Anda di halaman 1dari 14

ACCOUNTING FOR MANAGERS

ACCOUNTANCY: Conceptual Outlook

ACCOUNTING PROCESS
1. RECORDING (JOURNAL) 2. CLASSIFYING (LEDGER)

3. TRIAL BALANCE (SUMMARISING)


4.

TRADING &PROFIT&LOSS ACCOUNT & BALANCE SHEET

IMPORTANT ACCOUNTING TERMS


Debtor Creditors Capital Assets Liabilities Stock Purchases Sales Outstanding Expenses Accrued expenses Prepaid Expenses Prepaid Income

GAAP: Conceptual Outlook


They are defined as those rules of action which are derived from experience and practice and when they are prove useful ,they are said to be accounting principles

TYPES OF GAAP

Going concern Accrual Money measurement Accounting period Historical cost Matching Business entity Dual aspect Revenue Materiality Consistency Prudence/conservatism

CHARACTERISTICS OF ACCOUTING INFORMATION


Understandability

Relevance
Consistency

Comparability
Reliability Objectivity

ACCOUNTING STANDARDS

Conceptual outlook

ACCOUNTING EQUATION

ASSETS=LIABILITIES +CAPITAL

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 is credited & decrease is debited

TYPES OF ACCOUNTS
ACCOUNTS

PERSONAL

IMPERSONAL

Natural Artificial eg: ram, shyam etc eg ;bank, club etc

Represenative eg:Prepaid rent etc

REAL

NOMINAL

Tangibles eg: car, Plant etc

Intangibles eg: patent etc

EXAMPLES OF ACCOUNTING PROCESS


Shaheed brought 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. Shaheed withdrew Rs. 2,000 from the bank for office use. .

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 from X; 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 from X, Rs. 1,800.

Building purchased on account,from ram Rs.

30,000 Cash received from Y, Rs. 1,600 Cash paid to X, Rs. 3,000 Rent outstanding Rs1000 Salary paid Rs1500 Prepaid Insurance Rs500 Income received in advance RS1000 Goods given as charity Rs1000