IBS Hyderabad (Academic Year 2025-2026)
Course Handout
Program : BBA
Course Code :
Course Title : Fundamentals of Accounting Semester: III
Faculty Name : Dr. Gattaiah Tadoori Room No: 108 (F Wing)
Consultation Hours : Wednesday / Thursday 4.00 PM to 5. 00 PM. Mobile No. 8143080807
(Day/time) Email: [email protected]
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Course Description:
This course is designed to provide students with basic knowledge in accounting theory and practice. The
implementation of the Accounting Process, the Golden Rules of Accounting, and the upkeep of subsidiary
books are covered in this course. Depreciation and Inventory Valuation using various methods are also a
part of this. It connects the dots between accounting theories and the generation of financial statements for
sole proprietorship businesses and companies. The course will develop the student’s ability to identify and
appreciate the differences in the process and preparation of the financial statements for the two types of
business houses.
Course Objectives:
At the end of the course, students are expected to:
To understand, appreciate, and acquire knowledge of accounting concepts.
● To understand the process of accounting and the accounting cycle from the primary records to financial
statements.
● To record transactions and prepare financial statements for sole traders.
● To analyze and relate the financial statements of a sole proprietor business with those of a company.
● To understand accounting treatment relating to inventory and depreciation.
Expected Learning Outcomes: (use action verbs)
Upon successful completion of the course, the student will be able to:
Demonstrate understanding of the fundamental knowledge of accounting
Identify and apply the various accounting concepts and conventions to the businesses
Understand the process of accounting and the accounting cycle
Review and analyze the process of recording financial transactions
Develop proficiency in inventory valuations and depreciation estimations
Prepare and analyze financial statements of sole traders and companies
Syllabus:
Module-I: Basic Concepts of Accounting - 4 Sessions
Meaning and Definition of Accounting, Types of Accounting Information, Objectives of Accounting,
Accounting concepts and conventions, Cash and Accrual Systems of Accounting, Concept of Capital and
Income, Financial statements, Form and Content, Users of Financial Statements, Accounting and Reporting
Standards.
IBS Hyderabad (Academic Year 2025-2026)
Module– II: Accounting Mechanics- 10 Sessions
Introduction to Accounting mechanics, Debit and Credit, Identification of Transactions, Types of Accounts,
Golden Rules for Accounts, Recording of Transactions in Journal, Mechanisms of Posting in Ledger, Ledger
accounts, and Balancing of ledger accounts.
Module– III: Subsidiary Books - 6 Sessions
Meaning and types of Subsidiary Books, Purchase Day book, Sales Day book, Purchase returns book, Sales
returns book, Bills receivable book, Bills payable book, Cash Book, Types of Cash Books, Journal Proper
and General Journal
Module-IV: Preparation of Trial Balance – 4 Sessions
Introduction, Objectives of Drawing up a Trial Balance, Construction of a Trial Balance, Errors disclosed
by a Trial Balance, Errors not disclosed by a Trial Balance, Methodology of locating Errors, Correcting of
Trial Balance, Rectification of Errors.
Module– V: Accounting for Inventory - 5 Sessions
Inventory and relationship with Cost of Goods sold, Types of inventories like raw materials, work in
progress and finished goods, Methods of Inventory Valuation, Specific Identification method, weighted
average method (WAM), First-in- First-out (FIFO), Cost of Acquisition, Current Cost, Net Realizable Value.
Module-VI: Accounting of Fixed Assets – 5 Sessions
Understand the difference between tangible and intangible assets, necessity of depreciation, Capitalization
versus expensing, Methods of Depreciation, Straight Line method, Diminishing Balance method,
implication of changes in the method of depreciation.
Module- VII: Preparation of Financial Statements – 7 Sessions
Overview of adjustment entries, Inventory, Bad Debts, Provision for Bad and Doubtful debts, Depreciation,
Preparation of Trading Account and Profit and loss account from the Trial balance, Balance Sheet, Link
between Trial Balance, Profit and Loss statement and Balance sheet, Limitations of Financial Statements.
Module–VIII: Company Accounts – 7 Sessions
Form and contents of financial statements of Companies, preparation of financial statements as per Schedule
III of Companies Act, Statement of Profit and Loss, Balance Sheet and Adjustment Entries, Cash Flow
Statement, Statement of Changes in Equity.
Recommended Text Books:
Modern Accountancy - A Mukherjee & M Haniff – Vol I, Tata McGraw Hill Education Private Ltd,
2nd Edition
Suggested reference books:
P.C. Tulsian, Financial Accounting, Pearson Education, 11th Edition.
S N Maheshwari, Sharad K Maheshwari & Suneel K Maheshwari, Financial Accounting, Vikas
Publications, 5th Edition
Jae Shim, Schaum's Financial Accounting, McGraw-Hill; 2nd Edition.
IBS Hyderabad (Academic Year 2025-2026)
Course Outline
Case/Reading
Session
Topic Learning Outcomes article/Lecture
No. /Activity
Basic Concepts of Accounting: Meaning and Recall the purpose of preparation of financial statements
Definition of Accounting, Types of Accounting including the income statement and balance sheet
1-2 Information, Objectives of Accounting, Cash and Recognize the qualitative characteristics of financial Theory
Accrual Systems of Accounting, Concept of Capital statements
and Income Demonstrate understanding of the accounting cycle
Accounting concepts and conventions: Accounting Identify and explain the Accounting Concepts governing
concepts and conventions, financial statements, the preparation of Balance Sheet, Income Statement and
3-4 Theory
Form and Content, Users of Financial Statements, Cash Flow Statement
Accounting and Reporting Standards Describe the process of preparing financial statements
Accounting Mechanics: Accounting equation - List out the fundamental principles of accounting,
double entry system- concept of capital and income-
including the accounting equation and double entry
5-7 expenditure and losses- debit and credit- system Problems
Analyze financial transactions by applying basic terms
Identification of Transactions, types of accounts-
golden rules of double entry book keeping and rules of double entry book keeping
Demonstrate the ability to write journal entries
Books of Entry: Recording of Transactions in accurately based on given transaction
Journal, Mechanics of Posting in Ledger, Ledger Apply the process of posting transactions into ledger
8-13 Problems
accounts, Balancing of ledger accounts. accounts
Relationship between Journal and Ledger Master the skill of balancing ledger accounts ensuring
accuracy of recorded transactions
14 Pre-mid-term Assessment
Develop an understanding of primary books of accounts,
Subsidiary Books: Meaning and types of Subsidiary
including their types and purposes
Books, Purchase Day book, Sales Day book,
Recognize the importance of preparing separate books
Purchase returns book, Sales returns book, Bills
15-20 for various financial activities Problems
receivable book, Bills payable book, Cash Book,
Types of Cash Books, Journal Proper and General Describe the utility and structure of specialized
Journal accounting books for purchases, sales, returns, cash,
petty cash, etc.
IBS Hyderabad (Academic Year 2025-2026)
Trial Balance: Introduction, Objectives of Drawing Gain proficiency in preparing a trial balance accurately,
up a Trial Balance, Construction of a Trial Balance, ensuring arithmetical accuracy of the accounting records
Errors disclosed by a Trial Balance, Errors not Recognize the significance of trial balance in detecting
21-24 Problems
disclosed by a Trial Balance, Methodology of errors and verifying the integrity of financial data
locating Errors, Correcting of Trial Balance, Describe the role of trial balance in facilitating the
Rectification of Errors preparation of financial statements
Mid Term Examination
Gain an understanding of pricing mechanisms like
Accounting for Inventories: The concepts of FIFO, WAM in inventory management
inventory accounting, pricing of issues, stores ledger Analyze the impact of, FIFO, WAM on the income
25-29 Problems
preparation, inventory pricing methods FIFO, LIFO, statement
Weighted Average Methods (WAM) Evaluate the impact of FIFO, WAM on the balance
sheet
Recall the concept of wear and tear for capital assets and
Accounting for Depreciation: Difference between the importance of depreciation
tangible and intangible assets, necessity of Comprehend different methods of depreciation like
Depreciation, capitalization versus expensing, straight line method and diminishing balance method
30-34 Problems
methods of Depreciation, straight line method, Analyze the impact of depreciation methods on income
diminishing balance method. statement
Evaluate the impact of depreciation methods on balance
sheet
35 Post-mid-term Assessment
Preparation of Financial Statements for Sole
Proprietor: Overview of adjustment entries,
Inventory, Bad Debts, Provision for Bad and Gain the ability to prepare the final accounts of a sole
Doubtful debts, Depreciation, Preparation of Trading proprietor business, both with and without adjustments
36-41 Problems
Account and Profit and loss account from the Trial Analyze the impact of adjustments on the net profit and
balance, Balance Sheet, Link between Trial Balance, assets position of the business
Profit and Loss statement and Balance
sheet, Limitations of Financial Statements
IBS Hyderabad (Academic Year 2025-2026)
Company Accounts: Form and contents of financial Develop an understanding of the differences in the
statements of Companies, preparation of financial process and preparation of the financial statements
statements as per Schedule III of Companies Act, between Companies and sole proprietorship businesses
42-48 Problems
Statement of Profit and Loss, Balance Sheet and Differentiate between the financial statement formats
Adjustment Entries, Cash Flow Statement, and and disclosures for companies and sole proprietorship
Statement of Changes in Equity businesses
Evaluation Components
The evaluation components for Fundamentals of Accounting are as follows
1 Pre-Mid Term Evaluation 20% (5% allocated to class participation)
2 Mid Term Evaluation 40%
3 Post-Mid Term Evaluation 20% (5% allocated to class participation)
4 End Term Evaluation 40%
