1. COST ACCOUNTING &
FINANCIAL ACCOUNTING
PRESENTED BY
MANESH KUMAR AHUJA

2. FINANCIAL ACCOUNTING…
• Financial Accounting is defi ned as, ‘Art and science of classifying, analyzing and recording business
transactions in a systematic manner in order to prepare a summary at the end of the year to fi nd out
the results of the concerned accounting year

3. DEFINITION HOW DEFINE
• The definition given above is self explanatory, however for understanding clearly, the following terms
are explained below.

4. • A Business transactions :-
A transaction means an activity, a business transaction means any activity which creates
some kind of legal relationship. For example, purchase and sale of goods, appointing an employee and paying his
salary, payment of various expenses, purchase of assets etc.
B Classification of transactions :-
Before recording any transaction, it is essential that it is to be classified. A transaction can be
classified as cash transaction and credit transaction. Similarly transactions of receiving income and payment of
expenditure can be segregated. Even in case of expenditure, transactions involving revenue expenditure and
capital expenditure can be segregated.

5. C Recording of transactions :-
The essence of fi nancial accounting is recording of transaction. In accounting language,
recording of the transaction is known as entry. There are well defi ned rules for recording various
transactions in books of accounts. As per the rules of fi nancial accounting, each and every transaction is
recorded at two places and hence it is called as ‘Double Entry’ system of accounting.

6. THANK YOU