Accounting and Financial Management lecturenotes

Accounting and Financial Management lecturenotes in Financial Accounting & Management uploaded at P.R.Engineering college

Accounting and Financial Management lecturenotes in Financial Accounting & Management at P.R.Engineering college uploaded by P.R.Engineering college Staff in lecturenotes.net

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Syllabus
M.C.A. Semester-II
Accounting and Financial Management
1. Accounting process and principles, financial, cost and
management accounting.
2. Elements of book keeping, Journal, cash and handbook, Book
reconciliation statement, Ledger, trial balance, profit and loss
accounts, final accounts of proprietary and partnership concern
and balance sheet.
3. Cost accounting – Objectives, elements of cost, understanding
of the different methods of costing.
4. Financial Management – Meaning, scope and role, a brief study
of functional areas of financial management. Introduction to
various FM tools: Ration Analysis
 Meaning
 Basis of comparison
 Types of ratios
5. Working Capital Management: Theory of Working Capital
Management: Introduction, Nature of Working Capital, Concepts
and Definitions of Working Capital, Need for Working Capital,
Permanent and Temporary Working Capital, Changes inn
Working Capital, Determinants of Working Capital.
6. Budgeting – budgets, purpose, budgetary control, preparation of
budgets, master budget, fixed and flexible budgeting.
Reference Books:
1. “Book Keeping and Accountancy” Choudhari, Chopde.
2. “Cost Accounting”: Choudhari, Chopde.
3. “Financial Management” Text and Problems: M.Y.Khan, P.K.
Jain.
4. “Financial Management Theory & Practice” Prasanna Chandra
Tata McGraw Hill.
5. Managerial Economics & Financial Analysis, Siddiqui S.A.
Siddiqui A.S. New Age.

2
1
ACCOUNTING PROCESS AND
PRINCIPLES, FINANCIAL, COST AND
MANAGEMENT ACCOUNTING
Unit Structure:
1.0 Objectives
1.1 Introduction
1.2 Meaning of Accounting
1.3 Accounting Principles
1.4 Branches of Accounting
1.5 Accounting process
1.6 Funds Flow Statement
1.7 Cash Flow Statement
1.8 Distinction between Funds Flow Statement and Cash Flow
Statement
1.9 Exercises
1.0 OBJECTIVES
After studying the unit the students will be able to:
 Understand the meaning of Accounting.
 Explain the Accounting Principles and Concepts.
 Know the Process of Accounting.
 Understand and explain the process of Accounting.
1.1 INTRODUCTION
Every person performs some kind of economic activity. A
worker daily works and get wages and he spends to buy goods,
cloths and some part of earnings saves for future. A business man
purchases goods and sales it. He incurred various expenses like
salaries, rent etc. A partner in firm contributes towards capital in the
firm which carries on business may be trading in goods. Similarly
companies, Governments are also carries on some financial3
activities. All are carrying some kind of economic activities. Such
economic activities are performed through transactions and / or
events. Thus the business transactions include purchase, sale of
goods, rendering various services, receipts and payments for such
transactions. In a business concerns the transactions are
numerous. The details of all transactions cannot be remembered by
the business man. Therefore it is necessary to keep written records
of all such transactions. The records of written transaction will help
business to settle disputes and also possible to provide valuable
information to the owner of business. Book-keeping disciple has
been developed to serve this purpose. The aim of Book-keeping is
to provide the information needed by the businessmen and also it
helps him to take decisions.
1.2 MEANING OF ACCOUNTING
The American Institute of Certified Public Accounts (AICPA)
defined Accounting as “Accountancy is the art of recording
classifying and summarizing in a significant manner and in terms of
money transactions and events which are in part of at least a
financial characters and interpreting the result there of”.
Again in 1966, AICPA defines Accounting as “The process of
identifying, measuring and communicating economic information to
permit; informed judgement and decisions by the uses of accounts”.
Thus accounting may be defined as the process of
recording, classifying, summarizing, analysing and interpreting the
financial transactions and communicating the results. There of to
the persons interested in such information.
The utility of accounting information is greatly increased
when it is compiled in a systematic manner and financial
statements are prepared at periodic intervals.
There is difference between the terms “Book keeping” and
“Accounting”. Book keeping is merely concerned with orderly record
keeping and recording business transactions and financial
Accounting is border in scope than book keeping. Accounting
involves analysis and judgements at different stages such as
recording of transactions, classification, summarization and
interpretation.
1.3 ACCOUNTING PRINCIPLES
The basis aims of book-keeping and accountancy are to
record the business transactions and events in a summarised form.
Transactions are recorded in chronological order in proper books o

Title:
Accounting and Financial Management lecturenotes

Subject:
Financial Accounting & Management

Institute:
P.R.Engineering college

Accounting and Financial Management lecturenotes

Accounting and Financial Management lecturenotes in Financial Accounting & Management uploaded at P.R.Engineering college

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