Accounting

Fundamentals
 Course Learning Outcomes

• On successful completion of the course you should be able to:

• Explain accounting process, concepts, principles & conventions

• Estimate individual items of financial statements
• Summarize financial statements
• Apply ratio analysis on financial statements
• Identify ethical issues in accounting
Book Keeping is an art of recording the financial transactions in

a simple manner.

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 atleast , of financial character and

interpreting the results thereof.

 Objectives of Accountancy

Recording monetary transactions.

Ascertaining the earnings of a company.
Ascertaining the financial status of a company.
Meeting the statutory requirements.
Helping in taking financial decisions.
Helping outsiders to know the functioning and financial
soundness of the company.
 THE ACCOUNTING PROCESS

Identifying of Transactions

Recording in Journals

Classifying : Posting in Ledgers

Summarizing : Preparing Final Accounts

Interpretation & Analysis

 PROCESSING
INPUTS
 Accounting Principles
 Business Transactions (e.g.
purchases sales, receipts and  Accounting Standards
payments etc.)
 Management Estimates
 External events (e.g. fire,
 Laws and Regulations (e.g.
changes in tax laws etc.)
Companies Act and Income Tax Act)
 Transaction Processing Conventions
 Accounting Records
USERS
 Shareholders
 Managers
OUTPUT
 Suppliers
 Profit and Loss Account
 Creditors
 Balance Sheet
 Employees
 Cash Flow Statement
 Government
 Explanatory Notes
 Regulators
 Management Commentary
 Investors
 Special Reports and Analysis
 Security Analysts
 Tax Returns
 Rating Agencies
 Regulatory Filings
 Academicians &
Researchers
 USERS OF FINANCIAL STATEMENTS

Internal Users External Users

Management Others
Group Shareholders
BOD
Employees
Partners
Managers
Financing Group Public Group

Investors Govt. Agencies

Creditors Academicians
Suppliers Researchers
 CLASSIFICATION OF ACCOUNTING

Accounting

Financial Cost Management

Accounting Accounting Accounting
Thank You