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Financial Accounting TableofContents 1. OVERVIEW .  Introduction  Definition of Accounting  Objectives and Scope of Accounting  Accounting Process  Classification of Accounts  Accounting System 2. FINANCIAL ACCOUNTING  Journal  Analysis and Treatment of Transactions  Posting in a Ledger  Ruling of Account in Ledger Account 3. SUBSIDIARY BOOKS  Cash Book  Triple Column Cash Book  Petty Cash Book  Purchase Book  Sale Book  Bills Receivables Book0  Bills Payable Book 4. Key Features of Subsidiary Books  Bank Reconciliation  Trial Balance 5.Financial Statements5  Trading Account  Profit and Loss Account  Balance Sheet

Financial Accounting ObjectivesandScopeofAccounting Let us go through the main objectives of Accounting:  To keep systematic records: Accounting is done to keep systematic record of financial transactions. The primary objective of accounting is to help us collect financial data and to record it systematically to derive correct and useful results of financial statements.  To ascertain profitability: With the help of accounting, we can evaluate the profits and losses incurred during a specific accounting period. With the help of a Trading and Profit & Loss Account, we can easily determine the profit or loss of a firm.  To ascertain the financial position of the business: A balance sheet or a statement of affairs indicates the financial position of a company as on a particular date. A properly drawn balance sheet gives us an indication of the class and value of assets, the nature and value of liability, and also the capital position of the firm. With the help of that, we can easily ascertain the soundness of any business entity.  To assist in decision-making: To take decisions for the future, one requires accurate financial statements. One of the main objectives of accounting is to take right decisions at right time. Thus, accounting gives you the platform to plan for the future with the help of past records.  To fulfill compliance of Law: Business entities such as companies, trusts, and societies are being run and governed according to different legislative acts. Similarly, different taxation laws (direct indirect tax) are also applicable to every business house. Everyone has to keep and maintain different types of accounts and records as prescribed by corresponding laws of the land. Accounting helps in running a business in compliance with the law. AccountingProcess Accounting cycle refers to the specific tasks involved in completing an accounting process. The length of an accounting cycle can be monthly, quarterly, half-yearly, or annually. It may vary from organization to organization but the process remains the same. The following chart shows the basic steps in an accounting cycle: 2