Accounting introduction

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Accounting Introduction

By Sheela Warrier MeraSkill.com Š MeraSkill


Introduction to Accounting Š MeraSkill


Index What is Accounting Objectives of Accounting Accounting concepts,principles & conventions Accounting Standards Accounting Policies Measurement Principles Relationship with other discipline Limitations of accounting

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Concept

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Definition Recording Classifying Summarizing Significant manner Monetary transactions and events Interpreting the results Communicating financial information To take informed decisions

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Transaction Performance

Event Result

Carried out between two or more entities Money withdrawn from ATM Purchased goods Sold goods Pay expenses

Reduced cash balance Closing Stock Profit Š MeraSkill


Objectives of Accounting

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Objectives 1. Systematic recording of financial transactions 2. Ascertain the results of business operations 3. Ascertain the financial position 4. Communicate information 5. Ascertain solvency position

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Book Keeping

vs

Accounting

Analysis and interpretation of financial transactions (IS, BS, CF etc) Financial Statements Ascertains results or financial position of business Financial, Cost and No subdivision of book-keeping Management Accounting Accounting begins…….. Book Keeping ends…….. Recording of financial transactions (Journal, Ledger, Trial Balance) No Financial Statements Cannot ascertain results or financial position of business

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Users of Accounting Information

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Users of Financial Statements Owners Mangement Employees Lenders Suppliers Customers Govt agencies Public

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