1. sundar Shrestha Deputy Director Of Studies NAsc
Accounting
sundar Shrestha Deputy Director Of Studies NAsc

2. Accounting
Session Outline
Concept
Importance
Branches of Accounting
Accounting Information System
Accounting system in the context of Nepal
Practical Problem (Cash Vs Accrual accounting Basis)

3. Concept
Accounting is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It discloses profit or loss/surplus or deficit for a given period, and value and nature of a firm’s assets, liabilities and owner’s equity.

4. Importance of Accounting
When transactions should be recognized in financial statements.
How assets and liabilities should be measured.
How financial statements should be presented for clear and effective communication.
The accounting by an entity in its financial statements for interests in other entities.

5. Branches of Accounting
Financial Accounting: Financial Accounting involves recording and classifying any transactions, and preparing and presenting financial statements to be used by internal and external users, the management.
Management Accounting: Management accounting focuses on providing information for use by internal users.
Cost Accounting: Sometimes considered accountings a subset of Management accounting, cost accounting refers to the recording, and analysis of cost.

6. Accounting Information System
Input Process Output

7. Accounting Information System
Input Transactions or Events
Process Principles , Procedures and basis of accounting
Output Financial Statement

8. Process
Principles
Concept of Dual aspect : Each transaction has two aspects
Money measurement concept: Only those transactions are recorded which can be expressed in monetary units such as rupee ,dollar and so on.
Matching concept: Cost or expenses of a particular period are matched or compared with the revenue of that period in order to calculate profit or loss.

9. Process
Principles
Going concern concept: Business continuous to exist forever.
Realization concept: Revenue is recorded at time when goods are sold or service is rendered.
Business entity concept: Business is treated as a separate unit from the owner of a business
Cost concept: Transactions are recorded at cost price.
Accounting Period: The entire life of business is divided into different period(Generally one year) to know the result of business operation

10. Procedures Transactions Recording Classification Summarizing
Interpretation and Evaluation
Communication

11. Basis of accounting Cash Basis Accounting
Under the cash basis accounting, revenues and expenses are recognized as follows:
Revenue : Revenue is recognized when cash is received.
Expense : Expense is recognized when cash is paid.

12. Accrual Basis
Accrual method recognizes income when it is earned and expenses when they are incurred Accrued Revenue Revenue is recognized before cash is received Accrued Expense Expense is recognized before cash is paid.

13. Hybrid
Those methods that are neither strictly cash nor strictly accrual but combine elements of both

14. Output Financial Statement
Income Statement
Cash Flow Statement
Balance Sheet
Statement of Changes in Equity
Notes, comprising a summary of significant accounting policies and other explanatory notes.

15. In the context of Nepal
Ma le pa faram no -10
Anusuchi - 14
Ledgers
Ma le pa faram no -5
Ma le pa faram no 15 ( Inactive-After TSA)
Ma le pa faram no - 8
Ma le pa faram no -13
Ma le pa faram no -17