This document provides an overview of managerial accounting basics, including: - Definitions of accounting as collecting, summarizing, analyzing, and reporting financial information about business transactions. - An overview of the history of accounting tracing back thousands of years, and how the modern system originated in 1494 in Italy. - Descriptions of the different types of accounts used in accounting like personal, real, and nominal accounts. - The accounting cycle and key financial statements including the trial balance, trading account, profit and loss statement, and balance sheet. - The uses of accounting information for business owners and outsiders.

1. MANAGERIAL ACCOUNTING
BASICS OF ACCOUNTING
NAME: SHEEL CHARIYA
PRESENTED TO :- CDR. GIRISH PAWAR
JS KOTHARI BUSINESS SCHOOL

2. CONTENT
❑ WHAT IS ACCOUNT?
❑ MEANING & DEFINITIONS/OBJECTIVES
❑ HISTORY OF ACCOUNTING
❑ TYPES OF ACCOUNTING
❑ GOLDEN RULES OF ACCOUNTING
❑ ACCOUNTING CYCLE
❑ USES OF ACCOUNT (TO BUSINESSMEN & OUTSIDERS)

3. WHAT IS ACCOUNT?

4. MEANING &
DEFINITIONS/OBJECTIV
ES
❑ PROF. ROBERT N. ANTHONY HAS DEFINED ACCOUNTING AS
“NEARLY EVERY BUSINESS ENTERPRISE HAS AN ACCOUNTING
SYSTEM. IT IS A MEANS OF COLLECTING, SUMMARIZING, ANALYSING
AND REPORTING IN MONETARY TERMS INFORMATION ABOUT THE
BUSINESS TRANSACTIONS.
❑ TO KEEP SYSTEMATIC RECORDS
❑ TO PROTECT BUSINESS PROPERTIES
❑ ASCERTAIN PROFIT
❑ ASCERTAIN THE FINANCIAL POSITION
❑ INFORMATION SYSTEM

5. HISTORY OF ACCOUNTING
❑ ACCOUNTING'S HISTORY CAN BE TRACED BACK THOUSANDS OF YEARS TO THE CRADLE OF
CIVILISATION IN MESOPOTAMIA AND IS SAID TO HAVE DEVELOPED ALONGSIDE WRITING, COUNTING
AND MONEY. THE EARLY EGYPTIANS AND BABYLONIANS CREATED AUDITING SYSTEMS, WHILE THE
ROMANS COLLATED DETAILED FINANCIAL INFORMATION.
❑ THIS SYSTEM OWES ITS ORIGIN TO ITALIAN MERCHANT “LUCA D. BARGO PACIOLI’’ ON 10TH NOVEMBER
1494 AND THIS DAY IS CELEBRATED AS INTERNATIONAL ACCOUNTING DAY.

6. TYPES OF ACCOUNTING
PERSONAL ACCOUNT
❑ RAJESH’S A/C
❑ BANK OF MAHARASHTRA A/C
❑ OUTSTANDING RENT A/C
❑ CAPITAL A/C
❑ OUTSTANDING SALARY A/C
❑ PREPAID INSURANCE A/C
❑ LOAN A/C
❑ DRAWINGS A/C
❑ ACCRUED INCOME/OUTSTANDING INCOME
REAL ACCOUNT
❑ MACHINERY A/C
❑ MOTOR CAR A/C
❑ GOODWILL A/C
❑ PATENTS A/C
❑ TRADEMARK A/C
❑ COPYRIGHT A/C
❑ BUILDING A/C
❑ LAPTOP A/C
❑ CASH A/C
NOMINAL ACCOUNT
❑ STATIONERY A/C
❑ SALARY A/C
❑ COMMISSION RECEIVED A/C
❑ INTEREST A/C
❑ REPAIRS A/C
❑ LOSS BY FIRE A/C
❑ LEGAL EXPENSES A/C
❑ GST A/C
❑ DISCOUNT A/C

7. GOLDEN RULES OF ACCOUNTING
Golden Rules
Personal Account
❑ Debit the Receiver
❑ Credit the giver
sReal Account
❑ Debit what comes in
❑ Credit what goes out
Nominal Account
❑ Debit all expenses and losses
❑ Credit all income and gains

8. ACCOUNTING CYCLE

9. PRINCIPLE OF ACCOUNTING

10. TRIAL BALANCE AS ON….
PARTICULARS L.F. DEBIT BALANCE CREDIT BALANCE
CAPITAL XXX
LAND AND BUILDING XXX
PLANT AND MACHINERY XXX
EQUIPMENT XXX
FURNITURE XXX
CASH IN HAND XXX
CASH AT BANK XXX
DEBTORS XXX
BILLS RECIEVABLE XXX
PURCHASES XXXX
SALES XXXX
SALES RETURN XXX
PURCHASE RETURN XXX
INTEREST PAID XXX
SALARIES XXX
LONG TERM LOAN XXX
BILLS PAYABLE XXX
CREDITORS XXX
DRAWINGS XXX
TOTAL XXXX XXXX

11. TRADING ACCOUNT FOR THE YEAR ENDED…
PARTICULARS AMOUNT AMOUNT PARTICULARS AMOUNT AMOUNT
TO OPENING STOCK XXXX BY SALES XXXXX
TO PURCHASES XXXX LESS : SALES RETURN (RETURN
INWARD)
XXX XXXXX
LESS : PURCHASE RETURN
(RETURN OUTWARDS)
XXX XXXX BY GOODS DISTRIBUTED AS
FREE SAMPLES
XXX
TO DIRECT EXPENSES XXX BY GOODS TAKEN BY
PROPRIETOR FOR PERSONAL
USE
XXX
TO FREIGHT & CARRIAGE
INWARD
XXX BY CLOSING STOCK XXXX
TO CUSTOM DUTY XXX BY GROSS LOSS C/D XXXX
TO WAGES XXXX
TO COAL, GAS, FUEL XXX
TO ROYALTIES XXX
TO FACTORY EXPENSES XXX
TO GROSS PROFIT C/D XXXX
XXXXX XXXXX

12. PROFIT &LOSS ACCOUNT FOR THE YEAR ENDED..
PARTICULARS AMOUNT AMOUNT PARTICULARS AMOUNT AMOUNT
TO GROSS LOSS B/D (IF ANY) XXX BY GROSS PROFIT B/D (IF
ANY)
XXX
TO SALARIES XXXX BY RENT RECEIVED XXX
TO SALARIES & WAGES XXX BY INTEREST ON
INVESTMENT
XXX
TO RENT RATE AND TAXES XXX BY INTEREST ON DEPOSITS XXX
TO INURANCE XXX BY MISC. INCOME XXX
TO BANK CHARGES XXX BY DISCOUNT RECEIVED XXX
TO DISCOUNT XXX
TO AUDIT FEES XXX BY NET LOSS XXX
TO DEPRICIATION ON
LAND AND BUILDING XXX
PLANT AND MACHINERY XXX
FURNITURE ETC. XXX XXXX
TO TRAVELLING EXPS XXX
TO ADVERTISEMENT XXX
TO PRINTING AND STATIONERY XXX
TO INTEREST XXX
TO LOSS BY FIRE XXX
TO LOSS BY THEFT XXX
TO PACKING EXPS XXX
TO COMMISION XXX
TO BAD DEBTS (OLD) XXXX
ADD : NEW BAD DEBTS XXX
ADD : NEW RDD XXX
XXXX
LESS : OLD RDD XXX XXXX
TO NET PROFIT XXXX
XXXX XXXX

13. BALANCESHEET FOR THE YEAR
ENDED…
LIABILITIES AMOUNT AMOUNT ASSETS AMOUNT AMOUNT
CAPITAL XXXX CASH IN HAND XXXX
ADD : NET PROFIT XXXX CASH AT BANK XXXX
ADD : INTEREST ON
CAPITAL
XXX BILLS RECEIVABLE XXX
XXXX SUNDRY DEBTORS XXXX
LESS : DRAWINGS XXX GOODWILL XXX
LESS : INTEREST ON
DRAWINGS
XXX FURNITURE XXX
LESS : NET LOSS XXX XXXX PLANT AND
MACHINERY
XXXX
LAND AND BUILDING XXXX
BANK LOAN XXXX PREPAID EXPS XXX
BANK OVERDRAFT XXX OUTSTANDING
INCOME
XXX
SUNDRY CREDITORS XXX CLOSING STOCK XXX
BILLS PAYABLE XXX
OUTSTANDING EXPS XXX
PRE RECEIVED
INCOME
XXX
XXXXX XXXXX

14. THANK YOU