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Introduction of Book keeping & Accountancy
Point of discussion…
Meaning & Definition of Book - Keeping
Features of Book - keeping
Objectives of Book - keeping
Meaning & Definition of Accountancy
Branches of Accounting
Basic accounting Terminologies
Meaning & Definition…
Book keeping is a process of recording business transitions in the books of accounts in a very systematic manner
According to J.R. Batilobi : “ Book – Keeping is an art of recording business dealings in a set
of books.”
According to Nocth Cott : “ Book – Keeping is an art of recording in the books of accounts
the monetary aspects of commercial or financial transactions.”
Features of Book keeping
1、 It is the process of recording business transition
2、Monetary transactions are only recorded
3、 Recording is made in given set of books of accounts
4、 For specific period
5、 Art of recording business transactions scientifically
Objectives of Book keeping …
Permanent record
To know the P&L
To know the total amount of Capital
To know the total assets and liabilities
To know the progress of the business
To know Legal requirement and tax liabilites
Meaning & Definition of Accountancy
Accountancy includes Book keeping & classifying, summarizing and interpreting of the business transactions.
According to Kohler : “ Accountancy refers to the entire body of theory and process of
accounting.”
According to Robert N. Anthony : “ Nearly every business enterprise has an accounting system. It is
a means of collecting, summarizing, analyzing and reporting in monetary terms information about the business transactions,”
Branches of Accounting
Financial Accounting Cost Accounting Management Accounting
Journal Ledger Trial balance Final accounts
Cost Sheet Job & Contract Process Costing Operating Costing
Ratio analysis Break even point Standard Costing Analysis of financial S
Basic accounting Terminologies
Business Transaction
Entry & Narration
Goods
Profit & Loss
Assets, Liabilities & Net worth
Capital & Drawing
Expenditure and types of expenditure
Discount
Good will
Bad debts
Debtors and creditors
Solvent & Insolvent
Accounting Year
Folio, Insurance, Freight Deposit
Business Transaction
Any dealing of business that involves buying and selling of goods and services in exchange of value be called as business transaction.
Cash Transaction Credit Transactions
Entry : Recording of transaction in the proper form or method in the books of accounts is called an entry. It is a first record of any business transaction in the books of accounts
Entry, Narration & Goods
Narration : A brief explanation of the business transaction for which an entry is passed is called as a narration. It starts with a word ‘Being’ (….)
Goods: The commodities or articles in which the trader deals are called as goods for that business
Profit : Excess of income over the expenses during the accounting year is called a profitEx:…..
Profit & Loss
Loss : Excess of expenses over the income is called lossEx:…..
Assets, Liabilities & Net worth
Assets : Property of any kind owned by a businessman is called an asset, Ex……
Liabilities : Total amount payable by the business to others is known as liability Ex…..
Net Worth or owned equity : The amount of fund provided by the proprietor in the business is called as net worth or capital also
Types of Assets
Assets : Property of any kind owned by a businessman is called an asset, Ex……
Fixed Assets : Ex…..
Current Assets : Ex…..
Fictitious Assets : Ex…..
Accounting principles are those rules which are to be adopted by the accountants
Accounting concept
Accounting is the language of business. This are general guidelines for sound accounting practices
1) Reliable financial statements
2) Generally acceptable basis of measurement
3) Valid and appropriate assumptions
4) Uniformity in presentation
5) Valid and appropriate assumptions
6) Proper information to all
Accounting concepts1) Business entity
2) Money measurement
3) Cost concept
4) Consistency concept
5) Conservatism
6) Going concern
7) Realization
8) Accrual
9) Dual aspect
10) Disclosure
11) Materiality
12) Revenue recognition principle
13) Marching principle
14) Accounting standards
Double entry book system
Study of double entry book – keeping system
Methods of recording accounting information
Definition of double entry system
Principle & Advantages of DES
Conventional Accounting System
Account and it’s Classification
Debit & Credit
Rules of Accounts & rules of Debit credit
Analysis of Transactions
Italian Merchant “ Luca D Bargo Pacioli” in 1949
Double Entry book system
There are two aspects of every business transactions.
Receiver
Giver
Recording dual aspects of business transactions in the books of accounts in
terms of Debit & Credit is known as “ Double Entry System of Book –
Keeping”.
Methods of recording DES
Indian Style
Single Entry System
Double Entry System
Every business transaction has a two fold effect and that it affects two
accounts in opposite directions and if acomplete record is to be made of
each such transaction it would been necessary to debit one account and
credit another account. It is this recording of two fold effect of every
transaction that has given rise to the term double entry” – J.R. Batliboi
Definition of Double Entry System
Principles of DES
Minimum Two aspects
Two accounts
One is receiver and other is giver
One account is debited the other account must be….
Advantages of DES
1) Accuracy
2) Business Result
3) Complete Record
4) Comparative study
5) Common acceptance
Classifications of Account
Analysis of Transactions
Point of discussion…
Introduction, Meaning & specimen
Voucher – internal & external voucher
Cash & Petty cash voucher
Cash and credit memo
Receipt
Debit and credit note
Pay – in – slip
Withdrawal slip
Cheque
Bank pass book, Bank statement & Bank advice
Introduction
The document required for recording of transactions in the books of accounts are called as sources of documents.
This document is the legal proof of the transaction which is recorded in the books of accounts.
The accountant should confirm that every entry made is supported by sources documents.
The document is the base of passing the entry.
Voucher – Internal & External
Voucher : Voucher is a documentary evidence in support of a business transacting.like cash Expenses, purchases or sales etc.
It is used as a support for ascertainment of profit in transaction
It helps the auditor to perform his duties
It confirm the date of transaction, the amount and the person details
It describe the nature of transaction
Journal Voucher
Journal Voucher is basic / original Voucher
Cash Voucher
Petty cash Voucher
Cash memo
Credit memo
Receipt
Debit note / credit note
Pay in slip
Withdrawal slip
Cheque
Types of Cheque
Bank advice
In details…
