- 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
Dedication
This book is dedicated to Vasanth, Parul, Riddhima, Bhagya Shree and Sathyan.
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