SUBMITTED TO ANKIT SIR…

MANAGEMENT ACCOUNTING

SUBMITTED BY SAURABH VERMA (B.COM1)

PRESENTATION ON :--> ACCOUNTING PROCESS

-> LIMITATION OF ACCOUNTING -> ACCOUNTING EQUATIONS

Accounting Equation

Assets = Owner’s Equity + Liabilities

Items of value owned by the business

The funds of a business provided by its owners and the profits entitled to him

Debts owed by a business to external parties such as suppliers

Assets = Owner’s Equity + Liabilities

Building

Motor vehicle

Office Equipment

Fixtures

Stock (closing)

Cash in hand

Cash at bank

Capital

Profits

Creditors

Loan from bank

Other creditors

* Explain these terms to students

Assets = Owner’s Equity + Liabilities

Every transaction will affect 2 items.

The equation will still balance!

MEANING ACCOUNTING AS AN INFORMATION IS THE PROCESS OF IDENTIFYING MEASURING AND COMMUNICATING THE ECONOMIC INFORMATION OF AN ORGANIZATION TO ITS USERS WHO NEED THE INFORMATION FOR DECISION MAKING …IT IDENTIFIES TRANSACTIONS AND EVENTS OF A SPECIFIC ENTITY

DEFININATION

A/C is ‘’ the art of recording , classifying and summarizing in a significant manner and in the term of mony , transactions and events which are in a part at least , of a financial character and interpreting the result thereof’’…

Management A/C ‘’is a term used to describe the accounting methods , systems and techniques which coupled with special knowledge and ability assist management in its task of maximizing profit and minimizing losses’’…

OBJECTIVES OF ACCOUNTING

To keep systematic record... To ascertain the financial position of the business… To portray the liquidity position… To protect business properties… To facilitate rational decision making… To satisfy the requirements of law…

FUNCTIONS OF MANAGEMENT ACCOUNTING

Furnishing relevant and vital data… Compilation of data in suitable form… Analysis and interpretation… planning… Decision making…

LIMITATIONS OF ACCOUNTING

Accounting is histrocial in nature; It does not reflects the current financial position or worth of a business….

Facts recorded in financial statement are greatly influenced by accounting conventions and personal judments of the accountant or management.. Valuation of inventory , provision for doubtful debts and assumption about useful life of an asset may , therefore , different from business house to other…

Accounting principle are not static or unchanging – alternative accounting procedures are often equally acceptable.. Therefore , accounting statements do not always present comparable data…

-> Cost concept is found in accounting … price changes are not considered… Money value is bound to change often from time to time…This is a strong limitation of accounting…

->Accounting statements do not show the impact of inflation…

THANK YOU