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ACCOUNTING FOR MANAGERS

ACCOUNTING FOR MANAGERS. MODULE:1. THE FOUNDATION. CONCEPTUAL FRAMEWORK OF FINANCIAL ACCOUNTING. Why Accounting? ‘’Short pencil is better than a long memory’’ What is Accounting?

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ACCOUNTING FOR MANAGERS

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  1. ACCOUNTING FOR MANAGERS

  2. MODULE:1 THE FOUNDATION

  3. CONCEPTUAL FRAMEWORK OF FINANCIAL ACCOUNTING • Why Accounting? • ‘’Short pencil is better than a long memory’’ • What is Accounting? • The art of recording, classifying and summarizing in terms of money transactions and events of financial character and interpreting the results thereof. • Meaning of an Account? • It is a summary of relevant transactions at one place relating to a particular head.

  4. Types of Accounting

  5. Accounting Process

  6. Classification of Accounts

  7. Principles of Accounting • The rules and guidelines that companies must follow when reporting financial data are Principles. • Principles which have logic are called concepts. • Principles which we follow anyway are called conventions.

  8. PRINCIPLES OF ACCOUNTING

  9. PRINCIPLES OF ACCOUNTING

  10. JOURNAL ENTRIES AND LEDGERS What is a Journal Entry??? What is a Ledger The general ledger is the main accounting record of a business which uses double-entry bookkeeping. It will usually include accounts for such items as current assets, fixed assets, liabilities, revenue and expense items, gains and losses. Each General Ledger is divided into debits and credits sections. The left hand side lists debit transactions and the right hand side lists credit transactions. This gives a 'T' shape to each individual general ledger account. • A journal entry, in accounting, is a logging of transactions into accounting journal items. • The journal entry can consist of several items, each of which is either a debit or a credit. • The total of the debits must equal the total of the credits or the journal entry is said to be "unbalanced".

  11. Here are a few transactions which show how the entries are made in the Journal and Ledger • Started Business with Cash Rs.20000 • Building Purchased Rs. 8000 • Cash deposited in the Bank Rs.4000 • Goods Purchased Rs.2000

  12. LEDGER BALANCING

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