By Siddhartha Kamat

ACCOUNTING is the recording, reporting, and analysis of financial transactions of a business. In education "accounting" is learning the rules and regulations and how to perform accounting task, such as filling out the Balance Sheet, record transactions, post transactions, analyse, etc. In simple it is learning the accounting cycle, and how to record & maintain accounting documents. It is the business language and it has three aspects 1)Input 2)Process 3)Output

There are three ingredients of corporate and these are 1)PEOPLE 2)SYSTEM 3)CAPITAL All these three ingredients rotates around the business/project. As the law construction industry comes within the ambit of service sector but from the accounting it still comes under the category of manufacturing sector because construction industry is also engaged in changing the shape of raw material and convert them into finished product. At construction industry most of the work performed at project site, so the whole economic activities in construction industry can be categorized in to the following: 1)Procurement of resources 2)Mobilization of all resources 3)Managing all the resources at the site 4)Demobilization of resources after completion of the work.

Branches of accounting 1)Financial accounting 2)Cost accounting 3)Management accounting 4)Financial management Financial Accounting is the process of summarizing financial data taken from an organization's accounting records and publishing in the form of annual (or more frequent) reports for the benefit of people outside the organization.

“Accounting as a Business Language”

There is an old saying in business that “you cannot manage what you cannot measure.”
The same goes for an accounting system. Without an accounting system, you may never know if your business is really making a profit or loss; You won't be able to predict cash flow shortages; and worst of all you cannot accurately keep track of those slow paying customers, or those who are not paying at all.

Benefits of Accounting
• Accounting replaces human memory • Accounting helps in knowing profit • Accounting helps in knowing financial position of organisation • Accounting helps in knowing list of creditors and debtors • Accounting helps to analyse cost of various items of work and classes of work • Accounting helps in raising more funds by supplying information to investors and creditors • Accounting helps to facilitate efficient control of transactions in large work • Accounting helps in planning for expansion • Minimize problems with IRS & other tax authorities

Balance Sheets
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. Statement of financial position of an organization

Cash , inventory, property ,produced goods etc. on the asset side
Accounts payable ,long term debt etc. on the liability side

 Balance sheet is always dated.

 Assets=Liabilities + Capital , for every transaction
 Different asset categories are listed in order of their liquidity.
XYZ Company Balance Sheet July 18,2011 Assets Cash- 5,00,000/Liabilities &Capital Liability 4,00,000/-

Capital(Owner’s equity) 1,00,000/Total assets 5,00,000/Total Liabilities & Capital 5,00,000/-

Assets
Resources acquired by the Business firm from the fund made available.

Current Assets
cash

: consists of cash & others which get converted into

during operating cycle time of firm

i.e. cash, bank balance, raw material, work in progress

Fixed Assets

: acquired for relatively long periods for carrying on the

business & not meant for resale.

Tangible
fixtures.

Assets

i.e. land, building, plant, machineries, furniture &

Intangible Assets i.e. goodwill, patience, trademark, copyright

Equity
Amounts that Business Enterprises owes to persons or bodies

Two ways Capitals : Amount representing claims of owners Liability : Amount representing claims of outsiders e.g. lenders, investors Short term liability: bills payable, outstanding expenses, short term loans Long term liability : capital, long term loans.

Secured and Unsecured Liabilities.
Conclusion

Assets = Equities (claims) = Owner’s equity + Outsider’s equity = Capitals + Liability

Trial Balance
Meaning: Contains various ledger balances on a particular date. Objective: Purpose is to check the arithmetical accuracy of the book of accounts. Items Covered: Contains all items relating to incomes, expenses, assets and liabilities

Balance sheet
It is the statement of the various assets and liabilities. To ascertain the financial position of the company.

It incorporates only the assets and liabilities.

Preparation: Prepared first, preparation of the trial balance is independent of preparation of the balance sheet.

It’s prepared on the basis of the trial balance and some other additional information that might not have been included in the trial balance.
It is prepared both for internal as well as external use.

Use: Meant only for internal use.

Thank You

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