following transactions are subject matter of accounting:
A. Purchase of 200 kg of goods by the firm on credit for Rs. 1,00,000
B. Resignation of one of the key salesman of the firm
C. A pharmaceutical company has filed application for patent of a new
drug
D. A construction company has won a major contract from the
government
E. A telecom company has paid Rs. 200 million as a security deposit to
the government
25
26. Solution 3:
A. Yes: Rs. 1,00,000 will be recorded as purchase but not the
quantity
B. No: Cannot be expressed in money terms
C. No: Filing an application cannot be expressed in terms of
money
D. No: Winning a contract cannot be expressed in monetary
terms
E. Yes: Amount of security deposit is an accounting transaction
26
27. Problem 4: Identify Relevant
Accounting Principle
Free Flow Oil Limited, an Indian company, set up an office in
Sri Lanka for executing a specific contract. Due to some
reasons, the Sri Lankan government put a ban on the company
to operate in the country.
How will it impact the valuation of assets of the Sri Lankan
operations of the company?
27
28. Solution 4:
As there is evidence to believe that the Sri Lankan Operation
of the company are no longer viable, these operations can no
longer be viewed as going concern.
Accordingly, valuation of assets of Sri Lankan operations
should reflect their realizable value.
28
29. Users of Financial Information
Suppliers of Capital
◦ Shareholders
◦ Leading Banks and Financial Institutions
◦ Bond Holders
◦ Other Lenders
Credit Rating Agencies
Tax Authorities
RBI, IRDA
Employees and Trade Unions
Academicians and Researchers
29
30. Generally Accepted Accounting
Principles - GAAP
Accounting is a management discipline and not an exact
science
Accounting principles and standards make financial statements
prepared by various entities comparable by reducing
management’s discretion in choice of accounting treatment.
The need for comparability led to the evolution of GAAP
Accounting Standards are mandatory requirements to be
followed while preparing financial statements
30
31. Conclusion
In this session we learnt about
◦ 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
31