Subject: Financial Accounting-I . accounts as he is the man who is engaged in book keeping. information or external use (financial accounting function). to external users. This book deals with financial accounting. . faithful representation is complete, neutral, and free from error. • comparability. PDF | On Jan 1, , L.C. Obara and others published FINANCIAL ACCOUNTING Book · January with , Reads Join for free.
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Author s : Luigi Cossa Accounting Principles Managerial Accounting This comprehensive college-level publication covers all managerial accounting topics and contains extensive and detailed examples, self-tests, questions, problems, alternate problems, and answers. Topics covered includes: Cost systems, Using accounting for quality and cost management, Cost-volume-profit analysis, Short-term decision making: Differential analysis, Budgeting for planning and control, Control through standard costs, Responsibility accounting: Segmental analysis, Capital budgeting. Author s : Hermanson, Edwards, and Ivancevich Pages This book discussed about the basics of cost accounting, material, labour and overheads costing. Also highlighted the concept of activity based costing, cost records and different costing systems. It covers the following topics: Accounting Environment, Accounting and its use in business decisions, Recording business transactions, Adjustments for financial reporting, Completing the accounting cycle, Accounting theory, Introduction to inventories and the classified income statement, Measuring and reporting inventories. Author s : Hermanson, Edwards, and Maher Pages This text gives an understanding of how to use accounting information to analyze business performance and make business decisions.
Financial accountants produce financial statements based on the accounting standards in a given jurisdiction. Financial accounting serves the following purposes: producing general purpose financial statements producing information used by the management of a business entity for decision making, planning and performance evaluation producing financial statements for meeting regulatory requirements.
Objectives of Financial Accounting Systematic recording of transactions: basic objective of accounting is to systematically record the financial aspects of business transactions i. These recorded transactions are later on classified and summarized logically for the preparation of financial statements and for their analysis and interpretation.
Ascertainment of result of above recorded transactions: accountant prepares profit and loss account to know the result of business operations for a particular period of time. If expenses exceed revenue then it is said that the business is running under loss.
The profit and loss account helps the management and different stakeholders in taking rational decisions. For example, if business is not proved to be remunerative or profitable, the cause of such a state of affairs can be investigated by the management for taking remedial steps.
Ascertainment of the financial position of business: businessman is not only interested in knowing the result of the business in terms of profits or loss for a particular period but is also anxious to know that what he owes liability to the outsiders and what he owns assets on a certain date. To know this, accountant prepares a financial position statement of assets and liabilities of the business at a particular point of time and helps in ascertaining the financial health of the business.
Accounting aims to meet the financial information needs of the decision-makers and helps them in rational decision-making. The trial balance , which is usually prepared using the double-entry accounting system , forms the basis for preparing the financial statements. Financial statements display the income and expenditure for the company and a summary of the assets, liabilities, and shareholders' or owners' equity of the company on the date to which the accounts were prepared.
Assets and expenses have normal debit balances, i. We were spending much more than the cash we had on hand. After reading Accounting Principles, I started working in tandem with the accountants to find ways to curb the outflow of cash.
This is an achievement for someone unfamiliar with even the basic accounting concepts before then. In the current economic climate, it is important for business managers to have a keen insight into the accounting aspect of their company. Maintaining a healthy cash flow balance is as important as retaining profitability.
I learned my lesson and so should you. At first, I thought that the eBook was too basic in terms of execution.
It gave a primer on the main financial statements but didn't elaborate in much detail. This was something I felt was lacking in the eBook. It was later that I saw that Free Management eBooks had several more eBooks on finance and accounting Skills on their website.
Coming back to my experience, I also learned the meanings of a few basic, yet important accounting terms and principles. For instance, I had no idea what accrual based accounting was but I do now. Same goes for the revenue recognition and matching principles of accounting.
I was confused about the expenses which have to be accounted for yet where no money is being spent, like depreciation and bad debts. Let alone understand how they are shown in the accounts, I didn't have a clue why they were termed as expenses in the first place. The eBook doesn't explain this in too much detail but it did give me a solid idea of the concept behind adding these 'non-cash' expenses to the accounts. A little more detail on the concept will be helpful nonetheless. Now I am able to contribute towards one area of the business of which I previously had no knowledge of.
Miles Norton Told Me Just Enough There comes a point in your career when you realize that you really do need to understand this stuff.
Thanks for providing such a short book that told me just enough to understand what the bean-counters are talking about without boring me too much. There are so many terms with such complex definitions. I did not believe that I could ever figure the basics out. I did not know where to start. If you simply search for accounting on the internet you will come up with endless books, articles, terms, and definitions.
I did not even know where to look to come up with terms to research. I am to the point in my career where it's time to dive into the accounting world if I want to be promoted.
Because I thought that accounting was so complex, I have always let others take over that aspect of the business. I really needed a basic book with terms simply defined so that an average person, without an accounting background, could understand.
Thankfully for my career, I have found it! This book is free and only 30 pages long. It does not get any more simplistic than that.
Before this book, I could not tell you what an income statement, balance sheet, or statement of cash flow was. This book did an excellent job of defining each of those. If you need to learn even more about income statements, balance sheets, or statements of cash, there are specific books related to each of those found on the same website as this book.
The book begins with income statements. Although it sounded really complex, it was actually very simple to understand. Using a business that I could understand as an example was a simple way of clarifying the details of an income statement. First, the book explained the basic terms to start with. Revenue, expenses, and net income were all easily defined and then turned into an equation that I could understand. The book then went on to describe cash accounting and accrual accounting.
Cash accounting is simply recording the money when it is actually received or paid out from your bank account but should only be used by small businesses. Accrual accounting is used for most businesses. Accrual accounting uses invoice sent out as "sales" even if they have not been paid yet.