Financial and Management Accounting: BITS Pilani
Financial and Management Accounting: BITS Pilani
Financial and Management Accounting: BITS Pilani
Management
Accounting By:
BITS Pilani Dr. Vaishali Pagaria
vaishali.pagaria@wilp.bits-pilani.ac.in
Work Integrated Learning
Programmes Division
BITS Pilani
Work Integrated Learning
Programmes Division
Course Outline
Text Books
Unilever is a conglomerate company operates in 190 countries with 400+ brands and 2.5
billion customer base. It has more than 1.5 lakh employees and having a turnover of over
€52 billion in 2019.
Unilever
Cash
Company Cash Receipt
from
Payments
Customers
to Lenders
Future Sales
Cash
Cash
Payments
Payments
to
to Suppliers
Employees
08/24/2022
Introduction to Accounting BITS Pilani, WILPD
Why Study Accounting?
Types of
Information
Nonquantitative Quantitative
Information Information
Accounting Nonaccounting
Information Information
(Monetary) (Nonmonetary)
Definition of Accounting
Accounting Cycle
The step-by-step process of Accounting
Identify
Transactions
Record
Close Books of
Journal
Account
Entries
Ledger
Financial
Posting of
Statements
Entries
Adjusted
Entries
4. Cost Concept
– Cost as on acquisition (historical cost or book value) eg. assets like land,
buildings, plant and machinery, etc.
Assets:
– Economic Resource
– Two types of Assets: Fixed Assets and Current Assets
Liabilities:
– Obligation to transfer assets
– Two types of Liabilities: Long-term liabilities and Current Liabilities
Owners’ Equity
– Owner’s investment in the business entity
– Two types of Owners’ Equity: Shareholder’s Equity and Retained Earnings
• Share capital
• Retained earnings
• Revenues and expenses
• Drawings
• Dividends
3. Realization concept
–Amount of revenue that should be recognized from a given sale
–To recognize the revenue, it has to be ‘realized’.
4. Matching concept
–Revenue earned in an accounting year is offset (matched) with all the
expenses incurred in the same period to generate that revenue
5. Consistency concept
–Sticking to the accounting method. Eg. depreciation method, inventory
management method, etc.
6. Materiality concept
– Insignificant events may be disregarded
– Full disclosure of all the important information
• Wages
• Rent
• Commission
• Interest paid
• Interest receive
• Sales revenue….etc..
• All expenses
• All income
Exercise 2: Prepare an Income Statement for the year for Worden Corporation
from the below given information
THANK YOU!!!!
08/24/2022