INQUIRY TRAINING MODEL

WELCOME

UNIT :INTRODUCTION

OF ACCOUNTING

ACCOUNTINGAccording toe the American Institute

of Certified Public Accountants(AICPA)

“Accounting is an art of recording,classifying,and summarizing in a significant manner in terms of money transactions in part at least of a financial character and interpreting the results there of”

Recording

Classifying

Summarizing

Analysis and Interpretation

Communication

Maintained of record of business

Calculation of profit or loss

Depiction of financial position

Making information various group

Explain the Accounting,Definition,Function,and

Objectives.

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TYPES OF ACCOUNTING

INFORMATION

Accounting information can be classified on the basis of the users of such information.

INVESTORS

LENDERS

MANAGEMENT

EMPLOYEES

SUPPLIERS

CUSTOMERS

Investors are the suppliers of finance. Financial statement and financial reports constitute the

end product in the accounting process .

Lenders are the banks and financial institutions and other individuals who have supplied funds

to the business.

Accounting information helps the manager for planning and controlling the operations

of the business.

Accounting information is very helpful to the users for understanding financial position of the firm.

Financial reports gives vital information on utilization of fund and financial health.

Government require information to regulate business practices, implement policy. initiatives

charge appropriate taxes etc.

State the types of accounting information required by long term lenders.

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UNIT :INTRODUCTION OF

ACCOUNTING

RELIABILITY

RELEVANCE

UNDERSTANDABILITY

COMPARABILITY

Accounting information should reliable

Accounting information should be available in time and must be right

Accounting information should be understandable to the users

Accounting information should be comparable for a period of time between two or more entities

Ram are a senior accountant of Saravana Enterprises Ltd what three steps would you take your company's financial

statements understandable and decision useful

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UNIT :INTRODUCTION

OF ACCOUNTING

Accounting is an Information system which receives data inputs, processes the same and

gives its output in the form of information.

Accounting includes book keeping as its preliminary function. Book keeping consists of

recording transactions.

DIFFERENCE BETWEEN

BOOK KEEPING AND ACCOUNTING

BOOK KEEPING ACCOUNTING

The objective of book keeping is to prepare original books of accounts

It has limited scope

It is restricted to clerical work of recording transactions

Book keeping has to depend on accounting for making the accounting records

The objective of accounting is to record analysis and interpret the business transaction

It has wider scope

It is concerned with lower level, medium level and top level management

Accounting has to depend on book keep in for getting the records

Explain the difference between Book keeping and Accounting.

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