ACCOUNTNG

Accounting is the system that measures business activities, processes information into reports, and communicates these findings to decision makers

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ACCOUNTING FOR MANAGERS

ACCOUNTING
Financial statements are documents that report on an individuals and/or an organizations business in monetary amounts Bookkeeping is the procedural element of accounting.

PROF. GIRISH JAIN

ACCOUNTING FOR MANAGERS

ACCOUNTING

Accounting is the art of recording classifying and summarizing in a significant manner and in terms of money, transactions and events which are in part at least of a financial character and interpreting the results thereof

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ACCOUNTING FOR MANAGERS

ADVANTAGES

Assistance in Management Replacement of Memory Comparative Study Settlement of Tax Liability Evidence in Court Sale of Business

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ACCOUNTING FOR MANAGERS

USERS
Business managers Investors Creditors Employees Government regulatory agencies Taxing authorities Other users

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Types of Business Organizations

Proprietorships Partnerships Corporations

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ACCOUNTING FOR MANAGERS

Proprietorships
Total undivided authority No restrictions on type of business must be legal Unlimited liability Limitation on size fund raising power

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ACCOUNTING FOR MANAGERS

Partnerships
Better credit standing possibly More brain power, but consultation with partners required Unlimited personal liability for partners Need for written partnership agreement

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ACCOUNTING FOR MANAGERS

Corporations
Separate legal existence Limited liability of stockholders Transferability of ownership relatively easy Taxes possible double taxation Extensive governmental regulation

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ACCOUNTING FOR MANAGERS

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Entity concept Dual aspect concept Accounting period concept Money measurement concept Cost principle

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ACCOUNTING FOR MANAGERS

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Going Concern Concept Accrual Concept Realisation Concept Stable-Monetary-unit Concept

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ACCOUNTING FOR MANAGERS

The Accounting Process

Transaction / Event Preparation of Vouchers Recording in the Primary Books Posting in the Secondary Books Preparation of Trial balance Preparation and Presentation of Financial Statements

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The Accounting Equation

Assets

Liabilities + Owners Equity

Economic Resources

Claims to Economic Resources

ACCOUNTING FOR MANAGERS

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Assets

It is something a business owns which has future economic value. land building equipment goodwill

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ACCOUNTING FOR MANAGERS

Liability

It is something a company owes. money service product

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ACCOUNTING FOR MANAGERS

Owners Equity

It is whats left of the assets after liabilities have been deducted. the same as net assets the owners claim on the entitys assets

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ACCOUNTING FOR MANAGERS

Transactions that Affect Owners Equity

OWNERS EQUITY INCREASES OWNERS EQUITY DECREASES Owner Withdrawals from the Business Owners Equity

Owner Investments in the Business

Revenues
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Expenses

Revenues

They are amounts received or to be received from customers for sales of products or services. sales performance of services rent interest
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Expenses

They are amounts that have been paid or will be paid later for costs that have been incurred to earn revenue. salaries and wages utilities supplies used advertising
ACCOUNTING FOR MANAGERS

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