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Finance
-By
-S.S. Barma
What is Accounting?
Identifying a business transaction
Preparation of Business Documents.
Recording of the transaction in the book of first
entry (Journal)
– Sales or Purchase Module
– Relevance with the banking operations
Posting in the ledger (Automatic in Software)
Preparation of Trial Balance (System Generated)
Preparation of Profit and Loss Account and
Balance Sheet
Important terms in accounting
Debtors
Creditors
Assets
Liabilities
Income
Expenses
Account
Important accounting
concepts
Dual Entity
Money Measurement Concept
Accounting Period Concept
Going Concern Concept
Conservatism Concept (Provisioning for NPA in
Banks)
Accrual Concept ( Accrual of interest income and
expenses in Banks)
Consistency Concept
Matching Concept
Process of Accounting
Types of business transactions
– Cash and credit
Double Entry Principle in Accountancy
– Debit and credit effect
Implications
Basic Categories of Accounts
– Personal, Real and Nominal
Golden Rules in Accounting
To identify the effect of a transaction on a account
there are rules:
–For Personal Account:
Debit: the receiver
Credit: the giver
Profitability ratio