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The boy dialed a number and said “Good morning madam. I want to offer my services to mow your lawn.” The lady replied “I am sorry. But I already have someone who does this for me”
The boy said. “ Madam, I can mow lawns better than anybody else in this whole village. Please give me a chance to mow your lawns”
The lady patiently replied, “No son. Thank you. I am happy with the boy who mows my lawn”
The boy still insisted, “ Madam I will charge you half of the price you are currently paying” The lady replied “I am really sorry son; but I am very happy with the boy who mows my lawn and I do not want to change”
The boy put down the phone with a sweet satisfied smile.
The shopkeeper was perplexed seeing him smile and thought that he was putting on a brave face. He felt sorry for the young boy and offered him a job at the shop.
But the boy smiled and said, “No. Thank you. I already have a job.”
I was checking on myself! That was my employer I was calling! MEASURING HIS PERFORMANCE
What does the word “measure” bring to your mind The dictionary meaning of “Measure” is to find out the size. amount or degree of something by comparing it with a standard. you cannot control! . its an indication of the extent or quality of something. What you cannot measure . its like a rank that you give a performance When you want to check performance you measure.
What are the things that you normally measure How much marks has he got as compared to me How much pocket money is left? How are you going to manage this month? For a business man…….. What is the profit this month? Can I invest in another machine in my factory? Will the bank give me a loan? The basis of comparing and understanding a business is by understanding accounting .
FINANCIAL ACCOUNTING .
The term “financial accounting” brings to mind Money Figures Control Income Expenses Reports Accounts .
Genesis of Accounting Accounting is an ancient art. an Italian in the 15th century . as old as money itself though in a very rudimentary form Chanakya in his book ARTHSHASTRA mentions the need for proper audit and accounting! The modern system of accounting however owes its origin to Pacioli.
REQUIREMENTS Hard work Commitment to learning Attendance & Punctuality Cheerful disposition .
transactions and events which are of financial nature and interpreting the results thereof. Accounting is the language of business According to AICPA. classifying and summarizing in a significant manner and in terms of money. This accounting process continues as financial statements and reports that are provided to users. measuring and communicating economic information to enable decision making.What is accounting Accounting is defined as the process of identifying. Accounting is the art of recording. .
So.What is the need for “financial accounting”? A business man would be interested in knowing whether he has earned a profit or loss in business He would also like to know periodically the status or position of his business The important functions of management. planning & controlling cannot be executed without correct and timely information. what’s the relationship between Accounting and information? . decision making.
2000 on 30th November He pays for water Rs. 15. 1.600 for electricity on 30th November What is the profit as on 30th November What is the value of his business on 30th November .Solve this? Mr. 1900 and buys office stationery for Rs.000 in cash on 20th November He purchase 1000 pens for Rs. 25. Jyoti & Company with a cash investment of Rs.000 on 15th November He buys office building space for Rs. 1000 on 22nd November He pays salary to staff of Rs.00.500 and Rs.000 and furniture of Rs. 50. A starts a Company called M/s. 10.000 on 25th November and sells the pens for Rs.000 on 29th November He pays for advertising expenses Rs.
Volume and complexities of business calls for a foolproof and sophisticated system which can provide the required information The purpose of accounting is to provide all required information on financial transactions by maintaining certain records. books of account and preparing certain statements. ie. Measure it.Need for “financial accounting”…contd. you can manage it! . Once you record events. Accounting is the basis of recording the events that happen in day to day business.
Accounting Cycle Recording of financial transactions Classifying is required to get information on different transactions individually which is not available in the original book of entry where it is recorded. it is used to make summaries in the form of Income Statement & Balance Sheet. ie. The book of account used for classification is called is called “Ledger” Summarizing . Financial result and financial position .Once classified information is available in the ledger.
It deals with past events. . It involves basic accounting processes of recording.Branches of Accounting The three branches of accounting are: Financial Accounting Cost Accounting Management Accounting Financial Accounting – refers to accounting for revenues. assets & liabilities. expenses. classifying and summarizing transactions.
Management Accounting refers to providing information to various management levels as a basis for management decisions. records and controls systems .contd Cost Accounting refers to recording classifying allocating and reporting current and prospective costs.Branches & Systems of Accounting…. Auditing refers to reviewing and evaluating documents . The main purpose is to help control operations.
. There is no place for credit transactions under this system of accounting. This is followed by business organizations. colleges etc. Accrual basis – A financial transaction is recorded in the books of account without considering whether it has been settled in cash or not.Systems of Accounting The two systems of accounting are: Cash basis Accrual basis Cash basis – A financial transaction is recorded in the books of account only when it is settled in cash. This is mostly followed by non profit service organizations like schools.
Forms of business organization Sole Proprietorship . provided by the public (shareholders) capital . Capital is brought in by the partners based on an agreement Corporations or Companies Largest form of business organization.one person owns the business Partnership firms – business run by 2 or more persons.
Users of financial reports Shareholders Board of Directors Government Employees Creditors Bankers .
cost & management accounting Systems of accounting Cash system & Accrual system Forms of business organization Sole Proprietorship. Partnership & Company . classifying & summarizing transactions Branches of accounting Financial.Recap What is accounting & accounting cycle? Recording.
Recap The three branches of accounting are: Financial Accounting Cost Accounting Management Accounting The two systems of accounting are: Cash basis Accrual basis .
Accounting Concepts & Standards Accounting is the language of business and it is used to communicate financial information. accounting is based on 11 fundamental concepts. These fundamental concepts form the basis for all of the Generally Accepted Accounting Principles (GAAP). . People who rely on financial information have a right to be assured that the data are free from bias and inconsistency. In order for that information to make sense. whether deliberate or not.
Eleven GAAP Accounting Period Concept Money-Measurement Cost Concept Matching Principle Going Concern .
Eleven GAAP Business Entity Concept Realization Concept Conservatism Materiality Concept Consistency Dual Aspect Concept .
Role of Financial Accounting in business This can be best understood by understanding the role of the finance department in an organization To ensure efficient management of cash flow maintenance of accurate accounts making and reviewing policies & procedures. control income and expenses guide all departments by providing accurate and timely information for decision making in order to maximize profitability .
Recap What is accounting & need for the same Accounting cycle Branches of accounting Systems of accounting Forms of business organization Users of financial reports Role of finance dept in an organization 11 GAAP .
` Thank you! ` .
We invite you to join the funeral in the room that has been prepared in the gym'. but after a while they started getting curious.Thought for the Semester One day all the employees reached the office and they saw a big notice on the door on which it was written: 'Yesterday the person who has been hindering your growth in this company passed away. In the beginning. they were all sad about the death of one of their colleagues. .
Everyone thought: 'Who is this guy who was hindering my progress? Well.They wanted to know who was that man who hindered their growth of his colleagues and the company itself. The excitement in the gym was such that security agents were ordered to control the crowd within the room. at least he died!' . the more the excitement heated up. The more people reached the coffin.
Because. there was a mirror inside the coffin: everyone who looked inside it could see himself. They stood nearby the coffin. shocked and in silence. they suddenly became speechless. as if someone had touched the deepest part of their soul.One by one the employees got closer to the coffin. There was also a sign next to the mirror that said: . When they looked inside it.
You are the ONLY person who can help YOURSELF. You are the ONLY person who can revolutionize your life influence your happiness and your success. .'There is only one person. who is capable to set limits to your growth: IT IS YOU.
Examine yourself. Don't be afraid of difficulties. Build Yourself and SUCCESS will be yours. . Work hard.. when you realize that you are the ONLY one responsible for your life. when you go beyond your limited beliefs. Watch yourself. Be a WINNER. Your life changes when YOU change.LEARNINGS…. impossibilities and losses.
` Thank you! ` .
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