PRESENTED BY TITTY BENJAMIN SHERRY RITHA ANTONY

ACCOUNTING
MEANING OF ACCOUNTING
DEFINITION OF ACCOUNTING ACCORDING TO

AICPA

OBJECTIVES
MAINTENANCE OF RECORDS OF BUSINESS
CALCULATION OF PROFIT OR LOSS DEPICTION OF FINANCIAL POSITION

MAKING INFORMATION AVAILABLE TO VARIOUS

GROUPS

WHERE DO WE NEED ACCOUNTING?

External users of Accounting Information
1. 2.

3.
4. 5. 6.

INVESTORS CREDITORS GOVERNMENT CONSUMERS RESEARCH SCHOLARS NON PROFIT ORGANISATION

CTD.
Internal users of Accounting Information

OWNERS 2. MANAGEMENT 3. EMPLOYEES

1.

SOME BASIC TERMS

1) ASSETS a) FIXED ASSETS b) CURRENT ASSETS/FLOATING ASSETS/CIRCULATING

ASSETS c) FICTITIOUS ASSETS d) INTANGIBLE ASSETS e) DEPRECIATING ASSETS

2) a) b) c)

LIABILITIES SHORT TERM/CURRENT LIABILITIES LONG TERM LOABILITIES CONTIGENT LIABILITIES

CTD
3) CAPITAL
4) REVENUES 5) EXPENSES a) CAPITAL EXPENDITURE b) REVENUE EXPENDITURE c) DEFERRED REVENUE EXPENDITURE

6) PURCHASES
7) SALES 8) STOCK

9) DEBTORS
10) CREDITORS 11) DRAWINGS 12) BUSINESS TRANSACTIONS

THEORY BASE OF ACCOUNTING

GAAP-Generally Accepted Accounting Principle GAAP are common set of accounting
principles, standards and procedures that companies use while preparing their financial accounts.

GAAP helps to set a common standard to

the accounting process.

ACCOUNTING PRINCIPLES??
ACCOUNTING CONCEPTS ACCOUNTING PRINCIPLES ACCOUNTING CONVENTIONS

ACCOUNTING CONCEPTS
CONSIDERED AS POSTULATES NO AUTHORITIVE LIST OF CONCEPTS MAINLY HELPS WHILE MAINTAINING ACCOUNTS

ACCOUNTING CONCEPTS
i. BUSINESS ENTITY ii. MONEY MEASUREMENT iii. GOING CONCERN iv. EXPENSE OR COST v. DUAL ASPECT vi. ACCOUNTING PERIOD vii. MATCHING viii. REALISATION ix. OBJECTIVE EVIDENCE x. ACCRUAL

ACCOUNTING CONVENTIONS
Circumstances or traditions which guide the

accountants while preparing the accounting statements.

Used while preparing financial statements

ACCOUNTING CONVENTIONS
CONSISTENCY ii. FULL DISCLOSURE iii. CONSERVATISM iv. MATERIALITY
i.

ORIGIN AND RECORDING OF TRNSACTION

ACCOUNTING EQUATION

ASSETS=EQUITIES
ASSETS=CAPITAL+LIABILITY

ASSETS+EXP & LOSSES=LIAB+INCOMES AND GAINS

ACCOUNTS
AN ACCOUNT IS DEFINED AS A FORMAL RECORD OF ALL TRANSACTIONS RELATING TO CHANGES IN A PARTICULAR ITEM
UNDER THE ENGLISH APPROACH, ACCOUNTS ARE: a)PERSONAL ACCOUNT b)REAL ACCOUNT c)NOMINAL ACCOUNT

PERSONAL ACCOUNTS
DEBIT THE RECIEVER CREDIT THE GIVER EXAMPLE #RAM PAID RAJU RS 10000

#DEVIKA RECEIVED RS 5000 FROM MALAVIKA

REAL ACCOUNTS
DEBIT WHAT COMES IN CREDIT WHAT GOES OUT EXAMPLE #FURNITURE WORTH RS 25000 BOUGHT FOR CASH #MACHINERY WORTH RS 40000 SOLD FOR CASH

NOMINAL ACCOUNTS
DEBIT ALL EXPENSES AND LOSES CREDIT ALL INCOMES AND GAINS EXAMPLE #SALARY RS 5000 PAID #RENT RS 2500 RECIEVED

QUESTION HOUR!!!!!

FIRE YOUR QUESTIONS!!!!!!!