FINANCIAL ACCOUNTING

Accounting as an information system, the users of financial accounting information and their needs.
Qualitative characteristics of accounting information.
Functions, advantages and limitations of accounting.
Branches of accounting, Bases of accounting- cash basis and accrual basis.
The nature of financial accounting principles – Basic concepts and conventions: entity, money measurement, going concern, cost, realization, accruals, periodicity, consistency, prudence (conservatism), materiality and full disclosures.
Financial accounting standards: Concept, benefits, procedure for issuing accounting standards in India. International Financial Reporting Standards (IFRS): - Need and procedures.
Accounting Process: From recording of a business transaction to preparation of trial balance including adjustments

Meaning and nature of depreciation
Factors in the measurement of depreciation
Methods of computing depreciation: straight line method and diminishing balance method
Disposal of depreciable assets-change of method.
Inventories: Meaning. Significance of inventory valuation. Inventory Record Systems: periodic and perpetual. Methods: FIFO, LIFO and Weighted Average.
Salient features of Indian Accounting Standard (Ind-AS): 2 (b)

Capital and revenue expenditures and receipts: general introduction only.
Preparation of financial statements of non-corporate business entities including adjustments of closing stock, outstanding expenses, prepaid expenses, accrued income, unearned income, depreciation, interest on capital and interest on drawings, manager’s commission, abnormal losses, bad debts including provision

Accounting for Hire Purchase and Installment Systems : Calculation of interest, partial and full repossession
Hire purchase trading (total cash price basis), stock and debtors system;
Concepts of operating and financial lease (theory only)

Concept of dependent branches: accounting aspects
Debtors system, Stock and debtors’ system, Branch final accounts system and Whole sale basis system.
Independent branches: concept-accounting treatment: important adjustment entries and preparation of consolidated profit and loss account and balance sheet.