MAA Unit 1.ppt - Need of Accounting Profit \u201cUltimate\u201d goal of everyone Profit = Income \u2013 Expenses Ascertain income and expenses and thereby

MAA Unit 1.ppt - Need of Accounting Profit “Ultimate”...

This preview shows page 1 - 9 out of 81 pages.

Need of Accounting 1 Profit : “Ultimate” goal of everyone Profit = Income – Expenses Ascertain income and expenses and thereby calculate your profit for the year
Image of page 1
Accounting – meaning 2 Income Expense Asset Liability for business, households and individuals Accounting in simple terms is to keep track of
Image of page 2
www. slideproject .com 3 "Accounting is the art of recording, classifying and summarising in a significant manner and in terms of money; transactions and events which are, in part at least, of a financial character, and interpreting the results thereof." -American Institute of Certified Public Accountants Accounting – Definition
Image of page 3
Procedure of accounting 4 Recording Classifying Summarizing Analyzing Interpreting Communicating Using the Financial information Procedure of Accounting Generating the Financial Information
Image of page 4
Accounting measures the past performance of the business entity and depicts its current financial position Measurement Accounting helps in forecasting future performances and financial position of the enterprise using past data Forecasting Accounting provides relevant information to the users of accounts to aid rational decision making Decision - Making Accounting assesses performance achieved in relation to targets and discloses information regarding accounting policies and contingent liabilities which play an important role. Comparison & Evaluation Accounting also identifies weakness of the operational system and provides feedbacks regarding effectiveness of measures adopted to check such weaknesses Control Accounting provides necessary information to the government to exercise control on the entity as well as in collection of revenues Government Regulation & Taxation 01 02 03 04 05 06 Functions of accounting
Image of page 5
Accounting Principles 6 Accounting Principles are the rules of action or conduct which are adopted by the accountants universally while recording accounting transactions. GAAP – Generally Accepted Accounting Principles Accounting principles are a body of doctrines commonly associated with the theory and procedures of accounting serving as an explanation of current practices. A guide for selection of conventions or procedures where alternatives exits.
Image of page 6
Accounting Concepts 7 Cost Concept Going Concern Concept Accounting Period Concept Money Measurement Entity Concept Dual Aspect Concept Matching Concept Realization Concept Accrual Concept Accounting concepts define the assumptions on the basis of which financial statements of a business entity are prepared. Certain concepts are perceived, assumed and accepted in accounting to provide a unifying structure and internal logic to accounting process.
Image of page 7
Accounting Conventions 8 Materiality Consistency Conservatism Disclosure Accounting conventions emerge out of accounting practices, commonly known as accounting principles, adopted by various organizations over a period of time.
Image of page 8
Image of page 9

You've reached the end of your free preview.

Want to read all 81 pages?

  • Fall '19
  • Balance Sheet, Generally Accepted Accounting Principles

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes