Download Basic Accounting 1 PDF

TitleBasic Accounting 1
TagsBookkeeping Debits And Credits Basis Of Accounting Expense
File Size1.1 MB
Total Pages322
Table of Contents
                            Types of Accounts
2.8 CHECK YOUR PROGRESS
                        
Document Text Contents
Page 1

LESSON 1 INTRODUCTION TO ACCOUNTING

Contents
1.0 Aims and Objectives
1.1 Introduction
1.2 Book- Keeping

1.2.1 Meaning
1.2.2 Definition
1.2.3 Objectives

1.3 Accounting
1.3.1 Meaning
1.3.2 Definition
1.3.3 Objectives
1.3.4 Importance
1.3.5 Functions
1.3.6 Advantages
1.3.7 Limitations

1.4 Methods of Accounting
1.4.1 Single Entry
1.4.2 Double Entry
1.4.3 Steps involved in double entry system
1.4.4 Advantages of double entry system
1.5 Meaning of Debit and Credit
1.6 Types of Accounts and its rules
1.6.1 Personal Accounts
1.6.2 Real Accounts
1.6.3 Nominal Accounts
1.7 Distinction between Book Keeping and Accounting
1.8 Branches of Accounting

1.8.1 Financial Accounting
1.8.2 Cost Accounting
1.8.3 Management Accounting

1.9 Let us Sum Up
1.10 Lesson-End Activities
1.11 Check your Progress
1.12 Points for Discussion
1.13 References

1.0 AIMS AND OBJECTIVES

i) To know the Meaning ,Definition and objective of Book- Keeping

ii) To study the objectives, functions, importance and limitations of
Accounting

iii) To understand the methods of Accounting, kinds of Accounts and
Accounting rules.

This watermark does not appear in the registered version - http://www.clicktoconvert.com

http://www.clicktoconvert.com

Page 2

http://www.clicktoconvert.com

Page 161

160


11.10 DISTINGUISH BETWEEN COST ACCOUNTING AND FINANCIAL
ACCOUNTING

Differences between Cost Accounts and Financial Accounts are listed below:

11.10.1 Objective

The main objective of cost accounting is to provide cost information to
management for decision making. The main objective of financial accounting is to
prepare Profit and Loss A/c and Balance Sheet to report to owners and outsiders.

11.10.2 Legal Requirement

Cost accounts are maintained to fulfil the internal requirements of the
management as per conventional guideline. Financial records are maintained as per
the requirement of Companies Act and Income Tax Act.

11.10.3 Classification of Transactions

Cost accounting records and analyses expenditure in an objective manner viz.,
according to purpose for which costs are incurred. Financial accounting classifies
records and analyses transactions in a subjective manner i.e., according to nature of
expenses.

11.10.4 Stock Valuation

In cost accounts stocks are valued at cost. In financial accounts, stocks are
valued at cost or realisable value, whichever is lesser.

11.10.5 Analysis of Profit and Cost

Cost accounts reveal Profit of Loss of different products, departments
separately. In financial accounts, the Profit or Loss of the entire enterprise is disclosed
into.

11.10.6 Accounting period

Cost report are continuous process and are prepared as per the requirements of
managements, may be daily, weekly, monthly, quarterly, or annually. Financial
reports are prepared annually.

11.10.7 Emphasis

Cost accounting lays emphasis on ascertainment of cost and cost control.
Financial accounts emphasis is laid on the recording of transactions and control aspect
is not given importance.

11.10.8 Nature

Cost accounts lay emphasis on both historical and predetermined costs.
Financial accounts are maintained on the basis of historical records.

11.11 LET US SUM UPS

Accounting relating to management called as management accounting.
Management has to take decision on day-to–day basis or long-term basis based on

This watermark does not appear in the registered version - http://www.clicktoconvert.com

http://www.clicktoconvert.com

Page 321

http://www.clicktoconvert.com

Similer Documents