accounting basics
DESCRIPTION
A presentation on Basics of accountingTRANSCRIPT
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ACCOUNTING: AN INTRODUCTION
PRESENTED BYTITTY BENJAMIN
SHERRY RITHA ANTONY
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ACCOUNTING
MEANING OF ACCOUNTINGDEFINITION OF ACCOUNTING ACCORDING
TO AICPA
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OBJECTIVES MAINTENANCE OF RECORDS OF
BUSINESSCALCULATION OF PROFIT OR LOSSDEPICTION OF FINANCIAL POSITIONMAKING INFORMATION AVAILABLE TO
VARIOUS GROUPS
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SOME BASIC TERMS1) ASSETSa) FIXED ASSETSb) CURRENT ASSETS
2) LIABILITIESa) SHORT TERMb) LONG TERM
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3) CAPITAL
4) REVENUES
5) EXPENSESa) CAPITAL EXPENDITUREb) REVENUE EXPENDITURE
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6) PURCHASES7) SALES8) STOCK9) DEBTORS10)CREDITORS11)DRAWINGS12)BUSINESS TRANSACTIONS
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THEORY BASE OF ACCOUNTING GAAP 1) ACCOUNTING CONCEPTS 2) ACCOUNTING PRINCIPLES 3)MODIFYING PRINCIPLES
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ACCOUNTING CONCEPTSACCOUNTING ENTITYGOING CONCERNMONEY MEASUREMENTVERIFIABLE OBJECTIVEACCOUNTING PERIOD
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ACCOUNTING PRINCIPLESREVENUE REALISATIONEXPENSE OR COSTMATCHING PRINCIPLEFULL DISCLOSUREDUAL ASPECT
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MODIFYING PRINCIPLESPRINCIPLES OF MATERIALITYPRINCIPLE OF CONSISTENCYCONVENTION OF CONSERVATISMTIMELINESSPRACTICE IN INDUSTRYCOST BENEFIT PRINCIPLEPRUDENCE
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ORIGIN AND RECORDING OF TRNSACTION
ACCOUNTING EQUATION
ASSETS=LIABILITIES
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ACCOUNTS AN ACCOUNT IS DEFINED AS A FORMAL
RECORD OF ALL TRANSACTIONS RELATING TO CHANGES IN A PARTICULAR ITEM
UNDER THE ENGLISH APPROACH, ACCOUNTS ARE:
a)PERSONAL ACCOUNT b)REAL ACCOUNT c)NOMINAL ACCOUNT
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PERSONAL ACCOUNTS
DEBIT THE RECIEVER CREDIT THE GIVER
EXAMPLE
#RAM PAID RAJU RS 10000
#DEVIKA RECEIVED RS 5000 FROM MALAVIKA
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REAL ACCOUNTS
DEBIT WHAT COMES IN CREDIT WHAT GOES OUT
EXAMPLE#FURNITURE WORTH RS 25000 BOUGHT FOR
CASH#MACHINERY WORTH RS 40000 SOLD FOR
CASH
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NOMINAL ACCOUNTS
DEBIT ALL EXPENSES AND LOSES CREDIT ALL INCOMES AND GAINS
EXAMPLE#SALARY RS 5000 PAID#RENT RS 2500 RECIEVED