BOOK KEEPING &

ACCOUNTANCY
 INTRODUCTION
 VARIOUS ASPECTS OF BOOK KEEPING
RECORDS
 Has the business made a profit or suffered a
loss
 What is the amount of profit or loss
 How much property does the business own
 How much does the business owe others

 Book keeping is an important activity without

which accounting is not possible.
What is to be recorded
 Both types require assessment of
work done and for this they
require information
 Quantitative (B)  Quantitative (A)
 General  Relating to Operations
 Total no.of employees  Total Purchases
 Avg.age of employees  Total Sales
 Average experience  Expenses for year
 Production targets  Value of closing stock
 No.of sales outlets  Tax payable
Continued
 Qualitative (C)  Financial Accounting
 Efficiency  Uses A
 Labour unrest  Cost Accounting
 High Morale  Uses A+B
 Loyalty  Management
 Self-esteem Accounting
 Uses A+B+C
Meaning of Accounting
 Accounting is an 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.
 It is the science and art of correctly recording in
the books of accounts all those business
transactions that result in the transfer of money
or money’s worth.
Branches of Accounting

 FINANCIAL  Cost Accounting –

ACCOUNTING- main main aim is
aim is to ascertain  To ascetain the cost
 the profit or loss made
incurred for various
during a period activities
 Financial state of
 To enable
affairs at the end of
period
management to
exercise cost-control
 To maintain control
over firm’s property
Branches of accounting

 Management Accounting : The aim is

 To supply the management significant
and necessary information in order to
assist them in discharge of their
functions such as decision
making,control,etc
Objectives of financial
Accounting
 To ascertain the results of operations i.e. profit or loss
 To ascertain the financial position of the business
 To provide control over assets
 To provide information to all interested parties which are as
follows
 Owners : To know profit or loss or financial position
 Creditors : To know whether the business is creditworthy
and trustworthy
 Government : To assess tax liability
 Investors : to know whether they may invest
 Management : To keep a control over the various aspects
of business
 Importance & Utility
 Assistance to Management in Planning, decision-
making, controlling
 Overcomes the shortcomings of human memory
 Comparitive study
 Valuation of business
 Evidence in court
 Settlement of taxation liability
Limitations of financial
Accounting
 Financial accounting is not fully exact
 Financial accounting doesnot tell the whole
story
 Accounting statements may be drawn up
wrongly
 The most important asset human resources
cannot yet be included in the balancesheet
 Due to inflation many figures are out of date
Basic Accounting
Terminologies
 Assets  Proprietor
 Liabilities  Drawings
 Capital  Goods
 Revenue or Income  Debtor
 Expenses  Creditor
 Losses  Transaction
 Gain  Entry
 Books of account
Continued
 Capital,Revenue and  Accounting year
deferred revenue  Goodwill
expenditure
 Contingent Liability
 Cash Discount
 Trade discount
 Solvent
 Insolvent