The document outlines the principles of accounting taught at the Trinity Institute of Professional Studies, emphasizing financial accounting as a process for identifying, recording, summarizing, and reporting economic information. The course aims to familiarize students with essential accounting principles and their application in various sectors, aiding decision-making for stakeholders such as managers, investors, and creditors. Key concepts include the balance sheet structure, transaction analysis, and the importance of maintaining accurate financial records.

1. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated Institution of G.G.S.IP.U,
Delhi
Paper Id: 20207
Paper Code: BCA207
Principles of accounting

2. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Financial Accounting
The Language
of Business

3. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Combination of two words……
Financial + Accounting
 Combination of two words……
Financial + Accounting
 Accounting
A process of identifying, recording, summarizing,
and reporting economic information to decision
makers in the form of financial statement

4. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Financial Accounting
Financial accounting gathers and summarizes financial
data to prepare financial reports such as balance sheet
and income statement for the organization's
management, investors, lenders, suppliers, tax
authorities, and other stakeholders

5. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Objective
The primary objective of the course is to familiarize the
students with the basic accounting principles and
techniques of preparing and presenting the accounts for
user of accounting information.

6. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Scope of Subject
1) Accounting has a wide scope in all sphere of society and in all
professions.
2) In social or professional activities the financial transactions may
take place. so the need of recording and summarising these
transactions may arises to find the net result

7. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Cont………….
3) In todays world the accounting is practiced not
only in financial institutions but also in many non-
trading institutes like schools, hospital, charitable
trust, etc. As a matter of fact it is used by all who
are involved in financial transactions.
4) In recent time the application of accounting
policies and principles emerged , like in National
Accounting, Human resource Accounting, and
Social Accounting.

8. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Accounting as an Aid to
Decision Making
 Accounting information is useful to anyone
who makes decisions that have economic
results.
• Managers want to know if a new product will be profitable.
• Owners want to know which employees are productive.
• Investors want to know if a company is a good investment.
• Creditors want to know if they should extend credit, how much
to extend, and for how long.
• Government regulators want to know if financial statements
conform to requirements.

9. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Accounting as an Aid to
Decision Making
 Fundamental relationships in the decision-making
process:
Event
Accountant’s
analysis &
recording
Accountant
’s
analysis &
recording
Accountant’s
analysis &
recording
Accountant’s
analysis &
recording
Financial
Statements
Users

10. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
ACCOUNTING PRINCIPLES
ACCOUNTING
CONCEPTS
ACCOUNTING
CONVENTIONS
Assumptions
or Conditions
Customs and
Traditions

11. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
 ACCOUNTING CONCEPT
BUSINES
S ENTITY
GOING
CONCERN
MONEY
MEASUREMEN
T
PERIODICITY ACCRUAL

12. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
ACCOUNTING CONVENTIONS
 Conservatis
m
FULL
DISCLOSU
RE
MATERIALIT
Y

13. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
The Balance Sheet
The balance sheet equation:
Assets = Liabilities + Owners’ Equity
or
Owners’ Equity = Assets - Liabilities

14. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
The Balance Sheet
 What are the different sections of the Balance
Sheet?

15. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Sections of the balance sheet:
 Assets - resources of the firm that are expected to increase
or cause future cash flows (everything the firm owns)
 Liabilities - obligations of the firm to outsiders or claims
against its assets by outsiders (debts of the firm)
 Owners’ Equity - the residual interest in, or remaining
claims against, the firm’s assets after deducting liabilities
(rights of the owners)

16. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Balance Sheet Transactions
 The balance sheet is affected by every
transaction that an entity encounters.
 Each transaction has counterbalancing entries
that keep total assets equal to total liabilities and
owners’ equity, i.e., the balance sheet equation
must always be balanced.

17. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Transaction Analysis
 For each transaction, the accountant must
determine:
 which specific accounts are affected
 whether the account balances are increased or
decreased
 the amount of the change
in each account

18. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
For example
 The business receives capital in cash of Rs.
1,00,000.
Two accounts are effected by the above
transaction
capital cash
─ Capital is a liability
─ Cash is an asset to the business
Assets = Liabilities + Capital
1,00,000 = 0 + 1,00,000

19. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Journal
 All transactions are originally recorded or
entered in a journal (hence book of original
entry).
 Journal:
 Contains accounts and amounts to be debited and
credited.
 Device for reclassifying and summarizing.
 Amounts are transferred or posted from the
journal to the ledger (i.e. T account).

20. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Journal or Accounting Rules
Personal rule
-Debit the
receiver
-Credit the
giver
Real rule
-Debit what
comes in
-credit what
goes out
Nominal rule
-Debit all
expenses &
losses
-Credit all
incomes &
gains

21. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75