1 - Introduction to Accountingx - Introduction to Accounting By Dr Chhavi Mehta INTRODUCTION What is accounting Language used to communicate

1 - Introduction to Accountingx - Introduction to...

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Introduction to Accounting By Dr. Chhavi Mehta
INTRODUCTION What is accounting? Language used to communicate financial information in the world of business It is a process of identifying, measuring & communicating economic information to permit informed judgments and decisions by a user of
Objectives of Accounting To maintain records To calculate profit and Loss To depict financial position To portray liquidity position To fill tax returns To communicate financial information to various users
Advantages of Accounting Provides complete systematic record Facilitates comparative study Facilitates assessment of tax liability Facilitates raising funds – loans or equity Informs about profitability and financial position
Users of Accounting Information External Stakeholders Internal Stakeholders
Users of Accounting Information External Stakeholders Supplier of the funds – Shareholders, Lenders (Banks and financial institutions), Potential investors Creditors Customers Tax Authorities Government & Regulatory Bodies Credit Rating Agencies Researchers
Users of Accounting Information Internal Stakeholders Managers – Prepare financial statement and use them Employees and Unions
ACCOUNTING Basis of Accounting Cash Basis Accrual Basis System of Book- keeping Single Entry Double Entry
Basic Accounting

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