ACCOUNTANCY Made Easy
For Plus 1Class
Learning
RAM’s
Center
ACCOUNTANCY Made Easy
For Plus 1Class
Chapter 1-
Part I
RAM’s Learning
CHAPTER -1
INTRODUCTION TO ACCOUNTING
In Chapter One we mainly try to
• Learn meaning and need of accounting
• Understand accounting as a source of information
• Identify the internal and external users of
accounting information
• Explain the objectives of accounting
• Describe the role of accounting
INTORODUCTION to Business & Accounting
Different forms of Business and
relevance of Accounting
Common forms of business
1. Simple Selling
2. Shops & stalls
3. Trading firms
4. Manufacturing firms
5. Firms Providing Services
Simple Sales
INTORODUCTION to Business & Accounting
Different forms of Business and
relevance of Accounting
Common forms of business
1. Simple Selling
2. Shops & stalls
3. Trading firms
4. Manufacturing firms
5. Firms Providing Services
Shops & stalls
INTORODUCTION to Business & Accounting
Different forms of Business and
relevance of Accounting
Common forms of business
1. Simple Selling
2. Shops & stalls
3. Trading firms
4. Manufacturing firms
5. Firms Providing Services
Trading
INTORODUCTION to Business & Accounting
Different forms of Business and
relevance of Accounting
Common forms of business
1. Simple Selling
2. Shops & stalls
3. Trading firms
4. Manufacturing firms
5. Firms Providing Services
Manufacturing firms
INTORODUCTION to Business & Accounting
Different forms of Business and
relevance of Accounting
Common forms of business
1. Simple Selling
2. Shops & stalls
3. Trading firms
4. Manufacturing firms
5. Firms Providing Services
Firms Providing Services
• Calculation of Profit is the Basic need of any business firm
Profit = Selling price – Purchase price
or More generally
Profit = Sales - Cost
[Just think !: Certain organizations works with Non-Profit Moto. Still
Accounting is needed . Why ?]
• For simple selling , usually No form of any records .profit calculation is
mostly done mentally – No form of records
• For small firms like- shops , may have a small notes on
slips, diaries of notebook
• For Established Shops and trading firms, manufacturing firms & for
Service Providing firms – Needs Proper Record of Accounts
• Learn meaning and need of accounting
• Understand accounting as a source of information
• Identify the internal and external users of accounting
information
• Explain the objectives of accounting
• Describe the role of accounting
The American Institute of Certified Public Accountants (AICPA) had
defined accounting as the art of
recording,
classifying,
and summarising
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’.
This definition was made in 1941
With resulting in changing role of accounting, its scope, became broader. In 1966,
the American Accounting Association (AAA) defined accounting as
‘the process of
identifying,
measuring and
communicating economic information to permit informed judgments and
decisions by users of information’.
1. Meaning of Accounting : Accounting is a process of
identifying, }
measuring, } the business transactions
recording }
and
communicating thereof the required information to the interested users.
Thus the Process of Accounting
Starts with : Identifying Business Transactions
and
Ends with: Preparation of Financial Statements
2. Accounting as source of Information
Every step in accounting process,
identifying Business transactions
measuring Business transactions AND
Recording Business transactions generates
Information
Just Note , by now we have made clear
Learn meaning and need of accounting
Understand accounting as a source of
information
And Balance left is
• Identify the internal and external users
of accounting information
• Explain the objectives of accounting
• Describe the role of accounting
ACCOUNTANCY Made Easy
For Plus 1Class
RAM’s Learning
Center
+91 7012453191 [email protected]
