Financial Accounting

Dr. Mohita
 Branches of
Accounting

Financial Cost Management

Student planning Vacation
• A student plans a vacation for which he demands money from his parents,
parents decided to give him money, on a condition that he will give the detail
of the expenses once back students then estimated various expenses which he
might incur on his trip
Financial Accounting
• Financial: related only with the transactions expressed in monetary terms
• Accounting: Identifying the transactions, and keeping a track of them
Accountancy

Accounting

Book
Keeping
 Accounting

Identifying,
Summarizing, Systematic
Measuring,
Interpretation, Knowledge of
Recording, Accounting
Communicating
Classifying
Accountancy
Book Keeping
 Transactions of
A Process Financial Nature

Recording
Journal

Classifying
Ledgers

summarizing Statement of Profit &

Loss, Balance Sheet

Interpretation
Ratios
Objectives of Accounting
• To maintain systematic Accounting records
• To ascertain the financial performance
• To ascertain the financial position
• To communicate the information to the users
 Interrelationship with Other Disciplines
• With Economics:
As economics is concerned with the effective utilization of scarce resources and
thus maximizing the wealth of the shareholders, accounting also targets the same
and provide accurate, reliable and timely information so that the organization can
manage its resources well

• With Statistics
Statistics deals with the computation techniques used to analyse quantitative
data. Accounting uses the concepts while calculating rations and developing
financial statements for better understanding of the data
• With Mathematics
Mathematics is crunching numbers and suggests various techniques for
computational ease. Accountancy uses the techniques suggested and makes the data
more understandable

• With Law
law deals with the legal formalities must be followed by an organization,
Accounting is governed by law. Accounting function is mandatory for the
organization. The formats made and the statements developed are done according to
the legal procedure suggested under the Act
Various acts applicable are: Sale of Goods Act, Wages Act, Companies Act
Uses of Accounting Information
• Owners
• Management
• Employees
• Investors: Current and Perspective
• Government
• Vendors
• Customers