nature and purpose of accounting pdf

0000004260 00000 n A slice of bread or a bicycle are real economic goods; a �2��b'�bI�r�%��x��/�R��6\Y�*��n��]�FZ�z�_��5��Ȓ4R=��G��,��m͕f��>SJ�� X�Dh0ʊ��I��Ħ�,�Z�A��R��0UЙ��(2��6��W"N�H�Y L��0+��C=eNa��b�� oc�P�f�@H'e��3�-5>IX�,�U�o�*:�`CS c_�}]�r��0��/i�[��s�'�&@�q��$s��Iʚ (|��yb��Ѷ#��v�K��hq k"�9R��%½R�+.} From an accounting point of view, there are two kinds of goods. 0000006390 00000 n Master Budget 7. The Nature of Business You are familiar with many large companies, such as General Motors, Barnes & Noble, and AT&T. xref 0000000596 00000 n Human Resource Budget 13. 2.2 The nature of Accounting Before the nature of Accounting can be addressed, the field of study must first be delineated. 0000006857 00000 n 5. 1.3 MEANING OF ACCOUNTING The main purpose of accounting is to ascertain profit or loss during a specified period, to show financial condition of the business on a particular date and to have control over the firm's property. tomers (you). %%EOF stream •The objective of financial accounting is to provide relevant and timely information for the decision-making needs of users outside of the business. Capital Expenditure Budget 10. Such accounting records are required to be maintained to measure the income of the business and communicate Real economic goods are on the asset side of one single balance sheet, while ﬁnancial goods appear in two balance sheets simultaneously: on the asset side of one balance sheet and on the liability-equity side of another one. 0000004117 00000 n 0000006634 00000 n %�� x��X}pT��y��}K��싁��)f `:�K�t%lH(��k]��F"�C� ��6` nature and purpose of Statements of Accounting Concepts. NATURE OF ACCOUNTING . �. 1234 0 obj <> endobj Accounting is art of recording, classifying, summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character and interpreting the results thereof. %PDF-1.5 Accounting is a systematic method consisting of definite techniques and its proper application requires applied skill and expertise. <>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 720 540] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Flexible Budget 8. 0000004404 00000 n financial accounting. 1248 0 obj<>stream 0000008778 00000 n 1.6 Accounting Personnel 1.7 Nature of Accounting Function 1.8 Organisation for Accounting and Finance 1.9 Summary 1.10 Key Words 1.11 Self-assessment Questions/Exercises 1.12 Further Readings 1.1 INTRODUCTION Accounting is often called the language of business. Cash Budget 11. endobj endobj Meaning of Budgeting 2. 1.3 Nature of Management Accounting 1.4 Functions of Management Accounting 1.5 Scope of Management Accounting 1.6 The Management Accountant 1.7 Management Accounting and Financial Accounting ... purpose the data is presented in a comparative form. Essentials 6. We conclude the chapter by discussing the role of accounting in business, including financial statements, basic accounting concepts, and how to use financial state-ments to evaluate a business’s performance. 0000004029 00000 n Nature of Accounting Standards: On the basis of forgoing discussion we can say that accounting standards are guide, dictator, service provider and harmonizer in the field of accounting process. Differentiate between external and internal users of accounting information. Describe the nature and purpose of accounting. The purpose of providing accounting information, as well as the qualitative characteristics of decision-useful information, is addressed. •General-purpose financial statements are one type of financial accounting report that is distributed to external users. Accounting systems also help to meet basic legal requirements detailing and documenting earnings and net revenue. 0000000016 00000 n <> �5))h��S'�ږQcS��?1j��Rk��L{ιo��?��{��;�snvE)Q�Ê�(�W�2��U��a]�V�ӿ+��ϡ(�?��5��{9go��˳1��{�V�;��g��=�>�gˌ��Y'{��C��x={�/�U�8��5�~�!�`�� qD[�^� ��wO+yJ��}�[�'V�>͚K.��U�� n1��Ή ��w�^�j��©�a~^/��ħ�'��n|�>��׊{��b��J?0��׈!1�U�_�xC�!��? trailer 2. It provides us with charts, tables, forecasts and various such analysis that makes the process of decision making easier and more justified. The Australian Securities and Investments Commission Act 2001, subsection 227(1)(a), provides that a function of the AASB is to develop a conceptual framework, not having the force of an accounting standard, for the purpose of evaluating proposed accounting standards and international standards. Accounting is means and not an end: Accounting finds out the financial results and position of an entity and the same time, it communicates this information to its users. The Nature of Accounting can be defined in two ways: Quantitative Attributes of Accounting; Qualitative Attributes of Accounting Process 4. 0 Nature of Budget 3. 3. 3. !��y��^w� ��ĝ��Ol�w�fޢ�$ŕ�|��G�l�*�Aͧ�� [=�w�Q�v��S��b�Hs��_6��Q��k�͞V�뮟��xJ�s�]5��w=��U�ݬ�_�R�!��c��X*>�֋G�z~��K�q�ܱܽK��o�Y�� G��uڍ�xI�C�M�_\��P��j7�gD��&N�&=�nbA��M��!��߭��Iz�PJ~��r�-�ҵ��k�q��ale�_�^`�,��Z��]��{�_`Z�ǬB�h�=7{~�e�d?��\3�g��7�WJ��z��ls��p=�oqOx�. 0000005885 00000 n For … <> State the function of accounting in a business. Although many business owners see accounting as a distasteful chore, a … So, by nature accounting is an art. Planning. In fact, it is the main purpose of it. ADVERTISEMENTS: (i) Serve as a guide to the accountants: Accounting standards serve the accountants as a guide in the accounting process. Give examples of branches of accounting. Research and Development Budget 9. <<50CA323976E5AE4A8A4E3AB745954844>]>> 7. 0000007164 00000 n 1234 15 Accounting is a process and a tool that provides important feedback about a company's financial health. 4 0 obj Revision of […] 0000005183 00000 n 6. startxref 0000007086 00000 n 0000008816 00000 n 1 0 obj Purposes 5. The basic function of any lan-guage is to serve as a means of communication. 2 0 obj Narrate the history/origin of accounting. x��V]��8}�?�G�4I�e��δ[v�� #'*+k;)��W�:�&3�7�m]I�9�~ �>��ջ�?_��w��x$A Define accounting. 3 0 obj Administering the Budget 14. In this form of accounting, we use techniques from all fields like costing, economics, statistics, etc. Read Costing – An Aid to Management here in detail. 4. %PDF-1.4 %�� Ratios are calculated and likely trends are projected. Budgeted Balance Sheet 12. ADVERTISEMENTS: In this article we will discuss about:- 1. They provide basis on which accounts are prepared. endobj In the conclusion the users of accounting information are identified and their needs summarised. <>>> Introduction to Accounting Learning Objectives 1. )��Zf�i ��и��ǣ��SX�㑂��bi�Lң�Ջ��޼�88I�D[��䉣ng�?$ �*<0�