ACCOUNTING

STANDARDS
What are Indian Accounting Standards?

As per popular definitions, Indian accounting standards are nothing but

guidelines to be followed in the accounting system. It means rules &
regulations that are to be followed while recording accounting & financial
transactions. It governs the manner in which financial statements are prepared
& presented in a company.
Core Objectives of the Indian Accounting
Standards

There is always a reason for any mission. Similarly, there are certain objectives for
having accounting standards. Let us take a look at the objectives of accounting
standards so that we understand in depth the deeper aim of it.
• The main objective of Indian accounting standards is to bring in more
transparency of annual financial statements in company accounts.
• Ensure companies in India adopt these standards to implement internationally
recognized best practices.
• One systematic, single accounting system common for all the companies.
Cutting out confusions and frauds.
• The Indian accounting standards are so simplified that they can be understood
worldwide, globally.
• There are several global requirements and the Indian accounting standards are
designed to match the global requirements.
• To increase the reliability of the financial statements .

These are some of the major objectives of Indian accounting standards

List of Accounting
Standards in India
Ind AS 1 Presentation of Financial Statements

Ind AS 2 Inventories Accounting

Ind AS 7 Statement of Cash Flows

Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Ind AS 10 Events after Reporting Period

Ind AS 11 Construction Contracts

Ind AS 12 Income Taxes

Ind AS 16 Property, Plant and Equipment

Ind AS 17 Leases

Ind AS 19 Employee Benefits

Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance

Ind AS 21 The Effects of Changes in Foreign Exchange Rates

Ind AS 23 Borrowing Costs

Ind AS 24 Related Party Disclosures

Ind AS 27 Separate Financial Statements

Ind AS 28 Investments in Associates and Joint Ventures

Ind AS 29 Financial Reporting in Hyperinflationary Economies

Ind AS 29 Financial Reporting in Hyperinflationary Economies

Ind AS 32 Financial Instruments: Presentation

Ind AS 34 Interim Financial Reporting

Ind AS 36 Impairment of Assets

Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets

Ind AS 38 Intangible Assets

Ind AS 40 Investment Property

Ind AS 41 Agriculture

Ind AS 101 First-time adoption of Ind AS

Ind AS 102 Share Based payments

Ind AS 103 Business Combination

Ind AS 104 Insurance Contracts

Ind AS 105 Non-Current Assets Held for Sale and Discontinued Operations

Ind AS 106 Exploration for and Evaluation of Mineral Resources

Ind AS 107 Financial Instruments: Disclosures

Ind AS 108 Operating Segments

Ind AS 109 Financial Instruments

Ind AS 110 Consolidated Financial Statements

Ind AS 111 Joint Arrangements

Ind AS 112 Disclosure of Interests in Other Entities

Ind AS 113 Fair Value Measurement

Ind AS 114 Regulatory Deferral Accounts

Ind AS 115 Revenue from Contracts with Customers

 IFRS
(International Financial Reporting Standard)
International Financial Reporting Standards (IFRS) are a set of
accounting standards that govern how particular types of transactions
and events should be reported in financial statements. They were
developed and are maintained by the International Accounting
Standards Board (IASB).
 Ledger
“Book or register which contains, in a summarized and
classified form, a permanent record of all transactions.”
When the journal entries are passed after that to classify
them, different accounts are prepared of individual nature.
These are called ledger.
“Book or register which contains, in a
summarized and classified form, a
permanent record of all transactions.”
When the journal entries are passed after
that to classify them, different accounts
are prepared of individual nature. These
are called ledger.
SIGNIFICANCE OF A LEDGER
• Classifies the transaction under individual heads
• Helps in the preparation of trial balance, through which
financial statements are prepared to ascertain the profit or
loss of the organization.
• Personal account depicts the money owed to creditors and
amount to be recovered from debtors.
• Real account shows the value of assets and value of stock.
• Nominal account reflects the sources of income and expenses
of the firm.
FORMAT OF LEDGER
ACCOUNT
POSTING THE ENTRIES
The process of transferring the information contained in a journal to a ledger is called posting.
Posting of account in a journal entry:

• Identification of the debit and credit accounts.

• Entering the date of transaction into the date column.

• Name of the account is written in the particulars column. If on debit side it will be written as “To( name of
account credited)” and if on credit side it will be written as “By (name of account debited)”.

• In the Journal Folio column page number where the entry exists in the journal will be written.

• Relevant amount will be recorded in “Amount Column”.

• A ledger account is prepared from

Trial balance
Cash book
BALANCING OF ACCOUNTS
In the balancing of accounts total of both debit and credit side is done.
After totalling their difference is find out and is written on the side
whose total is short. For example: if the total of the debit side is more
than the credit side then the difference amount will be written on the
credit side as balance c/d (carried down) and vice versa. On debit side
the balance will be written as “To balance b/d (brought down)” and on
credit side it will be written as “By balance b/d”. These balances will be
used as opening balance for the new period.
• Usually, the personal and the real accounts are balanced. Nominal accounts are
not balanced but are closed by transferring to trading or profit and loss account at
the end of the accounting year.
From the following ledger, the effect of the
below given transaction will be _____.

Explanation:

Cash Account is debited because amount is received for goods sold.

And Sales Account is credited because goods are sold on cash basis.

Hence, Cash Increases and Goods Decreases

Trial
Balance
Meaning of Trial Balance

The basic meaning of trial balance is a summary of debit and

credit balances of all the ledger accounts maintained by the
organization. The major objective of preparing a trial balance
is to check the arithmetical accuracy and correctness of
ledgers.
Steps in Preparation of Trial Balance
• Calculate the Balances of Each of the Ledger Accounts

• Record Debit or Credit Balances in Trial Balance

• Record Debit or Credit Balances in Trial Balance

• Calculate Total of The Credit Column

• Check if Debit is Equal To Credit

-----------------You must note that as per the accounting
principle:--------------------------
•All assets, expenses and receivables must have debit balances and all
•Liabilities, incomes and payables must have credit balances
format of trial balance