1. introduction to management accounting

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Introduction to

Management Accounting

Dr. S.R. KandalgaonkarSymbiosis centre for Distance Learning, Pune.

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MANAGEMENT ACCOUNTING

Financial Accounting:

Which consists of

Financial Concepts ,

Records, FinancialStatements and

Financial Policies of

Business Organizations.

Cost Accounting: Which

consists of Cost

Accounting Concepts,

Records, Stages in CostAccounting Statements,

Costing Techniques,

Tools and Policies used

for Internalmanagement of

Business Organizations.

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Term Money and Finance

MONEY: Currency Notes and Coins

Created by Government only

Universally accepted design, shape and size.Specific denominations, indivisible in nature

Supported by the Guarantee

Different for each Nation

$ , L, DM, Yen, Rs, Real, etc.

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TERM:MONEY

Features of Money :

Money means medium, facilitator

Money is Power: Money can do any thing

Money does not have inertia.

Money is short in supply

Money has alternative usability.

Money has life

Total money Supply is limited.

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TERM : FINANCE

Finance is the Art of Governing Money.

Finance is a Science of Money

Finance means Theories, Principles, rules andRegulations for the use of Money

Financial Management:

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Features of Financial Management :

Universal applicable to all

Continuous Applicable throughout , day in

and day out

Mixture of many branches of knowledge

Accountancy , Economics , Psychology,

Professional Body Financial results, Publications, Policies, etc.

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Organizational StructureBoard of Directors

VP Production VP Finance VP Marketing

Finance Controller

Accounting and Costing

Annual reporting

Internal Audit

Budgeting

Statistics

Records keeping

Treasurer

Receivables Management

Taxes and Insurance

Cost Management

Securities

Bank related activities

Real estate related

Dividend Distribution

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Fields of Finance

Business Finance

Corporation Finance

International Finance Public Finance

Private / Family Finance

Social Work Finance

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Finance function and other Functions

Production and materials

HR and Legal matters

Marketing, Advertizing R and D

Development and Expansion

FINANCE IS THE BACKBONE OF MODERN INDUSTRY

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Basics of Accounting

Is MONEY =FINANCE

Money means COINS AND NOTES put in circulation by the CentralAuthority i.e. the Government.

Different Types of Currency : $ , DM, L, Rs., Y , RO ,

Main Features of Money :

SHORT IN SUPPLY

ALTERNATE USE

BAD MONEY DRIVES AWAY GOOD MONEY OUT OF CIRCULATION !

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Stages in Financial Accounting

ACCOUNTS :

BOOK KEEPING :

ACCOUNTANCY : ADVANCED ACCOUNACY :

FINANCIAL MANAGEMENT :

MANAGEMENT ACCOUNTING :

MIS

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Rules in Financial Accounting

BASIC RULES OF ACCOUNTING

PERSONAL ACCOUNTS : DEBIT THE RECEIVER

CREDIT THE GIVER

REAL ACCOUNTS DEBIT WHAT COMES IN CREDIT WHAT GOES OUT

NOMINAL ACCOUNTS DEBIT ALL EXPENSES AND LOSSES CREDIT ALL INCOMES AND GAINS

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BASIC TERMS IN ACCOUNTING

A TRANSACTION

CAPITAL

DRAWINGS

BANK ACCOUNTS

ASSETS AND LIABILITIES

CASH BOOK , PETTY CASH BOOK

INCOME AND EXPENDITURES

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FLOW CHART IN ACCOUNTING

JOURNALS : CASH BOOK ; PURCHASE DAY BOOK :SALES DAY BOOK: PURCHASE RETURNSBOOK;SALES RETURN BOOK ; BILLS RECEIVABLESBOOK ; BILLS PAYABLE BOOK, JOURNAL PROPER.

BANK RECONCILIATION STATEMENT LEDGER POSTING , CASTING , BALANCING

TRIAL BALANCE

FINAL ACCOUNTS : MFG , TRADING ACCOUNT,PROFIT AND LOSS ACCOUNT

BALANCE SHEET and ADJUSTING ENTRIES