agri mba accounting ppt by sanchayan

ACCOUNTINGbasic

SUBMITTED TO- Dr. A.K MISHRA

SUBMITTED BY- SANCHAYAN KHAN(1ST YEAR)

DEFINITION OF ACCOUNTING

“The art of recording ,classifying and summarising in a significant manner and in terms of money or financial transaction”

OR

The process or work of keeping financial accounts

SUBJECT AREAS OF ACCOUNTING

1. Financial accounting2. Cost accounting3. Management accounting4. Human resource accounting5. Social responsibility accounting

ACCOUNTING CONCEPT1. Going Concern Concept2. Business Entity Concept3. Money Measurement Concept4. Cost Concept5. Dual Aspect Concept6. Accounting Period Concept7. Matching Concept8. Consistency Convention9. Disclosure10.Conservatism11.Materiality

GENERAL USES OF ACCOUNTING INFORMATION

Internal users

• MANAGEMENT

• EMPLOYEE

• OWNERS

External users• Creditors• Tax Authorities• Investors• Customers• Regulatory

Authorities

ADVANTAGE & DISADVANTAGE OF ACCOUNTING

ADVANTAGE DISADVANTAGE1. Helps planning and control in operation all business activities

1. Records only monetary transaction , accounting does not record events which are not of a financial nature

2. Helps decision making to various parties such as owners,lenders,creditors

2. Does not provide timely information for decision making to different users

3. Keep systematic records of business occur in the books and therefore of a organisation

3. Effect of price-level changes not considered and the financial statement do not show a true picture of the enterprise

4. Prepare financial statements contained in the accounting records like profit, loss , balance sheet easily

4. Permits alternative treatments .like application of different methods of charging depreciation gives rise to different profits

5. Provide control over assets and use them in best possible way

5.Historical in nature, the accounting records do not reflect the current value of the assets like land ,building

TYPES OF ACCOUNT

ACCOUNT

PERSONAL ACCOUNT

NATURAL PERSONES PERSONAL ACCOUNT

ARTIFISIL PERSONES PERSONAL ACCOUNT

REPRESENTATIVE PERSONES PERSONAL

ACCOUNT

IMPERSONAL ACCOUNT

REAL ACCOUNT

NOMINAL ACCOUNT

REAL ACCOUNT

TANGABLE

INTANGABLE

THE GOLDEN RULES OF ACCOUNTING

RECORDING OF TRANSACTION

JOURNALThe word journal has been derived from the French word “jour” which means a day .

So journal is a daily record of business transactions• Rahul start business with cash 45000/-(2015,june 1st) june 2 sold goods

for cash 5000,paid telephone rent for one year 500. Pass the journal entry.DATE PARTICULARS L. F. Dr.

AmountCr.Amount

2010 June 1

Cash A/C Dr To Capital A/C

45,000 45,000

June 1 Bank A/C Dr To cash A/C(Being cash paid into bank)

25,000 25,000

June 2 Cash A/C Dr To Sales A/C(Being goods sold for cash)

5,000 5,000

June 30 Telephone Rent A/C Dr To Cash A/C(Being telephone rent paid)

500 500

TOTAL 75,500 75,500


LEDGERLedger is classified summery of all the transactions relating to a

person ,asset,expenses,or income made in the journal it tells about the nature of a particular account.

Cash account

date particulars f. amount date particulars f. amountTo capital a/c 45000 By bank a/c 25000To sales a/c 5000 By telephone

rent a/c500

By bal c/d 24,500

50000 50000To bal b/d 24,500

Sales account Date particulars F. Amount Date particulars F. Amount

To bal c/dRs.5000

june1By cash A/C

To bal b/d

Rs.5000

5000

Capital accountdate particular

sF. Amount date particulars F. Amount

To bal c/d 45000 By cash account 45000

45000 45000

To bal b/d 45000

Bank accountdate particulars F. Amount date particulars F. Amount

To cash a/c 25,000 By bal b/d 25000

25000 25000

To bal c/d 25000

Telephone rentdate particulars F. Amount F. Amount

To cash a/c 500By bal c/d 500

500 500

To bal b/d 500

TRIAL BALANCEA Trial balance is “a statement of

balance of all the account, prepared on a specific date to ascertain the

arithmetical accuracy of the book of account”

Trial balance

Serial No Name of account Dr.BalanceRs.

Cr.BalanceRs.

Cash account 24500

Capital account 45000

Sales account 5000

Bank account 25000

Telephone rent 500

Total 50,000 50,000

Trial balance

SUBSIDIARY BOOKSSubsidiary Books are those books of original entry in which transactions of similar nature

are recorded at one place and in chronological order. In a big concern, recording of all

transactions in one Journal and posting them into various ledger accounts will be very difficult and involve a lot of clerical work.



TYPES OF SUBSIDIARY BOOKS

1. CASH BOOK2. PURCHASE BOOK3. SALES BOOK4. PURCHASE RETURN BOOK5. SALES RETURN BOOK6. BILS PAYBLE BOOK7. BILS RECIVABLE BOOK8. JOURNAL PROPER

Cash bookJournal in which all cash receipts and

payments (including bank deposits and withdrawals) are recorded first, in chronological order, for posting to

general ledger. Cash book is regularly reconciled with the bank statements as

an internal auditing measure.


CASH BOOKIt is used to recode cash transactions only.TYPES OF CASH BOOK

1.Single column cash book 2.Double column cash book 3.Triple column cash book4.Bank cash book5.Petty cash book


RECORDING OF TRANSACTIONSimple cash book

It has only one cash column on both side to record receipt of cash and

payment of cash.


• DOUBLE COLUMN CASH BOOK• In Double column cash book, there are two

columns of amount on each side of the cash book. Now-a-days bank transactions are very large in number. In many organisations, as far as possible, all receipts and payments are affected through bank. A businessman generally opens a current account with a bank.


• A three-column cash book is one that has three columns on both the debit and credit side of the journal. The first column corresponds to cash transactions, the second to bank transactions and the third to discounts issued and received.


FINAL ACCOUNTThe account and statement which are prepaid

by a business at the end of the financial year to know the final result and final position of a business is known as final account . This final account include of

1.Trading and profit and loss account 2.Balance sheet


Trading accountA trading account is similar to a traditional

bank account, holding cash and securities, and is administered by an investment dealer.

PROFIT AND LOSS ACCOUNTan account in the books of an organization to which incomes and gains are credited and expenses and

losses debited, so as to show the net profit or loss over a given period


Rs. Rs.

To carriage outwardTo salariesTo rentTo fire insurance premiumTo bad debtsTo discountTo printing and stationery To rate and taxes To travelling expensesTo sundry trade expensesTo net profit transfer to capital a/c

2,5005,5004,1009002,100500250350200300

86,800

1,03,500

By gross profit b/dBy apprentice premiumBy rent receive on sub-letting

1,01,0001,500

1,000

1,03,500


Balance sheeta statement of the assets, liabilities, and capital

of a business or other organization at a particular point in time, detailing the balance of

income and expenditure over the preceding period.


LIABILITIES AMOUNT ASSETS AMOUNT

CAPITAL 20XAdd: Interest on capital 2xLess : drawings 3xLess: interest on drawings xAdd :net profit 12x

Sundry creditor Bills payableBank lone /overdraftAll reserve/ provision/ funds

30x5x3x2x5x

45x

Cash in hand Cash at bank Sundry debtorsBills receivablePlants & machineryBuilding Other assets Closing stock

5x4x6x2x8x15x2x3x

45x


BANK RECONCILIATION STATEMENTThe statement which is prepared to reconcile the balances between cash book & pass book is known as bank reconciliation statementThe Errors1.Cheqe issued by the trader but not presented for payment.2.Cheqe deposited into bank but not collected by the banker.3.Direct payment into bank by a costumer of the business man.4.Pass book debited for bank commission and charges.5.Pass book credited for interest.6.Cheque dishonoured .7.Amout collected by the bank on behalf of the trader.


RECORDING OF TRANSACTION• From the following particulars prepare a bank

reconciliation statement as on 31st December 2014 of Ram pipes Ltd. Who had cash at bank as per cash book Rs.14,200.

(a)Cheque paid into bank Rs. 2,850 but not yet cleared.(b)Cheque issued Rs.3,650 is not presented for payment

till 31.12.2014(c)Dividend and interest collected directly by bank Rs.750.(d)Bank charges and insurance premium debited by bank

Rs.12,500

Particulars Details RS.

Amount Rs.

Balance as per cash bookAdd : cheque issued but not presented for payment dividend and interest collected by bank

Less : cheque paid into bank but not yet collected Bank charges and insurance premium debited by bank

balance as per bank pass book

3,650750

2,850

1,250

14,200

4,40018,600

4,100

14,500


COST ACCOUNTING

Cost- an amount that has to be paid or spent to buy or obtain somethingCost accounting- Cost accounting is the classifying ,recording and appropriate allocation of expenditure for determination of the costs of product or services ,and for the presentation of suitably arranged data for purpose of control and guidance of management.

ELEMENT OF COST

Elements of cost

material

Direct Indirect

labour

Direct indirect

other expenceses

Direct indirect

OVERHEADS1. production or works

overheads2. Administration overheads 3. Selling overheads4. Distribution overheads


COST SHEET

Cost sheet is a statement designed to show the output of a particular accounting period along with break-up of cost sheets.A cost sheet is a report on which is accumulated all of the costs associated with a product or production job. A cost sheet is used to compile the margin earned on a product or job

Specimen cost sheet PARTICULARS DETAILS

Rs.AMOUNTRs.

Opening stock of raw materialAdd: raw material purchaseLess: closing stock of raw materialRaw material consumedAdd: direct labour Add: direct expenses prime costAdd : factory/work/manufacturing overhead Factor cost incurred Add: opening stock of work in progressLess: closing stock of work in progress work costAdd: administration overhead cost of productAdd: opening stock of finished goodLess: closing stock of finished goodCost of goods coldadd :seller and distribution overhead cost of sale

RATIO ANALYSIS

Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication of a firm's financial performance in several key areasTYPES OF RATIO1.Liquidity ratio-ratio between the liquid assets and the liabilities

2.Solvency ratio- measure the ability of a company to meet its long term debts

3.Turn over ratio-percentage of a investment that have been replaced in a given year

4.Profitability ratio-measure the business ability to generate earnings compared to its expenses

agri mba accounting ppt by sanchayan

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