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FC UNIT 2

key points on book-keeping, accounting, objectives, types of accounts, and differences between financial, cost, and management accounting.<br> - Importance of understanding the distinctions for better financial management.<br>

DrMuthuselvi
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FC UNIT 2

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  1. FUNDAMENTALS OF COMMERCEUNIT – IIBook-Keeping and Accounting Dr.N.Muthuselvi.,M.Com.,MBA.,M.Phil.,Ph.D.,B.Ed., Assistant Professor, Department of Commerce, Mangayarkarasi College of Arts and Science for Women

  2. Book-Keeping Meaning: The process of recording financial transactions systematically and in order. Definition: Book-keeping is defined as the recording of financial transactions and events in an orderly manner.

  3. Objectives of Book-Keeping • Accurate and complete record of all financial transactions. • - Facilitates the preparation of financial statements. • - Helps in maintaining permanent records for future reference. • - Assists in controlling finances and planning

  4. Accounting - Meaning and Definition Meaning: The process of recording, classifying, summarizing, and interpreting financial information. Definition: Accounting is the systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting, and communicating financial information.

  5. Objectives of Accounting - To provide financial information to stakeholders. - To ascertain the financial position of the business. - To facilitate decision-making. - To comply with legal requirements. - To aid in planning and controlling business activities.

  6. Types of Accounts Personal Accounts: Deals with individuals, firms, and companies. Real Accounts: Deals with assets. Nominal Accounts: Deals with expenses, losses, incomes, and gains.

  7. Financial Accounting Meaning: Focuses on preparing financial statements for external users. Features: - Records financial transactions and summarizes them in financial statements - Adheres to Generally Accepted Accounting Principles (GAAP) - Used by external stakeholders

  8. Cost Accounting Meaning: Focuses on recording, classifying, and analyzing costs associated with production. Features: - Helps in cost control and cost reduction. - Provides detailed cost information to management. - Used internally by management for decision-making.

  9. Management Accounting Meaning: Involves preparing management reports and accounts that provide accurate financial and statistical information to managers. Features: - Focuses on internal reporting - Helps in strategic planning, budgeting, and performance evaluation - Not regulated by GAAP or other external standards

  10. Differences Between Financial, Cost, and Management Accounting

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