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Accounting For Management: Assignment Topics

This document provides an overview of accounting concepts and terms, accounting conventions, and the interrelationships between financial, management, and cost accounting. It includes: 1. Definitions of key accounting terms like transactions, equity, assets, liabilities, debtors, and creditors. 2. Explanations of important accounting concepts like the entity, money measurement, going concern, cost, and accrual concepts. 3. Details on accounting conventions regarding consistency, full disclosure, materiality, objectivity, and conservatism. 4. A comparison of the objectives, nature, and use of precision between financial, management, and cost accounting. 5. A sample balance sheet for a prominent Indian

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Gourav Gupta
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0% found this document useful (0 votes)
102 views12 pages

Accounting For Management: Assignment Topics

This document provides an overview of accounting concepts and terms, accounting conventions, and the interrelationships between financial, management, and cost accounting. It includes: 1. Definitions of key accounting terms like transactions, equity, assets, liabilities, debtors, and creditors. 2. Explanations of important accounting concepts like the entity, money measurement, going concern, cost, and accrual concepts. 3. Details on accounting conventions regarding consistency, full disclosure, materiality, objectivity, and conservatism. 4. A comparison of the objectives, nature, and use of precision between financial, management, and cost accounting. 5. A sample balance sheet for a prominent Indian

Uploaded by

Gourav Gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Accounting for management

Assignment Topics:
1.Accounting terms..
2.Practicle implication of accounting concept and conventions..
3.Inter-relationship among finance,management and cost accounting?
Also make a financial statement of any lue chip company..
!"#$I%%&' %() !umitted
y)
$*. +I,A! -AI# Aditya gulati
#-./


A00("-%I-1 %&*$!)
.%ransaction : Any exchange of goods or services, for cash or on credit by
the business with any other business.

.(2ner ) Owner or proprietor is the person who invests money and bears all
the risks of the business.
.&3uity ) Euity means the claims against the assets of an enterprise or
rights in the assets of an enterprise.
.0apital ) !apital is total assets minus total liabilities.
.'ra2ings ) "rawings refer to cash, goods or any other asset withdrawn by
the owner from his business for his personal use.
.Assets ) Assets are properties and possessions owned by a business, which
benefits future periods like plant # machinery, cash, goodwill , furniture
etc.
.4iailities : $iabilities are outsider%s euity like bank loan, bank overdraft,
sundry creditors, bill payable etc.
.'etor : A debtor is a person who owes money to the business.
.'et ) The amount of a business transaction due from a person to the
business.
.1ood 'et ) &ood debt refers to a debt, which can be collected in full, and
there is no doubt about its recovery.
.#ad dets ) "ebt, which is irrecoverable. 'ad debt is a known loss to the
business.
.'outful 'ets ) A debt, the realisation or recovery of which is uncertain
or doubtful.
.0reditor) A creditor is a person to whom the business owes money.
.Purchases) &oods purchased by a business are called purchases.The
purchase of good may be cash purchases or credit purchases.
.!ales ) &oods sold by a business are called sales. The sales of good may be
cash sales or credit sales.
.Purchase *eturn ) &oods returned by a business to its suppliers out of the
purchases already made.
.!ales *eturn ) &oods returns to the business by its customer out of sales
already made to them.
.*evenue ) (evenue or income is the earning of a business from the sale of
goods or from the rendering of services to customers during an
accounting period.
.'eit ) "ebit means an entry on the debit side or left)hand side of an
account. The Amount owed by or due from an account or charged to an
account for the benefit received by that account.
.0redit ) credit means the amount owed to an account for the benefit given
by that account in the belief that its value will be returned at a later date.
*t means an entry on the right)hand side of an account.
P*A0%I0A4 I$P4I0A%I(-! (5 0(-0&P%! A-'
0(-+&-%I(-! )

A00("-%I-1) Accounting is a means of collecting,
summarising,
analysing and reporting in monetary terms, inform)
ation about the business.

A00("-%I-1 0(-0&P%!)
1. &ntity 0oncept ) *n accounting a business is treated as separate
entity. A business organi+ation is considered to be separate and distinct
from the owners, creditors, and others who control the business.
Example:,r (am purchased goods costing rs.-./// for the business.
This transaction relates to the business, so it will be recorded in
the books of the business.
2. $oney $easurement 0oncept ) According to this concept only
those transactions and events are to be recorded in the books of
accounts, which can be expressed in terms of money.
3. 1oing 0oncern 0oncept ) *t means that the enterprise will continue
to operate for an indefinitely long period in future and will not be
dissolved in the immediate future.
4. 0ost 0oncept ) The cost concept states that the assets and services are
recorded at their purchase cost and the accounting record should be
based on cost rather than on current market value.
5. *ealisation 0oncept ) This approach is followed by accountants
because there is no certainty of income until a sale has been made.
6. Accrual 0oncept ) The accrual concept recognises income when it is
earned rather than when it is collected.
7. Accounting Period 0oncept) This concept states that the expenditure
whose benefit will accrue over a long period should be appropriate
suitably over each year. The example of this concept is the
depreciation of the fixed assets.
6. $atching 0oncept ) This concept provides the guidelines as to how
the expenses be matched with revenues to find out profit or losses.
7. 'ual Aspect 0oncept) According to this concept of accounting,
every transaction or event has two aspects) receiving aspects and giving
aspects..
A00("-%I-1 0(-+&-%I(-!
8. 0onsistency ) There should be uniformity in accounting processes
and policies from one period to another. *t helps in preparation of
financial statement on reliable basis.

9. 5ull 'isclosure ) The financial statements must disclose all the
relevant and reliable information, so that the information may be
useful for the users.
10. $ateriality ) According to this convention only those events should
be recorded which have a significant bearing and insignificant things
should be ignored.
11. (8ectivity ) *t emphasises that accounting information should be
measured and expressed by the standards which are commonly
acceptable.
12. 5easiility ) *t emphasises that the time, labour and cost of analysing
accounting information should be minimum.
13. 0onservatism ) *t can be useful tool in situations of uncertainty and
doubt, but the abuse of this, can definitely lead to incorrect and
misleading statements.
*0TE((E$AT*O012*3 'ET4EE0 5*0A0!*A$,
,A0A&E,E0T A0" !O1T A!!O60T*0&
14. (8ect ) The ob7ect of 8financial accounting8 is to record various
transactions, to know the financial position and to find out profit loss
at the end of the financial year. On the Other hand, 8,anagement
accounting8 is essential to help management in formulating policies
and plans. The ob7ect of 8!ost accounting8 is to record the cost of
producing a product or providing a service.

15. -ature ) 95inancial accounting8 is mainly concerned with the
historical "ata. 4hereas in 8,anagement accounting8 pro7ected or
estimated figures are used. 8!ost accounting8 uses both past and
present figures.
3. Accounting Principles ) 95inancial accounts8 are governed by the
generally accepted principles and conventions. *n 8!ost accounting8,
certain principles and procedures are followed for recording costs of
different products. *n 8,anagement accounting8, no specific rules
and procedures are followed.

16. Precision ) *n 8,anagement accounting8 no emphasis is given to
actual 5igures. *n 85inancial accounting8 only actual figures are
recorded and there is no room for using approximate figures. *n 8!ost
accounting8 only those transactions are taken which can be expressed
in figures.
Thus, there is close relationship between financial, management and
cost accounting.
#lue 0hip India
#!&) .9-:9; -!&) '$6E!2*3 I!I-) *0E;.<'/-/=.
Industry ) 5inance )
*nvestments
#alance !heet ------------------- in *s. 0r. -------------------
,ar >/9 ,ar >/? ,ar >/. ,ar >/; ,ar >/<
-= mths -= mths -= mths -= mths -= mths
1ources Of 5unds
Total 1hare !apital --./; --./; --./; --./; --./;
Euity 1hare !apital --./; --./; --./; --./; --./;
1hare Application ,oney /.// /.// /.// /.// /.//
3reference 1hare !apital /.// /.// /.// /.// /.//
(eserves -.;; -.</ -.<= 9.=. 9..@
(evaluation (eserves /.// /.// /.// /.// /.//
0etworth -=.<= -=.<; -=.<@ -?.9- -?.;?
1ecured $oans /.// /.// /.// /.// /.-?
6nsecured $oans /.// /.// /.// /.// /.//
Total "ebt /.// /.// /.// /.// /.-?
Total $iabilities -=.<= -=.<; -=.<@ -?.9- -?.<@
,ar >/9 ,ar >/? ,ar >/. ,ar >/; ,ar >/<
-= mths -= mths -= mths -= mths
-= mths Application Of 5unds
&ross 'lock /.-< /.-< /.-< /.-<
/../ $ess: Accum. "epreciation /./9 /./?
/./? /./? /./< 0et 'lock
/.-? /.-9 /.-9 /.-9 /.?9 !apital
4ork in 3rogress /.// /.// /.// /.// /.//
*nvestments /.// /.// /.// /.//
/.// *nventories =.:; :.<;
--..: =;.=@ -=./= 1undry "ebtors
;.@? /.:? /.9/ /.-= /.-9
!ash and 'ank 'alance /.// /./. /./< /.:.
/.-@ Total !urrent Assets :.@/
-/.<. --.:; =<.9. -=.99 $oans and
Advances =.@9 -.:< -.@9 ?.<? 9.;9
5ixed "eposits /./- /./- /.// /./-
/./- Total !A, $oans # Advances -=.;? -=.<9
-9.<: 9=.-/ -..:< "effered !redit
/.// /.// /.// /.// /.//
!urrent $iabilities /.-9 /.-9 -.-9 -<.</
-.9@ 3rovisions /./- /./-
/./9 /.== /.=9 Total !$ # 3rovisions
/.-? /.-? -.-; -<.:= -.;-
0et !urrent Assets -=../ -=..: -=.;9 -?.-@
-?.9; ,iscellaneous Expenses /./@ /./.
/./= /.// /.// Total Assets
-=.<= -=.<< -=.<@ -?.9- -?.<:
!ontingent $iabilities /.=? /.=? /.// /.=?
/.=? 'ook Aalue B(sC =.9/ =.9-
=.9- =..: =.;.
#!&) .9-:9; -!&) '$6E!2*3 *euters) 0.A 0.A

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