Accounting and Financial Management

Group Members: Azhar Khan Fauzia Khan Ahmad Farrukh Fatima Khatoon Arshiya Farooqui Inesh Rakhimbekova

IS A PROCESS OF IDENTIFYING, MEASURING, RECORDING, CLASSIFYING, SUMMARIZING & ANALYZING MONETARY TRANSACTIONS OF A BUSINESS.

TO KEEP SYSTEMATIC REPORT TO PROTECT BUSINESS PROPERTIES TO ASCERTAIN THE OPERATIONAL PROFIT AND LOSSES TO ASCERTAIN THE FINANCIAL POSITION OF BUSINESS TO FACILITATE RATIONAL DECISION MAKING

Accounting replace human memory Accounting helps in knowing profit Helps in knowing financial position of organization Helps in paying taxes Accounting helps in raising ore funds by supplying information to investors and creditors Helps in planning for expansion Helps in getting bank loan Accounting does not provide timely information Accounting ignores the importance of non monetary information Accounting does not provide detail analysis

the amount of money invested by an entrepreneur in its business from its own resources. all tangible and intangible things which can be converted into cash or which can fetch some money value at an point of time for the business. are assets which change over a long period of time usually more than 1 year e.g. Land, building, machine assets which can be converted into cash in a short period usually within 1 year. the amount borrowed from outsiders which has to be paid in future. amount paid for using services or for goods. expenses which are paid in advance but goods or services are not received yet. expenses which are not paid for yet but goods or services have been received. revenue or earning by a business income which is earned but not yet received. Income received In advance income which is not yet earned but received. those people from whom the goods/services have been purchased on credit and money has to be paid in future. those people to whom goods/services have been sold on credit and money has to be received in future.

DOCUMENTS, WHICH COMMUNICATE THESE FINDINGS ABOUT THE PERFORMANCE OF AN ORGANIZATION IN MONETARY TERMS. AN AMOUNT WITHDRAWN BY THE OWNER FROM THE BUSINESS FOR HIS PERSONAL USE.

ACCOUNTING EQUATION

RECORDING OF ONLY THOSE TRANSACTIONS WHICH CAN BE EXPRESSED IN MONETARY TERM.

A BUSINESS UNIT IS A SEPARATE ENTITY WITH ITS OWN IDENTITY AND IS DISTINCT FROM THE OWNERS OF THE ENTERPRISE.

AN ARTIFICIAL PAUSE TO PREPARE A FINANCIAL STATEMENT. ASSUMED THAT THE BUSINESS ENTITY WOULD CONTINUE TO OPERATE FOR AN INDEFINITELY LONG PERIOD IN FUTURE.

the assets/resources owned by the firm should be shown at the acquisition cost and not at their current market value. not to anticipate profits before they are actually realized but always recognize & provide for all probable future losses. expenses incurred/revenues earned should be considered as expenses/revenues of the same accounting period irrespective of it being paid or received in advance or is outstanding. Should be consistency in recording a specific item so that it ensures comparability over the years.

These accounts include accounts related to persons, debtors, creditors. Eg. The account of XYZ company. Dr. THE RECEIVER Cr. THE GIVER These are the accounts which relate to the assets such as machinery account, land and building accounts, etc. Dr. WHAT COMES IN Cr. WHAT GOES OUT These are the accounts related to income, expenses, gains &losses. E.g. Wages paid account, purchases account, sales account etc. Dr. EXPENSES &LOSSES Cr. INCOMES &GAINS