accounting for managers - introduction
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ACCOUNTING FOR
MANAGERS
KIRAN KUMAR, Asst. Professor, VVCE
Module 1 : Introduction to Business and Acc
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Business
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Manufacturing, Buying and Selling of Goods and Services For Monetary Benefits
Forms of Business Organizations
Sole Proprietorship
Partnership
Company
Private Limited
Public Limited Listed
Unlisted
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Business as a Cash Cycle
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Cash received
from sales
KIRAN
Company
Cashto
CasC
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Business as a Credit Cycle
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Cashreceived
fromcurrent
sales,futuresales,
past sales
KIRAN
Company
Borrowingfor Inputs
Lendingto
Customers
CashCollection
fromCustomer
s
Paymentfor Input
Providers
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Business Activities
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Financing Activities Capital and Liabilities
Investing Activities Assets
Operating Activities Incomes and Expenses
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Accounting
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ACCOUNTING FOR MANAGERS
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Daily Transaction Record
Profit or Loss
Assets and Debt Positions
Movement of Funds
Investment and W
Purchase and Sales
Income and Expen
Any other transact
can be monetarily
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ACCOUNTING FOR MANAGERS
Account or Explanation Transactio
Stakeholders Owners
Financiers
Suppliers
Employees
Government
Society
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Monetary Transactions
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Inputs :
Business Transactions (e.g., Purchases,Sales, Cash receipts, cash payments
External Events Change in Law
Proc
Accounti
Accountin
Managem
Laws and
Account
Outp
P & L AcBalance
Cash Flow
Notes, ManComme
Repo
Users:
Shareholders
Analysts, Banks
Rating Agencies
Managers, Employees
Suppliers, Customers
Government
Regulators, Media
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Users of Accounting
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Owners
Managers
Lenders
Employees
Security Analysts
Banks
Rating Agencies
Suppliers
Customers
Government
Regulators
Media
Public
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History..
Accounting practices started in Italy
Luca Pacioli first wrote a book
Accounting Terms from Latin
Industrial Revolution of 18th
Century
Separation of Ownership
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ACCOUNTING FOR MANAGERS
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Accounting - Types
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Financial Accounting
Cost Accounting
Management Accountin
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Accounting Systems
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Systems of Book-Keeping Single-Entry
Double Entry
Systems of Accounting
Cash System of Accounting
Mercantile System of Accounting
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Accounting Principles
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Uniform Scientifically laid down Practices
Adopted universally by Accountants across Globe
Three Categories
Accounting ConceptsBASIC ASSUMPTIONS
Accounting Conventions
Accounting Standards
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Accounting Concepts
Separate Entity
Going Concern
Money Measurement
Cost
Dual Aspec
Periodicity
Matching
Realization
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Accounting Conventions
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Conservatism
Full Disclosure
Consistency
Materiality
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Accounting Standards
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IFRS International Financial Reporting Standards 8
IFRS3Business Combinations
IFRS4Insurance Contracts
International Accounting Standards 41
IAS1Presentation of Financial Statements
IAS7Cash Flow Statements
ICAI Accounting Standards 32
AS6Depreciation
AS14Accounting for Amalgamations
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Accounting Systems
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Systems of Book-Keeping Single-Entry
Double Entry
Systems of Accounting
Cash System of Accounting
Mercantile System of Accounting
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Accounting Equation
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SOLVE.!!!?
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Anna Bond Ltd has assets of Rs. 87000 and liabilit53000. How much is its Capital?
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SOLVE.!!!?
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James Bond Ltds Balance Sheet contains the following
Loan Payable12000
Owners Capital 77300
Cash5000
Debtors17000
Stock of RM9000 Equipment19000
Building21800
Land21000
What is the amount of other liabilities?
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SOLVE.!!!?
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Nityananda Ltds Capital is twice its Liabilities. ItsRs. 81000. how much are its liabilities?
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SOLVE.!!!?
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Give an example of a transaction for the below:
Increase in an Asset and Increase in a Liability
Increase in an Asset and a Decrease in Another Asset
Increase in an Asset and Increase in Capital
Decrease in an Asset and Decrease in a Liability Decrease in an Asset and Decrease in Capital
SOLVE !!!? ff i
On Jan 2012, Katariveera started Surasundarangi Photo Studio Ltd. The follo
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SOLVE.!!!? Effect on AccountingEquation
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J g
transactions took place during the first month:
Katariveera invested Rs. 30000 cash in the company in exchange for 3000
each in the share capital of the company
Bought supplies of photographic materials on credit Rs. 9000
Bought photographic equipment for cash Rs. 12000
Received fees for photographic services Rs. 15000
Paid creditor for supplies, Rs. 5000 Took a loan Rs. 12000
Billed customers for services Rs. 19000
Paid office rent Rs. 2500; Electricity Rs. 1200
Paid Dividends Rs. 4000
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SOLVE.!!!? Effect on Accounting E
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The transactions of Yamaloka Travels Ltd during this month are as follows:
Bought a computer for cash
Invoiced customers for services provided
Bought office supplies on credit
Owner invested in the business
Collected amount due from a customer
Received a Bank loanPaid amount due to a creditor
Provided services for cash
Repaid a part of the bank loan
Paid salaries for the month
Owner withdrew Cash for personal use
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END OF MODULE 1: INSERT DISC-2
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