Post on 08-Jul-2018
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Lata Kaushik
IEC Group of InstitutionsGreater Noida
Meaning & Scope ofAccounting
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Introduction
Almost All individuals perform = ECONOMIC ACTIVITY
These EA are Performed through = TRANSACTION &EVENTS
Transaction Performance of an Act or Agr!!m!ntE"!nt A happening A Cons!#u!nc! of Transaction AR!sult
Lets Take one Example
Purchases !"### $ales%#"###
&ent paid %"### $tock in hand
'"###$urplus (Pro)t* +"###
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N!!d $or maintaining th! R!cordso$ T & E
Ever, Economic Activit, &e2uire = %!cisionMaing
An E3ective 4ecision 5aking &e2uire =In$ormation
Accounting = 5easures / &ecords EconomicActivities
= / Generates 6Information7 that is usefulfor 64ecision 5aking7
Accountin = Universal A lication
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M!aning o$ Accounting
Accounting Is the Art
:f R!cording' Classi$(ing &Summari)ing
In a Signi*cant Mann!r
In Terms of Mon!(
T / E ;hich are of +inancial Charact!r/ Interpreting theR!sult th!r!o$
9o;ever the a0ove de)nition ;asn.t complete (>*
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,roc!dur! in Accounting-!n!rating +inancial In$ormation sing
+inancial In$ormation
Generating =D &ecording Classif,ing $ummarising Anal,sing Interpreting Communicating
In $hort Generating = & C$ A IC 8&andom Code = C$ AI& C
&ecording = 5eaning recoding the Transaction in = /ournalClassif,ing = Grouping or placing of transactions of similarnature at one Place = 0!dg!r
$ummarising = Preparation / Presentation of &/C 4ata in manneruseful to sers
( Like = Trial 1alanc!' ,ro*t & 0oss account '1alanc! Sh!!t & C+S *
Anal,sing = 5ethodical Classi)cation of data of F$ = (Like all FAat one place*
Interpreting= E1plaining the -5eaning / $igni)cance. of &elationship
of data(E1plains not onl, ;hat had happened 0ut ;h, so
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s!rs o$ +inancial In$ormation
Earli!r It was m!ant $or 4ust ,ro3ri!tor orOwn!r
Now It5s In"!stors6Su33li!rs60!nd!rs6Custom!rs6-o"!rnm!nt6Em3lo(!!s !tc
Two T(3!s o$ s!rs Int!rnal & E7t!rnal
Int!rnal 1O% 6 ,artn!rs 6 Manag!rs 6O8c!rs
-!ts Manag!m!nt R!3ort 9Small!std!tail co"!r!d:
E7t!rnal In"!stors 6 0!nd!rs 6 Su33li!rs 6-o"t. A !nci!s Em lo !!s Custom!rs
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E"olution o$ Accounting SocialSci!nc!
Earli!r =
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E"olution o$ Accounting Social Sci!nc!
Social R!s3onsi;ilit( Accounting= Accounting for Social Cost &
Social 1!n!*ts
Social Sci!nc!
= us!$uln!ss of Accounting to
$ociet, allo;s it to 0e treated as social
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O;4!cti"!s o$ Accounting
S(st!matic R!cording o$ Transactions
Asc!rtainm!nt o$ R!sults
Asc!rtainm!nt o$ +inancial ,osition
,ro"iding In$ormation to us!rs o$ accounting
To now a;out sol"!nc( ,osition
+unctions o$ Accounting
M!asur!m!nt o$ ,ast with Curr!nt ,!r$ormanc!
+or!casting o$ +utur! ,!r$ormanc! & +inancial,osition
%!cision Maing ,ro"id! R!l!"ant In$ormation
Com3arison & E"aluation Ass!ss ,!r$ormanc!Achi!"!d & %isclosur! o$ A, & C0
Control Id!nti*!s th! >!an!ss o$ +inancial S(st!m
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1oo?2!!3ing5eans = &ecording of Financial 4ata (in = $igni)cant /
:rderl, 5anner*Covers = Procedural Aspects
Governed 0, = End Product (i>e> F$*
&e2uires = $uita0le Classi)cation of Transactions / Events (asper &e2uirements of F$*
To $ho; = Correct Position of Each head of Income /E1penditure
Its Guided 0, La; in some cases (Like Companies Act" Coop$ocieties Act" H>*
$ole Proprietar, / Partnership = No $peci)c Act to maintainAc (e1cept IT Act in some cases*
O;4!cti"! O$ 1oo 2!!3ingComplete &ecording of Transactions
Ascertainment of Financial E3ects
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%istinction 1!tw!!n 1oo?2!!3ing & Accounting
K / A == $,non,mous
A = road Term / Include K
ookKeeping Accounting
Process of &ecording = T $ummariJing =&ecorded T
Constitute ase of Accounting Language of
usinessFinancial $tatement Not Part of K Prepared on =asis of K
5anagement 4ecision == 0e taken Can 0e taken on0asis of K
$u0)elds N: es
Financial Position 0e ascertained N: es
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Su;*!lds o$ Accounting
Financial Accounting
5anagement accounting
Cost Accounting$ocial &esponsi0ilit, Accounting
9uman &esource Accounting
In $imple Term = +M CS @
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R!lation o$ Accounting with Oth!r +i!lds
Economicin 4ecision 5aking = oth are Imp (still A provides maor data
0ase*
A adopted idea of = Malue" Income / Capital 5aintenance from E
Non :verlapping Areas = & C $ = T / E / Communicating
< StatisticsA = ver, Precise (E = not" ;orks on averages*
A = All values are Imp (E = ehaviors of Malues i>e> Trends*
= Math!matics
B 0aw
Manag!m!nt