basics of accounting and concepts of acc

basics of accounting

1. BASICS OF ACCOUNTING Presented By: Dr. Manjula Shukla Assistant Professor SSSVS GPGC, Chunar, Mirzapur

2. Introduction to Accounting Definition of Accounting The process of recording, summarizing, and reporting financial transactions. Purpose of Accounting To provide financial information for decision-making. Importance of Accounting Decision Making Financial Management Compliance and Reporting Performance Evaluation

3. Key Accounting Principles Accrual Basis vs. Cash Basis Accrual: Revenue and expenses recorded when earned/incurred. Cash: Transactions recorded when cash is exchanged. Consistency Relevance Reliability

4. The Accounting Equation Equation: Assets = Liabilities + Equity Explanation of Components Assets: Resources owned by a business. Liabilities: Obligations or debts owed. Equity: Owner’s residual interest in the assets.

5. Financial Statements Overview Balance Sheet Snapshot of assets, liabilities, and equity at a specific point in time. Income Statement Summary of revenues and expenses over a period. Cash Flow Statement Analysis of cash inflows and outflows.

6. Double-Entry Accounting Concept Every transaction affects at least two accounts. Example Buying inventory: Debit Inventory, Credit Cash/Accounts Payable.