Program: MBA, Trimester- I

102: Financial Accounting for Managers

Unit 1
Introduction to Accounting & Book-keeping
Lecture - I
Dr. Nitin Chaturvedi

Visiting Professor, School of Management

Outlines
• Introduction
• Definition of Accounting
• Objectives of Accounting
• Functions of Accounting
• Meaning of Book-keeping
• Features of Book-keeping
• Learning outcomes
• Research Scope
• References.

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 Introduction
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Accounting assesses performance achieved in relation to targets
and discloses information regarding accounting policies and
contingent liabilities which play an important role in predicting,
comparing and evaluating the financial results.

The primary objective of accounting is to provide useful

information for decision-making to stakeholders such as Owners,
Management, creditors, investors, etc.

Various outcomes of Business activities such as costs, prices, sales

volume, return on investment, etc are measured in the Accounting
process.

Reference No.: 1
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 Definition of Accounting
2Accounting is the measurement, Processing and Communication
of financial and non financial information about economic entities,
such as Businesses and Corporations.

The American Institute of certified public accountants (AICPA)

has defined “Accounting as the art of recording, classifying and
summarizing in a significant manner and in terms of money,
transactions and events which are, in part at least, of financial
character, and interpreting the results thereof.”

It means Accounting is a system meant for measuring business

activities, processing of information into reports and making the
findings available to decision-makers.
Reference No.: 2
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 Objectives of Accounting
Accounting provides an opportunity for Organizations to
achieve the following Objectives:

► Providing information to the Users for rational decision-

making.
► Systematic recording of transactions.
► Ascertainment of results of transactions.
► Ascertain the financial position of the Business.
► To know the solvency position.

Reference No.: 3
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 Functions of Accounting
The main functions of accounting are as follows:

► Measurement

► Forecasting

► Decision-making

► Comparison & Evaluation

► Control

► Government regulation and Taxation.

Reference No.: 3
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 Meaning of Book-keeping
Book-Keeping is an activity concerned with recording and
classifying financial data related to business operation in order of
it’s occurrence.

According to Carter, “ Book-keeping is a science and art of

correctly recording in books of accounts all those business
transactions that result in transfer of money or money’s worth.

In other words, Output of Book-keeping is an input for Accounting.

Reference No.: 3
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 Features of Book-keeping
Book-Keeping is a mechanical task which involves:

● Collection of basic financial information.

● Identification of events and transactions of financial character.

● Measurement of economic transactions in terms of money.

● Recording financial effects of economic transactions.

● Classifying effect of business transactions.

● Preparing organised statement known as Trial Balance.

Reference No.: 3
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 Learning Outcomes

1. Students will be able to know the basic difference between

concepts of Accounting and Book-keeping.
2. Students can understand the objectives and functions of
Accounting for different users of information.
3. Students will be able to identify every essential element or
process involved in Book-keeping process.
4. Students can also understand the various features and access
over accounting information for decision-making.

Reference No.: 3
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 Research scope

In the field of research in this concern topic-

1.Students will be able to understand the meaning and features of
Accounting for their research purpose.
2.Researcher students will come to know about the utility of
accounting as an important source of information for writing articles
and Research papers.
3.Students will be able to write quality articles and research papers
based on the difference between accounting and book-keeping.
4.Students will be able to analyze the importance and role of
Accounting for various users of Information., etc.

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 References
1. Srinivasan. N.P. & Murugan,M. “Principles and practice of
Accounting” New age international ltd. Publishers, New
Delhi,1st edition, 2019.
2. https;//www.en.wikipedia.org/Wiki/Accounting
3. https;//www.ncert.nic.in/textbook/pdf
4. Manuals of Institute of Chartered Accountants of India, New
Delhi.
5. Kishore, M. Ravi,“ Financial Management”,
TAXMANN’S, New Delhi, 6th edition, 2007.
6. https;//www.ddegjust.ac.in/studymaterial/mba.

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