Scribd Logo
Upload

Welcome to Scribd!

  • 26 views

    Basics of Accounting-1

    Uploaded by

    siva prasad
    This document provides an introduction to basic accounting concepts and terminology. It defines key terms like capital, assets, liabilities, revenue, expenses and gains. It also discusses the different types of business organizations and how they are classified based on ownership, management control, liability and legal registration. The accounting equation of Assets = Equity + Liabilities is introduced to demonstrate how business transactions affect the equation. Examples are provided to illustrate the impact of events like starting a business, purchasing inventory, paying expenses and having revenue or losses.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd

    Basics of Accounting-1

    Uploaded by

    siva prasad
    26 views27 pages
    This document provides an introduction to basic accounting concepts and terminology. It defines key terms like capital, assets, liabilities, revenue, expenses and gains. It also discusses the different types of business organizations and how they are classified based on ownership, management control, liability and legal registration. The accounting equation of Assets = Equity + Liabilities is introduced to demonstrate how business transactions affect the equation. Examples are provided to illustrate the impact of events like starting a business, purchasing inventory, paying expenses and having revenue or losses.

    Original Description:

    Accounting for managers

    Copyright

    © © All Rights Reserved

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document provides an introduction to basic accounting concepts and terminology. It defines key terms like capital, assets, liabilities, revenue, expenses and gains. It also discusses the different types of business organizations and how they are classified based on ownership, management control, liability and legal registration. The accounting equation of Assets = Equity + Liabilities is introduced to demonstrate how business transactions affect the equation. Examples are provided to illustrate the impact of events like starting a business, purchasing inventory, paying expenses and having revenue or losses.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    26 views27 pages

    Basics of Accounting-1

    Uploaded by

    siva prasad
    This document provides an introduction to basic accounting concepts and terminology. It defines key terms like capital, assets, liabilities, revenue, expenses and gains. It also discusses the different types of business organizations and how they are classified based on ownership, management control, liability and legal registration. The accounting equation of Assets = Equity + Liabilities is introduced to demonstrate how business transactions affect the equation. Examples are provided to illustrate the impact of events like starting a business, purchasing inventory, paying expenses and having revenue or losses.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 27

    Basics of Accounting

    By
    Mr. Abhaya Kumar Muduli

    Introduction

    Accounting ?

    Important terminology

    Capital (Equity Capital and debt capital)


    Assets
    Liabilities
    Drawings
    Cost (Expired Cost and unexpired cost)
    Expenses
    Loss
    Income/Gain

    Revenue
    Inflows or other enhancements of assets of an entity
    or settlements of its liabilities ( or a combination of
    both) from delivering or producing goods, rendering
    services, or other activities that constitute the
    entitys on going major or central operation.
    Revenue result in increase in owners equity but not all
    increase in owners equity arise from revenues.
    Ex- Investment by shareholders causes equity to rise,
    but it is not revenue
    All increase in assets are not revenues
    Ex- purchase of office supplies on credit increases
    assets and liabilities but does not result in revenue

    Expenses
    Out flows or other using up assets or incurrence
    of liabilities (or combination of both) from
    delivering or producing goods, rendering services,
    or other activities that constitute the entitys on
    going major or central operation.
    Expenses result in decreases in owners equity
    along with either decreases in assets or increases
    in liabilities. But not all decreases in equity or
    increases in liabilities results from expenses
    Ex- dividends or withdrawals by owner cause
    equity to fall, but they are not expenses.

    Gains
    Gains are increases in equity from
    peripheral or incidental transactions
    and events
    Ex- Gain on sale of Investment
    Ex- Gain on sale of used equipment

    Business & Capital


    A factor of production
    Finance
    Equity (Risk) capital- residual claim on
    profit and return of capital
    Debt Capital

    Firm and capital


    A liability business entity concept
    Owners: risk- right to manage and own
    Debt: right to protect investmentsubject to credit risk default in
    interest payment and return of capital
    Free capital: creditors, advance from
    customer

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    Business and organization


    Sole Proprietorship

    Partnership

    Company

    Owner

    Sole proprietor

    Partners

    Shareholders

    Number of
    Owners/
    Shareholders
    Management
    Control

    One Person

    Minimum: 2 Maximum: Minimum: 2/7


    10/20
    Maximum: 200/No
    Limit
    Partners
    Board of Directors

    Proprietor

    Liability
    Unlimited
    Legal Registration No Provision

    Unlimited
    Voluntary

    Limited
    Compulsory

    Flexibility
    Source of Equity
    Funds

    Depends on Partners
    Partners bring in the
    funds

    Comparatively Less
    Shareholders bring
    in the funds

    Maximum
    Proprietor Brings in
    the funds

    Cont..

    Debtor
    Creditor
    Discount
    Trade discount Vs. cash discount

    23

    Accounting Equation

    Equity = Assets - Liabilities

    24

    Effect of transaction
    on
    Accounting Equation
    a.

    Mr.
    Surendra
    Kumar
    starts
    a
    merchandising business named as Surendra
    Enterprise(SE), on January 1, 2011 with
    investment of Rs. 1,00,000 in Cash. He
    approaches a bank for loan of Rs 1,00,000.
    The bank Agrees to the proposal and lends
    Rs 100000 to the firm.
    25

    Cont..
    b. SE purchases goods (stock in trade) for Rs
    50,000.
    c. SE paid Rs. 1000 towards cartage to bring the
    goods to the place of business (known as carriage
    in ward)
    d. SE paid Rs. 3000 towards wages.
    e. SE sold the goods costing Rs. 30,000 for Rs.
    60,000.
    f. Rs 20,000 cash was stolen from SE . There is no
    insurance covering for such losses.

    26

    THE END
    THANK YOU

    27

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy