Post on 03-Apr-2018
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ACCOUNTING FOR MANAGERS
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ACCOUNTANCY: Conceptual Outlook
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ACCOUNTING PROCESS
1. RECORDING (JOURNAL)
2. CLASSIFYING (LEDGER)3. TRIAL BALANCE (SUMMARISING)
4. TRADING &PROFIT&LOSS
ACCOUNT & BALANCESHEET
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IMPORTANT ACCOUNTING TERMS
Debtor
Creditors
Capital
Assets
Liabilities
Stock
Purchases
Sales
Outstanding Expenses
Accrued expenses
Prepaid Expenses
Prepaid Income
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GAAP: Conceptual Outlook
They are defined as those rules ofaction which are derived from
experience and practice and when
they are prove useful ,they are said tobe accounting principles
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TYPES OF GAAP Going concern
Accrual
Money measurement
Accounting period
Historical cost Matching
Business entity
Dual aspect
Revenue
Materiality
Consistency
Prudence/conservatism
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CHARACTERISTICS OF
ACCOUTING INFORMATION
Understandability
Relevance
ConsistencyComparability
Reliability
Objectivity
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ACCOUNTING STANDARDS
Conceptual outlook
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ACCOUNTING EQUATION
ASSETS=LIABILITIES +CAPITAL
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RULES OF ACCOUNTING
Debit the receiver &credit the giver
Debit what comes in & credit what goes out
Debit all losses and credit all gains Increase in assets, expenses is debited &
decrease is credited
Increase in Liabilities, Capital& Income iscredited & decrease is debited
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TYPES OF ACCOUNTS
Natural
eg: ram, shyam etc
Artificial
eg ;bank, club etc
Represenative
eg:Prepaid rent etc
PERSONAL
Tangibles
eg: car, Plant etc
Intangibles
eg: patent etc
REAL NOMINAL
IMPERSONAL
ACCOUNTS
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EXAMPLES OF
ACCOUNTING PROCESS Shaheedbrought cash Rs. 1,50,000 to start a
business.
He deposited Rs. 1,30,000 in a newly opened bank
account. He purchased goods for cash Rs10000 and credit
from sita Rs. 8,000.
He purchased goods for Rs. 10,000, payment was
made through bank. Shaheedwithdrew Rs. 2,000 from the bank for
office use.
.
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He withdrew Rs. 1,000 from the bank for personal
use.and took goods worth Rs2000 for personal use
He sold goods for cash Rs. 15,000. Out of this he
again deposited Rs. 12,000 into the bank Purchased goods on account fromX; Rs. 8,000.
Sold Goods on account to Y, Rs. 5,000
Sold goods for cash to Y, Rs. 1,000 Purchased goods for cash from Z, Rs. 2,500.
Purchased goods for credit fromX, Rs. 1,800.
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Building purchased on account,from ram Rs.
30,000
Cash received from Y, Rs. 1,600
Cash paid toX, Rs. 3,000 Rent outstanding Rs1000
Salary paid Rs1500
Prepaid Insurance Rs500 Income received in advance RS1000
Goods given as charity Rs1000