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Acconting for Managers

Acconting for Managers. Prof. Shubhra Aanand. Evolution of Accounting. As other fields of human activities as Law, Medicine etc. It was not a chance response. It was a pragmatic response to a specific world need.

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Acconting for Managers

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  1. Acconting for Managers Prof. Shubhra Aanand

  2. Evolution of Accounting • As other fields of human activities as Law, Medicine etc. • It was not a chance response. • It was a pragmatic response to a specific world need. • It was practiced without a uniform methodology or any form of theory till 19thcentaury. • More comprehensive accounting information system in the 20th centaury. • New era of accounting.

  3. Different phases of accounting • Double Entry Book-Keeping • Enterprise Accounting • Government Accounting • Cost and Management Accounting • Social Accounting

  4. Definition • “It is an art of recording, classifying, and summarizing in a significant manner and in terms of money transaction and events which in part at least of a financial character, and interpreting results thereof.” AICPA(1941) • “Accounting is a process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information.” AAA(1966)

  5. Definitions • “Accounting is a service activity, its function is to provide quantitative information, primarily financial in nature and about the economic activities that is intended to be useful in making economic decisions.” AICPA (1970)

  6. User’s of Accounting Information • Managers and Management • Users with direct financial interest • Users with indirect financial interest

  7. Principal Financial Statements • Profit and Loss Accounts • Balance Sheet • Statement of Changes in Financial Position (SCFP)

  8. Accounting Basics • Accounting Postulates Basic assumption which are generally accepted as self evident truth. • Accounting Concepts The conceptual guidelines for application in the financial accounting process. • Accounting Principles These are man made and have evolved

  9. Financial Accounting Vs Cost Accounting • Nature • Primary Users of Information • Accounting method • Unit of measurement • Time span

  10. Financial Accounting Vs Management Accounting • Nature • Primary users of information • Accounting methods • Accounting principles • Unit of measurement • Time span • Purpose of Reporting • Nature of Data • Use of disciplines

  11. Accounting Postulates • Entity postulate • Going concern postulate • Money measurement postulate • Accounting period postulate

  12. Accounting Concepts and Principles • Cost Principle • Dual Aspect Principle • Accrual Principle • Conservatism Principle • Matching Principle • Consistency Principle • Materiality Principle • Full- Disclosure Principle

  13. GAAP & Accounting Standards • Financial Accounting follows a set of ground rules or accounting principles in presenting financial information which are known as generally accepted accounting principles. • Written statements issued from time to time by institutions of accounting professions.

  14. Simplified Summary Of Significant Differences between US GAAP, Indian GAAP and International Accounting Standards.

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