ABC Of Accounting

Dr. Ashwani Varshney

Unit I
Lecture 1-2
Book keeping is that branch of Knowledge
which tells us how to keep a record of
financial transactions.
Book keeping is an art of identifying
,classifying and recording the monetary
transactions in the book of accounts.
Accounting starts where Book keeping
ends.

B00k keeping
Definition
Learning Objectives
Describe the need for accounting
Perceive the development of accounting Vs Book
keeping
Explain the meaning of accounting
Name the persons interested in accounting
disclosures
Identify the objectives of accounting
Describe the role of accountant in the society

3
Accounting is the process of identifying,
measuring, and communicating economic
information to permit informed judgments
and decisions by users of the information.
Accounting is defined as the art of
identifying,recording,Classifying,analysing
,summarising and interpreting the
monetary transactions in the books of
accounts.

Accounting:
Definition
Recording (Journal)
Classifying (Ledger)
Summarizing (Trial Balance, Income
statement and Balance sheet)
Dealing with Financial Transactions.
Analyzing and interpreting. (Ratio, Cash
flow, fund flow and other analysis)
Communicating (Accounting Reports)

Accounting: Functions
Acconting Cycle
To keep systematic record.

To ascertain the profit or loss.

To ascertain the Financial position of the

Business.

To provide information to various parties.

To Facilitate Decision making.

Accounting: why to study

Proprietors
Managers
Creditors
ProspectiveInvestors
Government
Employees
Public
Regulatory Agencies
Researchers

End Users of Accounting

Information
Assets
Capital
Liabilities
Drawings
Expenses
Revenue
Loss
Purchase
Sales
Debtors

Terminology
Creditors
Accounting year
Stock
Proprietor
voucher

Terminology
 Scanning The Annual Report

Try and Find out the following questions from

the annual report of Hindustan Unilever Ltd.
(www.hul.co.in)

Q1 : What is HUL’s business ? Who are the major suppliers and

customers ?
Q2 : Read the “Contents” page . Mark the items that relate to
Financial Statement as “FS” and the rest as “NFS”
Q3 : List HUL’s Assets ,liability and equity shares

Activity 1
Financial Accounting
Cost Accounting
Management Accounting
Human Resource Accounting
Inflation Accounting
Social Responsibility Accounting

Branches of Accounting
1. A person who owes money to the firm is called:
 (a) Creditor (b) Debtor (c) None of these
2. A person to whom money is owed by the firm is called:
 (a) Creditor (b) Debtor (c) None of these
3. Land and building is:
 (a) Fixed asset (b) Current asset (c) None of these
4. Goodwill is:
 (a) Tangible asset (b) Fictitious asset (c) None of these
5. Purchase of building is:
 (a) Capital expenditure (b) Revenue expenditure (c) None of these
6. Salaries paid is:
 (a) Expense (b) Expenditure (c) None of these
7. Debentures are:
 (a) Long term liability (b) Short term liability (c) None of these
8. Stock is:
 (a) Long term liability (b) Current liability (c) None of these
9. Bank loan is:
 (a) Fixed asset (b) Contingent liability (c) None of these
10.The total of debtors and bills receivable is:
 (a) Receivables (b) Payables (c) None of these

Self Test questions

 1)Paresh shah-Financial Accounting for
Management-Oxford , 2016

2) Maheshwari S.N & Maheshwari S K –

An Introduction to Accountancy
(Vikas,2017 )

References