Accountancy Pp t

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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

Accountancy Pp t

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