SLIDE 1
Session Outline
- Definition of Accounting
- History of Accounting
- Objectives of Accounting
- Users of Accounting Information
- Book-keeping vs. Accounting
- Financial Accounting vs. Management Accounting
- Recent Trends in Accounting
INTRODUCTION TO ACCOUNTING Session 01 Session Outline Definition - - PowerPoint PPT Presentation
INTRODUCTION TO ACCOUNTING Session 01 Session Outline Definition - - PowerPoint PPT Presentation
INTRODUCTION TO ACCOUNTING Session 01 Session Outline Definition of Accounting History of Accounting Objectives of Accounting Users of Accounting Information Book-keeping vs. Accounting Financial Accounting vs. Management
SLIDE 2
SLIDE 3
DEFINITION OF ACCOUNTING
“The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information.“ American Accounting Association [AAA]-1941
SLIDE 4
HISTORY OF ACCOUNTING
- Initiated around 4000 BC – WHY?
– To record business transactions – To evaluate financial success – To know how much is owned and how much is owed
- Practiced in Ancient times in Egypt, China, Greece etc.
- Use of clay tablets/ tokens to keep track records of live stocks
SLIDE 5
HISTORY OF ACCOUNTING
- Development of the ‘Abacus’ by Chinese (Middle 3000 BC.)
- Luca Pacioli- Father of accounting
– 1494- Double entry book keeping system
SLIDE 6
OBJECTIVES OF ACCOUNTING
Primary Objective: To provide information for decision making Other Objectives: –To keep systematic records –To ascertain profitability –To ascertain the financial position of a business –To comply with laws and regulations
SLIDE 7
USERS OF ACCOUNTING INFORMATION
SLIDE 8
USERS OF ACCOUNTING INFORMATION
User Interests Investors Profitability/ Security Management Financial progress and the status Employees Job security/ Pay and benefits Lenders Repayment capacity Government Employment creation/ Tax payable Suppliers Financial health/ Liquidity Customers Business stability Public Local welfare/ Environmental concerns (CSR) Competitors Benchmarking
SLIDE 9
BOOK KEEPING VS. ACCOUNTING
- Book-keeping is the process of
recording data relating to accounting transactions in the accounting books.
- Accounting is concerned with
the uses which accountants might make of the bookkeeping information given to them.
SLIDE 10
FINANCIAL ACCOUNTING VS. MANAGEMENT ACCOUNTING
- Financial Accounting – Preparation of financial
statements and presenting historical transactions and events of a certain Accounting entity, to the external parties to enable them to make economic decisions.
- Management Accounting - Provision of financial and
non-financial information to all levels of management to enable them to act on their responsibility for planning, controlling and decision making.
SLIDE 11
SLIDE 12
RECENT TRENDS IN ACCOUNTING
Cloud Accounting
- Software that runs on servers, enabling
people to access data anywhere and anytime, using the internet.
Social Media Strategy
- Accountants using social networking
sites, in order to reach a wider community, maintain business partnerships, and attract potential clients.
SLIDE 13
RECENT TRENDS IN ACCOUNTING
Outsourcing
- Hiring an outside party to perform Accounting functions
- Gives access to experienced accountants who can provide
compliance work according to required standards.
Accounting Software
- Software that records and processes
accounting transactions
SLIDE 14