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Financial Accounting

Financial Accounting

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Financial Accounting

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  1. Financial Accounting

  2. Evaluation Criteria • Semester End Examination – 60 Marks • Attendance/Participation/Work Sheets – 10 Marks • Class Test – 15 Marks • Presentations – 15 Marks

  3. Topics • Framework of Financial Accounting • Financial Statements • Fixed Assets and Depreciation Accounting • Inventory Valuation • Ratio Analysis • Inflation Accounting • Basics of Auditing

  4. Reference Books • Financial Accounting – S.N. Maheshwari • Financial Accounting, A Managerial Perspective – R Narayanaswamy • Financial Accounting – The ICFAI University

  5. Presentations • Industry Analysis • Introduction of the Sector • Major companies in the Sector • Market Share of various companies • Past trend of the sector – 5 years • News related to the Sector • Future of the Sector Presentation should not exceed 15 mins.

  6. Specialized Areas of Accounting • Financial Accounting • Cost Accounting • Management Accounting • Social Responsibility Accounting

  7. Financial Accounting • Recording, classifying and summarizing of past events & transactions • Historical in nature • Facts & figures • Preparation of Financial statements

  8. Cost Accounting • It shows classification & analysis of costs on the basis of functions, processes & products. • It deals with cost computation, costs saving, cost reduction.

  9. Management Accounting • Uses data generated in Financial & Cost Accounting. • Data used for managerial decision making.

  10. Social Responsibility Accounting It involves : • Accounting for social costs • Accounting for social benefits created & reporting thereof

  11. What is Financial Accounting According to the American Institute of Certified Public Accountants “The art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character & interpreting the results thereof”.

  12. Accounting Process Identification of Transactions & Events Recording of Transactions in a Journal Posting of Journal Entries in Ledger Summarize by preparing Trial Balance, Profit/Loss A/C, Balance Sheet Analyze and Communicate the results to Users

  13. Trial Balance is prepared at the end of the financial year Preparation of Financial statements from Trial Balance • Profit & Loss Account • Balance Sheet

  14. Users of Financial Statements • Owners • Managers • Investors • Creditors & Financial Institutions • Employees • Government • Customers • Public

  15. Regulatory Bodies • Ministry of Corporate Affairs  • ICAI • SEBI • CBDT • RBI • International Accounting Standards Board

  16. Accounting Standards

  17. Accounting Standard – 1

  18. Disclosure of Accounting Policies Accounting policies refer to the specific accounting principles and the methods of applying those principles adopted by the enterprise in the preparation and presentation of financial statements.

  19. MAJOR CONSIDERATIONS GOVERNING THE SELECTION AND APPLICATION OF ACCOUNTING POLICIES • Prudence • Substance over form • Materiality

  20. 3 FUNDAMENTAL ACCOUNTING ASSUMPTIONS • Going Concern • Consistency • Accrual