INTRODUCTION TO

ACCOUNTING
• FINANCIAL ACCOUNTING
• COST ACCOUNTING
• MANAGEMENT ACCOUNTING
• FINANCIAL MANAGEMENT
INTRODUCTION TO
ACCOUNTING
• FINANCIAL ACCOUNTING
• Meaning and Objectives
• Concepts and Conventions
• Concepts :-
• Separate Entity
• Double Entry
• Money Measurement
INTRODUCTION TO
ACCOUNTING
• Going Concern
• Accounting Period
• ACCOUNTING CONVENTIONS
• Conservatism
• Consistency
• Disclosure
INTRODUCTION TO
ACCOUNTING
• ACCOUNTING CYCLE
• Transaction
• Entry ---- Books of Prime Entry
• Books of Secondary

Entry
Trial Balance
Final Accounts
INTRODUCTION TO
ACCOUNTING
• FINAL ACCOUNTS
• Trading Account
• Profit and Loss Account
• Balance – Sheet
INTRODUCTION TO
ACCOUNTING
• Books of Prime Entry – Journal
• Steps :
• Identify the Accounts affected
• Classify the Accounts into
• Personal
• Real
• Nominal
INTRODUCTION TO
ACCOUNTING
• Apply the rules
• Personal – Debit Receiver
• Credit Giver
• Real – Debit what comes in
• Credit what goes out
• Nominal – Debit all expenses
and losses, Credit all incomes
and gains.
INTRODUCTION TO
ACCOUNTING
• Decide about Debit and Credit.
• Record the transaction in
Journal
• Post the transaction in Ledger
• Prepare Trial Balance by closing
ledger accounts.
Entry in Journal
• Commenced business with cash
Rs.25,00,000

• Cash A/c Capital A/c

• Real Personal
• Debit Credit
Entry in Journal
Particulars LF Dr. Cr.
Cash A/c ---- Dr. 25.00
To Capital A/c 25.00
[Being business
started]
Entry In Journal
Deposited cash in bank Rs.15 lakh

Bank A/c Cash A/c

Personal Real

Debit Credit
Entry In Journal

Bank A/c ---- Dr. 15.00

To Cash A/c 15.00
[Being cash
deposited in bank]
Entry In Journal
• Goods purchased for cash Rs.5 lakhs

Purchase A/c Cash A/c

Nominal Real
Debit Credit
Entry In Journal

Purchase A/c---Dr. 5.00

To Cash A/c 5.00
[Being goods purchased
for cash]
Entry In Journal
• Goods sold for cash Rs.9 lakhs
• Purchased furniture for Rs.6
lakhs and paid the money by
cheque
• Goods purchased from Venus
Traders for Rs.8 lakhs on credit
• Sold goods on credit to Trinity
Traders for Rs.10 lakhs
Ledger Posting
• Need of ledger posting
• Method of ledger posting
 Open all accounts appearing in
the journal entry
 Entry will be passed on the
debit side if the concerned
account is debited in the ledger
account.
Ledger Posting
 Entry will be passed on the
credit side if the concerned
account is credited in the
journal entry
 After passing all entries, the
ledger account is closed by
computing the difference
between the debit and side. It is
Ledger Posting
 called as the ‘balance’ of that
account. The balance is written
on the side, which is less than
the other. The balance is carried
down at the time of closing the
ledger account. It is brought
down at the time of opening the
account.
INTRODUCTION TO
ACCOUNTING
• Preparation of Final Accounts
• Trading A/C – Gross Profit/Gross
Loss
• Profit and Loss A/C - Net
Profit/Net Loss
• Balance – Sheet – Assets and
Liabilities
INTRODUCTION TO
ACCOUNTING
• No prescribed format for final
accounts of sole proprietorship
and partnership
• Prescribed format for final
accounts of Limited Companies
under Schedule VIth of
Companies Act, 1956
FINAL ACCOUNTS
• HORIZANTAL FORM
• VERTICLE FORM
Final Accounts
• Sources Of Funds
 Shareholders’ Funds
• Share Capital
• Reserves and Surplus
 Loan Funds
• Secured Loans
• Unsecured Loans
Final Accounts
• Application Of Funds
 Fixed Assets
• Gross Block
• Less: Depreciation
• Net Block
 Investments
 Current Assets, Loans & Advances
 Less: Current Liabilities
Final Accounts
 Miscellaneous Expenses and
Losses