This presentation deals with a comprehensive study on accounting.

1. COMPREHENSIVE STUDY OF ACCOUNTING

2. ACCORDING TO AICPA ACCOUNTING IS DEFINED
AS:
“the art of recording, classifying, and summarizing in a significant manner
and in terms of money, transactions and events which are, in part at least,
of financial character, and interpreting the results thereof”.
{NOTE: AICPA :-The American Institute Of Certified Public Accountants}

3.  INTRODUCTION:
Art of recording , classifying and summarizing of financial transactions.
The American Accounting Association (AAA) defines Accounting as,
‘the process of identifying, measuring and communicating economic
information to permit informed judgments and decisions by users of
information’.

4. Aspects of the definition:
• Economic Events
• Identification, Measurement, Recording and Communication
• Organization
• Interested Users of Information

5.  The accounting equation shows
on a company's balance that a
company's total assets are
equal to the sum of the
company's liabilities and
shareholders' equity.

6.  OBJECTIVES OF ACCOUNTING:
o CONTROL OVER ASSETS AND LIABILITIES:
*Control over business resides with businessman.
*Actual position pf debt, liabilities etc. can be
ascertained through proper book keeping.
o PROVIDING ECONOMIC DATA:
*Provides economic datas required for financial
reports.

7. oASCERTAINMENT OF FINANCIAL AFFAIRS:
*Preparing of income statement.
*Ascertain surplus and deficit
oIDENTIFICATION AND RECORDING OF TRANSACTIONS:
. *Primary objective.
*Shows true nature of transactions.

8.  T account is an important
part of accounting.

9. QUALITATIVE CHARACTERISTICS OF ACCOUNTING
INFORMATION:
oReliability:
*Users must be able to depend on the information.
*Reliable information should be free from errors and bias.
oRelevance:
*Makes a difference in decision making.

10. o Understandability:
*Information helps to compare between different entities.
o Comparability:
*It allows comparison of single entity from one accounting
period to the next.

11.  Golden rules of accounting.

12. BOOK KEEPING

13.  Process of recording financial transactions of a company on a regular
basis.
Process of managing all the financial data of a company.
Make companies aware of their current financial position, as well as the
transactions that occur within the company.

14.  IMPORTANCE OF BOOK KEEPING:
Gives companies a reliable measure of their performance.
Essential function for both legal and financial management purposes.
 Helps to respond to potential IRS inquiries or audits.
Provides recommendations to ensure accuracy and improve spending.

15.  The Golden rules define the treatment of all
transactions conducted by the business.

16.  BRANCHES OF ACCOUNTING
 There are 8 different branches of accounting:

17. BRANCHES OF
ACCOUNITNG
5)Accounting
Information
System
6)Tax
Accounting
7)Forensic
Accounting
8)Fiduciary
Accounting
1)Financial
Accounting
2)Cost
Accounting
3)Auditing
4)Managerial
Accounting

18. 1)FINANCIAL ACCOUNTING:
 Involves recording and categorizing of financial transactions in the
business.
 Recording of transactions according to the accounting principles.
 Original form of accounting process.
 To calculate profit and loss of the firm and to ascertain financial position.

19. 2)COST ACCOUNTING:
A type of managerial accounting.
Deals with the evaluation of the cost of product or services offered.
Internally used to assess company’s operations.
It deals with company’s fixed assets and variable costs.

20. 3)AUDITING:
Two types: (A)INTERNAL AUDITING : A third party who reviews a
financial statement with respect
to GAAP.
(B)EXTERNAL AUDITING : Helps to reduce frauds,
mismanagement etc.

21. 4)MANAGERIAL ACCOUNTING:
 Also known as MANAGEMENT ACCOUNTING.
 Provides information to the management for better administration.
 Helps to make important decisions.
 Includes budgeting, forecasting, cost analysis, financial analysis, reviewing
past business decisions ETC.

22. 5)ACCOUNTING INFORMATION SYSTEMS:
• Also known as AIS.
• Collection , storage, processing etc. of financial and accounting data used
by internal users.
• A computerized method for tracking accounting activity in relation with
information technology resources.
• Includes accounting software management , the management of
bookkeeping , accounting employees etc.

23. 6)TAX ACCOUNTING:
o Involves planning for tax time and the preparation of tax returns.
o Deals with the preparation of tax returns and tax payments.
o Mainly used by individuals, businesses, corporations and other entities.
o Focuses on taxes rather than the appearance of public financial
statements.

24. 7)FORENSIC ACCOUNTING:
• A blend of accounting and investigative techniques which are used to
identify financial crimes.
• Helps to narrate the nature of financial crimes committed, to the
courts.
• Mainly used by Insurance industries to set up damages from the
claims.

25. 8)FIDUCIARY ACCOUNTING:
o Deals and manages any account and activities related to the
administration and wardenship of property.
o Works on Cash basis.
o Deals with the management of property for another person or business.

26.  INFLATION ACCOUNTING:
Two methods are used:
(A)CURRENT PURCHASING POWER [CPP]:
Monetary and non-monetary
items are separated.
(B)CURRENT COST ACCOUNTING [CCA] :
Values assets at fair market
value rather than historical cost.
 Process and practice of
adjusting financial
statements according to
its price indexes.

27.  This is an image of an accounting
worksheet prepared on behalf of ENGLAND
TOURS COMPANY

28.  GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES [GAAP]:
 (GAAP) refer to a common set of accounting principles, standards, and
procedures issued by the Financial Accounting Standard Board(FASB).

29. 1) PRINCIPLE OF REGULARITY: Accountants has to obey all the rules and
regulations of GAAP.
2) PRINCIPLE OF CONSISTENCY: Accountants should enter all the items as
in the same way , which has been fixed.
3) PRINCIPLE OF SINCERITY :Accountants should provide correct depiction
of financial statement.

30. 4) PRINCIPLE OF
PERMANENCE OF
METHOD : There
must be

31. 6) PRINCIPLE OF
PRUDENCE :
Financial data
representation

32. 9) PRINCIPLE OF FULL DISCLOSURE : While creating the financial reports,
the accountants must strive aim full
disclosure.
10) PRINCIPLE OF UTMOST GOOD FAITH : This states that the parties must
remain honest in the financial
transactions.

33.  Some basic terms regarding
accounting.

34.  ACCOUNTING PRINCIPLES
 Rules and guidelines that a company must follow.

35. ACCOUNTING PRINCIPLES ARE OF TWO TYPES
GENERAL PRINCIPLES SPECIFIC PRINCIPLES
 Basic assumptions ,
concepts and guidelines for
preparing financial
statements.
 Rules used in reporting
business transactions and
events.
 Stem from long used
accounting practice.
 Created by an
pronouncement from ana
authoritative body.

36. ACCOUNTING
PRINCIPLES
REVENUE
RECOGNI-
TION
GOING
CONCERN
CONSISTE-
NCY
ACCRUAL
COST
MATERIALI-
TY
MATCHING
CONSERVA
-TION

37.  Basic accounting
principles that every
graduates must know.

38.  The accounting cycle is a collective process of
identifying, analyzing, and recording the
accounting events of a company.

39.  Accounting ratio is the comparison of two
or more financial data which are used for
analyzing the financial statements of
companies.

40.  COMPUTERIZED ACCOUNTING
• Accounts that are stored on a company's computer,

41. Processing of accounting information with respect to GAAP.
Software program which is stored on a company’s computer, network
server etc.
Accessed via internet.
Minimize errors.

42.  These are some of the advantages of
COMPUTERIZED ACCOUNTING.

43.  Components of Accounting worksheet.

44.  Modern rules of accounting are given below:

45.  DIFFERENCE BETWEEN INTERNATIONAL
FINANCIAL STANDARDS (IFRS) AND INDIAN
ACCOUNTING STANDARDS (Ind-AS):
Ind-AS IFRS
*Balance Sheet *Statement of profit and loss.
*Profit and loss account. *Statement of cash flows.
*Statement of changes in equity. *Statement of changes in equity.
*Disclosure of significant
accounting policies.
*Statement of financial position.

46.  Classification of accounts are shown in the following chart:

47.  Types of ratio analysis
methods.

48. CONSISTENCY
PRUDENCE
DISCLOSURE
MATERIALITY
ACCOUNTING
CONVENTIONS

49.  This is a graphical depiction of
accounts payable turnover over
a year.

50.  This is a graphical representation of
accounts receivable turnover over a year.

51.  CLOUD ACCOUNTING
 is accounting software that is hosted on a remote server

52. BENEFITS OF
CLOUD
ACCOUNTING
RELIABILITY
PAPERLESS SECURITY
USER FRIENDLINESS
EASE OF ACCESS
AFFORDABILITY

53.  This is a newspaper cutting on the
accounting errors that happened
once.

54.  This graph depicts the picture of
environment management accounting
systems.

55.  This image shows the
various modern accounting
systems.

56.  DIFFERENCE BETWEEN TRADITIONAL AND
MODERN ACCOUNTING:
TRADITIONAL
ACCOUNTING
MODERN ACOUNTING
Calculations are performed manually
/ physically.
Calculations are performed by
computers.
Slow speed Faster
Original entry Database
Backup is not possible. Backup is possible.

57.  This image shows the view of
an accounting journal entry.

58.  This picture shows the
various types of graphs and
charts used in accounting
system.

59.  CONCLUSION:
• Accounting has the character of users’ acceptability for decision making.
• It influences the behavior of its users. SO it is a behavioral process.
• It is an integrated part of behavioral sciences.
• There is always the scope for research and development in accounting.