My SRC My Pride INTRODUCTION TO ACCOUNTING Account i ng is an information system that provides quant i ta t ive financ i al informa t ion to stakehold e rs about the econom ID: 1027248
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1. Department of Business Administration“My SRC, My Pride”
2. INTRODUCTION TO ACCOUNTING
3. Accounting is an information system that provides quantitative, financial information to stakeholders about the economic activities and condition of a business so that they can make business/economic decisionsWHAT IS ACCOUNTING?
4. Accounting:“Accounting is the are of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are of a financial character and interpreting the result thereof” (AICPA)Bookkeeping:“ only involves activities of collecting and recordingfinancial data”DIFFERENCE BETWEEN ACCOUNTING AND BOOK KEEPING
5. The process of identifying, measuring, recording and communicating economic information to permit informed judgment and decisions by users ofthe information.ACCOUNTING: DEFINITION
6. IDENTIFYING : Identify those events that are considered as an evidence of economic activity relevant to the businessMEASURING : Measuring the eventsRECORDING : Keeping of a chronological diary of measured events in an orderly and systematic mannerCOMMUNICATING : Communicate through the preparation and distribution of accounting reports to the interested parties.PROCESS OF ACCOUNTING
7. Internal UsersExternal UsersUSERS OF FINANCIALINFORMATION
8. Maintenance of Accounting RecordsAscertainment of profit or lossDepiction of financial positionProviding informationOBJECTIVES OF ACCOUNTING
9. Systematic recordsPreparations of financial statementsAssessment of progressAid to decision makingStatutory requirementsInformation to interested groupsEvidence in courtsTaxation problemsMerger of firmsADVANTAGES OF ACCOUNTING
10. Financial AccountingCost AccountingManagement AccountingBRANCHES OF ACCOUNTING
11. TYPES OF ACCOUNTS
12. PERSONAL ACCOUNTSAccounts of persons with whom the business has dealings are known as Personal accounts.Natural persons : The name of an IndividualArtificial persons : Firms’ accounts. Ltd co’s, Bank etc.,Representative personal accounts : All accounts representing outstanding expenses and accrued or prepaid incomes are personal accounts
13. REAL ACCOUNTS Accounts in which the business records the real things owned by it. i.e, assets of the business are known as real accounts. NOMINAL ACCOUNTS It relates to the items which exist in name only. Expenses, incomes etc.,
14. AccountsDebit creditPersonal AccountsThe ReceiverThe GiverReal AccountsWhat comes in What goes outNominal AccountsAll Expenses and LossesAll Income and GainsGOLDEN RULES OF ACCOUNTANCY
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