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Learn the fundamentals of accounting with this introductory course by Master of Economic Sciences Vornicova Natalia in Chisinau 2019. Understand the importance of bookkeeping, financial statements, and the regulatory framework in accounting.
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Discipline: Basis of accountingTheme 1: Introduction to accounting Lecturer: Vornicova Natalia, Master of Economic Sciences Chisinau 2019
In all activities and in all organizations, which require money and other economic resources, accounting is required to account for these resources.
Book-keeping is the science and art of correctly recording in books of account all those business transactions that result in the transfer of money or money’s worth.
Book-keeping includes recording of journal, posting in ledgers and balancing of accounts. All the records before the preparation of trail balance is the subject matter of book-keeping.
Objectives of Book- keeping: • provides a permanent record of each transactions, • soundness of a firm can be assessed from the records of assets and labilities on a particular date, • entries related to incomes and expenditures of a concern facilitate to know the profit and loss for a given period,
it enables to prepare a list of customers and suppliers to ascertain the amount to be received or paid, • it is a method gives opportunities to review the business policies in the light of the past records, • amendment of business laws, provision of licenses, assessment of taxes etc., are based on records.
Accounting, as an information system is the process of identifying, measuring and communicating the economic information of an organization to its users who need the information for decision making.
Accounting also refers to the process of summarizing, analyzing and reporting these transactions.
The financial statements that summarize a large company's operations, financial position and cash flows over a particular period are a concise summary of hundreds of thousands of financial transactions it may have entered into over this period.
to keeping systematic record, to ascertain the results of the operation, to ascertain the financial position of the business, to portray the liquidity position, to protect business properties, to facilitate rational decision-making. Objective of accounting may differ from business to business depending upon their specific requirements. However, the following are the general objectives of accounting.
!!!!!!!!!Bookkeeping is concerned with the recording of business data, while accounting is concerned with the design, interpretation of data, and the preparation of financial reports.
Users of accounting information: • Owners, • Management, • Creditors, • Employees, • Investors, • Government, • Consumers.
Functions of accounting: • Record Keeping Function, • Managerial Function, • Legal Requirement function, • Language of Business.
The legal regulatory system of accounting is represented by all accounting rules necessarily imposed by a legal norm.
Accounting regulation cover: • Accounting law • National Standards of Accounting • International Financial Reporting Standards • Chart of accounting • Other instruction and acts elaborated by Ministry of Finance of the Republic of Moldova and other institution delegated with this right.
