Book description
Financial Accounting provides a comprehensive, simple, and pragmatic presentation of various concepts in accounting. Rich in pedagogy and extensive in coverage, the book not only meets the requirements of the undergraduate students of different Indian universities but will also be useful for the students of CA, CS, MBA and ICWA.
Table of contents
- Cover
- Title page
- Brief Contents
- Contents
- Dedication
- Preface
-
Chapter 1. Accounting as an Information System
- Objective 1: Meaning and Definition of Accounting
- Objective 2: Characteristic Features of Accounting
- Objective 3: Concept of Accounting as Information System
- Objective 4: Characteristic Features of an Accounting System
- Objective 5: Users of Financial Accounting Information
- Objective 6: Branches of Accounting
- Objective 7: Distinction Between Financial Accounting and Management Accounting
- Objective 8: Objectives of Financial Accounting
- Objective 9: General Purpose Statement
- Objective 10: Qualitative Characteristics of Accounting Information or Financial Statements
- Objective 11: Functions of Accounting
- Objective 12: Advantages of Accounting
- Objective 13: Limitations of Accounting
- Objective 14: Bases of Accounting
- Objective 15: Distinction Between Accrual Basis of Accounting and Cash Basis of Accounting
- Summary
- Key Terms
- Reference
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
-
Chapter 2. Nature of Financial Accounting Principles
- Objective 1: Need and Meaning of Accounting Principles
- Objective 2: Meaning and Characteristic Features of Generally Accepted Accounting Principles (GAPP)
- Objective 3: Basic Accounting Concepts
- Objective 4: Basic Accounting Conventions
- Summary
- Key Terms
- Reference
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
-
Chapter 3. Accounting Standards
- Objective 1: Meaning and Definition of Accounting Standards
- Objective 2: Constitution of Accounting Standard Board in India
- Objective 3: Scope of Accounting Standards in India
- Objective 4: Procedure of Issuing Accounting Standards
- Objective 5: Applicability of Accounting Standards
- Objective 6: Status of the Accounting Standards Issued by the Institute of Chartered Accountants of India
- Objective 7: Compliance with Accounting Standards
- Objective 8: Implementation of Accounting Standards
- Objective 9: Salient Features of “General Purpose Financial Statements”
- Objective 10: Benefits of Accounting Standards
- Objective 11: AS-1 – Disclosure of Accounting Policies
-
Objective 12: Case Study
- 12.1 Convention
- 12.2 Basis of Accounting
- 12.3 Depreciation
- 12.4 Inventories
- 12.5 Revaluation of Assets
- 12.6 Investments
- 12.7 Sale
- 12.8 Turnover
- 12.9 Investment Income
- 12.10 Retirement Benefits
- 12.11 Provision for Income Tax
- 12.12 Lease Rentals
- 12.13 Research and Development
- 12.14 Foreign Currency Transaction
- 12.15 Claims
- 12.16 Financial and Management Information System
- Objective 13: Accounting Standard-2 (AS–2) Revised and Valuation of Inventories
- Objective 14: Accounting Standard-3 (AS–3) and Cash Flow Statements
- Objective 15: AS–4: Contingencies and Events Occurring after Balance Sheet Date
- Objective 16: AS–5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies
- Summary
- Key Terms
- Reference
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
-
Chapter 4a. Accounting Process – Journal
- Objective 1: Concept of Accounting Process and Stages
- Objective 2: Recording of Business Transactions and its Classification
- Objective 3: Meaning of Account and its Classification
- Objective 4: Classification of Accounts
- Objective 5: Meaning of Double Entry and Double Entry System
- Objective 6: Methods of Recording Business Transactions
- Objective 7: Traditional Approach for Recording Business Transactions and Debit–Credit Rules for Three Types of Accounts
- Objective 8: Meaning and Format of Journal
- Objective 9: Meaning of Journalising
- Objective 10: Analysis of Business Transactions
- Objective 11: Recording the Results of Analysis
- Objective 12: Types of Entries
- Objective 13: Source Documents – Formats, Uses and Methods of Recording
- Objective 14: Recording of Trade Discount and Cash Discount
- Objective 15: Accounting Equation Approach – Meaning and Classification of Accounts
- Objective 16: Rules of Debit and Credit as per Accounting Equation Approach
- Objective 17: Analysis of Business Transactions Applying Accounting Equation Technique
- Summary
- Key Terms
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 4b. Accounting Process – Ledger
- Objective 1: Meaning of “Ledger”
- Objective 2: Standard Form of Ledger and its Contents
- Objective 3: Meaning of Posting
- Objective 4: Procedure of Posting
- Objective 5: Distinction Between Journal and Ledger
- Objective 6: Posting of an Opening Entry
- Objective 7: Balancing an Account and Procedure for Balancing
- Summary
- Objective-type Questions
- Multiple-choice Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 4c. Accounting Process – Subsidiary Books
- Objective 1: Meaning of Subsidiary Books
- Objective 2: Kinds and Purposes of Subsidiary Books
- Objective 3: Advantages of Subsidiary Books (or) Special Journals
- Objective 4: Difference Between Subsidiary Books and Ledger
- Objective 5: Meaning and Type of Cash Book
- Objective 6: Meaning, Format and Recording of Transactions in Single Column Cash Book
- Objective 7: Meaning and Format of Double Column Cash Book (Cash Book with Discount and Cash Column)
- Objective 8: Method of Entering Bank Transactions in Two Columns (Bank and Discount Column)
- Objective 9: Meaning of Triple Column Cash Book with Discount, Cash and Bank Columns and Procedure of Recording Business Transactions in Triple Column Cash Books
- Objective 10: Meaning, Salient Features and Advantages of Petty Cash Book
- Objective 11: Format and Method of Recording Transactions in the Analytical Form of Petty Cash Book
- Objective 12: Purchases Book – Meaning and Format and Methods of Preparing Purchase Book and Ledger Accounts
- Objective 13: Meaning, Format and Features of Sales Book
- Objective 14: Meaning and Features of Purchases Returns Book
- Objective 15: Meaning and Features of Purchases Returns Book
- Objective 16: Meaning of Bills of Exchange Specimen and Meaning of Some Important Terms
- Objective 17: Procedure of Recording Transactions in B/R and B/P Books
- Objective 18: Journal Proper and Different Kinds of Entries
- Summary
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 4d. Accounting Process – From Journal to Trial Balance
- Objective 1: Meaning of Trial Balance
- Objective 2: Objectives and Salient Features of Trial Balance
- Objective 3: Methods of Preparation of a Trial Balance
- Objective 4: Concept of Errors
- Objective 5: Kinds of Errors
- Objective 6: Classification of Errors (Based on the Impact of Errors on Trial Balance)
- Objective 7: Rectification of Errors
- Objective 8: Steps to Locate the Errors in Trial Balance
- Objective 9: Meaning of Suspense Account and its Accounting Treatment
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 5a. Accounting Process – From Trial Balance to Final Accounts and Final Accounts of Non-corporate Business Entities
- Objective 1: Accounting Process – Preparation of Final Accounts from Trial Balance
- Objective 2: Trading Account
- Objective 3: Manufacturing Account
- Objective 4: Profit and Loss Account
- Objective 5: Balance Sheet
- Objective 6: Uses of Balance Sheet
-
Objective 7: Differences Between Trial Balance and Balance Sheet
- 7.1 Stock at the End or Closing Stock
- 7.2 Accrued Expenses or Outstanding Expenses
- 7.3 Prepaid Expenses
- 7.4 Accrued Income
- 7.5 Income Received in Advance (or) (Unearned Income or Unaccrued Income)
- 7.6 Description of Fixed Assets
- 7.7 Bad Debts
- 7.8 Provision for Bad and Doubtful Debts
- 7.9 Provision for Discount on Debtors
- 7.10 Provision (or) Reserve for Discount on Creditors
- 7.11 Adjustment of Interest on Capital
- 7.12 Interest on Drawings
- 7.13 Abnormal Loss of Stock
- 7.14 Insurance Premium
- 7.15 Salaries and Wages
- 7.16 Commission on Profit
- 7.17 Goods Sent on Approval: Meaning and Accounting Treatment
- 7.18 Goods-in-Transit
- 7.19 Bad Debts Written off Recovered
- 7.20 Withdrawals, Samples and Free Gifts
- 7.21 Income Tax
- 7.22 Provident Fund: Employee’s and Employer’s Contribution
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 5b. Capital and Revenue – Expenditures and Receipts
- Objective 1: Meaning of Capital Expenditure and Examples
- Objective 2: Meaning and Features of Revenue Expenditure
- Objective 3: Deferred Revenue Expenditure
- Objective 4: Revenue Expenditure: To be Treated as Capital Expenditures
- Objective 5: Distinction Between Capital Expenditure and Revenue Expenditure
- Objective 6: Capital and Revenue Receipts
- Objective 7: Meaning of Capitalised Expenditure
- Objective 8: Capital Profit and Revenue Profit
- Objective 9: Capital and Revenue Losses
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 6. Accounting for Not-for-profit Organisations
- Objective 1: Meaning and Salient Features of NPOs
- Objective 2: Meaning and Features of Receipts and Payments Account
- Objective 3: Preparation of Receipts and Payments Account
- Objective 4: Meaning and Main Features of Income and Expenditure Account
- Objective 5: Distinction Between Receipts and Payments Account and Income and Expenditure Account
- Objective 6: Accounting Treatment of Some Special Items
- Objective 7: Preparation of Income and Expenditure Account from Receipts and Payments Account
- Objective 8: Preparation of Opening and Closing Balance Sheets
- Objective 9: Preparation of Receipts and Payments Account from Income and Expenditure Account
- Objective 10: Preparation of Receipts and Expenditure Account for Professionals
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
- Question Bank – Exercises
-
Chapter 7. Financial Statements from Incomplete Records (Single Entry System)
- Objective 1: Meaning and Definition of Single Entry System
- Objective 2: Salient Features of Incomplete Records System
- Objective 3: Differences Between Single Entry System (Incomplete Records System) and Double Entry System
- Objective 4: Preparation of Accounts (or) Ascertainment of Profit or Loss from Incomplete Records
- Objective 5: Distinction Between Statement of Affairs and Balance Sheet
-
Objective 6: Accounting Treatment
- 6.1 Model 1: Computation of Capital
- 6.2 Model 2: Ascertainment of Profit/Loss
- 6.3 Model 3: Ascertainment of Opening Capital, Closing Capital and Profit/Loss
- 6.4 Model 4: Computation of Net Profit (After Adjustments)
- 6.5 Model 5: Cheques Issued but not Presented
- 6.6 Model 6: Bank Transactions – Adjustments
- 6.7 Model 7: Net Increase in Assets or Net Decrease in Liabilities
- 6.8 Incomplete Records and Partnership Firms
- 6.9 Model 8: Single Entry and Partnership Firm
-
Objective 7: Method 2: Conversion Method (or) Final Accounts Method
- 7.1 Meaning
- 7.2 Conversion Method Features
- 7.3 Procedure Under Conversion Method
- 7.4 Model: Calculation of Missing Figure – Opening Stock
- 7.5 Model: Calculation of Missing Figure – Purchases
- 7.6 Model: Calculation of Missing Figure – Credit Sales
- 7.7 Model: Calculation of Missing Figure – Bills Receivable
- 7.8 Cost of Goods Sold and Memorandum Trading Account
- 7.9 Revenue Expenses
- 7.10 Revenue Income
- 7.11 Model: Computation of Missing Figures (Combination of More Than One Item)
- 7.12 Model: Preparation of Trading and Profit and Loss Account Together with Balance Sheet
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 8. Measurement of Business Income
- Objective 1: Definition of Income
- Objective 2: Revenues and Expenses
- Objective 3: Meaning of Measurement of Business Income
- Objective 4: Measurement of “Net Income” or “Net Profit”
- Objective 5: Measurement of Net Income: Matching of Incomes and Expenses Method
- Objective 6: Comparison of “Net Worth Method” and “Matching Costs Against Revenue Method”
- Objective 7: Procedure for Measurement of Business Income
- Objective 8: Salient Features of Business Income
- Objective 9: Meaning of Economic Concept of Income
- Objective 10: Salient Features of Economic Concept of Income
- Objective 11: Procedure to Measure Economic Income
- Summary
- Key Terms
- Reference
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
-
Chapter 9. Revenue Recognition and Recognition of Expenses
- Objective 1: Definition of Revenue
- Objective 2: Factors Derived from the Definition
- Objective 3: Timing of Revenue Recognition
- Objective 4: Guidelines for Revenue Recognition
- Objective 5: Revenue Recognition at the Point of Sale
- Objective 6: A Method to Ascertain Recognition of Revenue
- Objective 7: Concept of Recognition of Expenses (Costs)
- Objective 8: AS–9 Revenue Recognition
- Objective 9: Appendix
- Summary
- Key Terms
- Reference
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
-
Chapter 10. The Nature of Depreciation
- Objective 1: Definition of Depreciation
- Objective 2: Characteristic Features of “Depreciation”
- Objective 3: Accounting Concept of Depreciation
- Objective 4: Salient Features
- Objective 5: The Causes of Depreciation
- Objective 6: Need for Depreciation
- Objective 7: Factors Affecting Amount of Depreciation
- Objective 8: Depreciation on Assets
- Objective 9: Accounting Treatment
-
Objective 10: Methods of Providing (Allocating) Depreciation
- 10.1 Straight Line Method: (or) Fixed (or) Equal Installment Method: Meaning, Formula, Merits, Demerits and Suitability
- 10.2 Written Down Value Method (or) Diminishing Balance Method (or) Reducing Balance Method: Meaning, Formula, Merit, Demerit and Suitability
- 10.3 Provision for Depreciation/Accumulated Depreciation: Passing of Entries and Preparation of Accounts
- 10.4 Procedure for Change in the Method of Depreciation
- 10.5 Annuity Method: Meaning and Features
- 10.6 Sinking Fund Method (or) Depreciation Fund Method: Meaning, Merits, Demerits and Suitability
- Objective 11: Choice of Depreciation Method
- Objective 12: Is Depreciation a Source of Income or Expense?
- Objective 13: Provision: Meaning, Examples, Objectives, Accounting Treatment and Disclosure
- Objective 14: Reserves
- Objective 15: Provision for Repairs and Renewals: Meaning and Accounting Treatment
- Objective 16: Accounting Standard (AS)–6
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 11. Inventory – Valuation
- Objective 1: Meaning
- Objective 2: Significance of Inventory Valuation
- Objective 3: Inventory Record Systems
- Objective 4: Valuation of Inventories
- Objective 5: Specific Identification of Costs
- Objective 6: First-in-first-out Method
- Objective 7: Last-in-first-out Method (LIFO)
- Objective 8: Weighted Average Method
- Objective 9: Choice of Inventory Valuation Methods
- Objective 10: Valuation of Inventory as on the Balance Sheet
- Objective 11: Accounting Standard-2 (Revised)
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 12. Accounting for Hire-Purchase and Installment
- Objective 1: Definition of Hire-Purchase System
- Objective 2: Process of Calculation and Allocation of Interest
- Objective 3: Accounting Treatment
- Objective 4: Default and Repossession
- Objective 5: Format of Hire-Purchase Sales Register for the Year Ended
- Objective 6: Methods of Ascertaining Profit
- Objective 7: Installment System
- Objective 8: Concepts of Operating and Financial Lease
- Objective 9: Salient Features of Lease
- Objective 10: Advantages of Learning
- Objective 11: Disadvantages of Leasing
- Objective 12: Accounting Treatment Relating to Leases as per AS–19
- Objective 13: Distinction Between Financial Lease and Operating Lease
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 13. Accounting for Inland Branches
- Objective 1: Meaning of a Branch
- Objective 2: Branch Accounting
- Objective 3: Accounting for Inland Dependent Branches
- Objective 4: Accounting System
- Objective 5: Stock-Debtors System or Stock and Debtors Method
- Objective 6: Independent Branches
- Objective 7: Incorporation of Branch Trial Balance
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 14. Dissolution of Partnership
- Objective 1: Dissolution of Partnership
- Objective 2: Distinction Between Dissolution of Partnership and Dissolution of Firm
- Objective 3: Treatment of Some Accounts at the Time of Dissolution
- Objective 4: Accounting Treatment
- Objective 5: Accounting Treatment on Dissolution
- Objective 6: Goodwill
- Objective 7: Preparation of Balance Sheet as on the Date of Dissolution
- Objective 8: Return of Premium (Goodwill) (Section 51)
- Objective 9: Insolvency of Partner(s)
- Objective 10: All Partners are Insolvent
- Objective 11: Minor and Partnership Dissolution
- Objective 12: Sale of Partnership Firm to a Limited Company
- Objective 13: Piecemeal Distribution
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Exercises
-
Chapter 15. Financial Statement Analysis
- Objective 1: Meaning of Financial Statement Analysis
- Objective 2: Types or Classification of Financial Statement Analysis
- Objective 3: Process of Financial Statement Analysis
- Objective 4: Purposes and Significance of Financial Analysis
- Objective 5: Tools or Techniques of Financial Statement Analysis
- Objective 6: Comparative Financial Statements
- Objective 7: Comparative Income Statement – Special Features
- Objective 8: Meaning of Common Size Statements
- Objective 9: Meaning and Computation of Trend Percentages
- Objective 10: Various Users of Financial Statements
- Objective 11: Limitations of Financial Statement Analysis
- Objective 12: Financial Statements of a Company – Types and Formats
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 16. Accounting Ratios
- Objective 1: Meaning of Ratio Analysis – A Systematic Use of Ratios to Interpret the Performance of Entities
- Objective 2: Advantages and Uses of Ratio Analysis
- Objective 3: Limitations of Ratio Analysis
- Objective 4: Classification of Ratios or Types of Ratios
- Objective 5: Liquidity Ratios
- Objective 6: Solvency Ratios (Long-term Solvency)
- Objective 7: Profitability Ratios
- Objective 8: Activity Ratios
- Objective 9: Ratios: Advanced Level
- Summary
- Key Terms
- References
- Objective-type Questions
- Multiple-choice Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
-
Chapter 17. Cash Flow Statement
- Objective 1: Meaning of Cash Flow and Cash Flow Statement
- Objective 2: Uses of Cash Flow Statement
- Objective 3: Limitations of Cash Flow Statement
- Objective 4: Preparation of Cash Flow Statements
-
Objective 5: Cash Flow Statement: Preparation
- 5.1 Direct Method Pro-forma or Format of Cash Flow Statement for the Year Ended
- 5.2 Indirect Method Pro-forma or Format Cash Flow Statement for the Year Ended
- 5.3 Calculation of Cash Outflow on Purchases
- 5.4 Cash Outflow on Expenses Incurred
- 5.5 Adjustments
- 5.6 Cash Flow from Investing Activities
- 5.7 Cash Flow from Investing Activities
- 5.8 Cash Flow from Financing Activities
- 5.9 Accounting Treatment of Special Items
-
Objective 6: Important Steps (stages) in the Preparation of Cash Flow Statement
- 6.1 Stage I: A. Cash Flow from Operating Activities
- 6.2 Stage II: B. Cash Flow from Investing Activities
- 6.3 Stage III: C. Cash Flow from Financing Activities
- 6.4 Stage IV: Net Increase/Decrease in Cash and Cash Equivalents
- 6.5 Stage V: Cash and Cash Equivalents at the Beginning of the Year to be Added
- 6.6 Stage VI: Cash and Cash Equivalents at the End of the Year to be Recorded
- Objective 7: Some Important Hints
- Summary
- Key Terms
- References
- Objective-type Questions
- Short Answer-type Questions
- Essay-type Questions
- Exercises
- Acknowledgements
- Copyright
Product information
- Title: Financial Accounting
- Author(s):
- Release date: June 2010
- Publisher(s): Pearson India
- ISBN: 9788131731802
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