Mba 1 Sem ( Smu) Finacial Management Set 1-2
Master of Business Administration- MBA Semester 1
MB0041 – Financial & Management Accounting
(Book ID: B1624)
Assignment Set - 1
Submitted By: Akhilesh Kumar Kandwal
ID:
Q1. Explain the process involved in accounting.
Ans. As implied earlier, today's electronic accounting systems tend to obscure the traditional forms of the accounting cycle. Nevertheless, the same basic process that bookkeepers and accountants used to perform by hand are present in today's accounting software. Here are the steps in the accounting cycle.
• Identifying the transactions and event: This is the first step in accounting process. It recognizes the transactions of financial character that are essential to be recorded in books of account.
• Measuring: this means expressing the value of events and transactions in terms of money.
• Recording: Record the transaction as a journal entry. It deals with recording of transactions and events in a systematic manner in book of original entry in accordance with the principle of accountancy.
• Classifying: In this step , a separate book called Ledger is maintained. It is a book wher the transactions of similar nature are maintained at one place. Post the entry in the individual accounts in ledgers. Traditionally, the accounts have been represented as Ts, or so called T-accounts, with debits on the left and credits on the right.
• Summarizing: At the end of the reporting period (usually the end of the month), create a preliminary trial balance of all the accounts by (a) netting all the debits and credits in each account to calculate their balances and (b) totaling all the left-side (i.e, debit) balances and right-side (i.e., credit) balances. The two columns should be equal. This function involves the preparation of financial statement such as Balance sheet, statement of changes in financial position, and cash flow statement.
• Analyzing: It deals with the establishment of relationship
MB0041 – Financial & Management Accounting
(Book ID: B1624)
Assignment Set - 1
Submitted By: Akhilesh Kumar Kandwal
ID:
Q1. Explain the process involved in accounting.
Ans. As implied earlier, today's electronic accounting systems tend to obscure the traditional forms of the accounting cycle. Nevertheless, the same basic process that bookkeepers and accountants used to perform by hand are present in today's accounting software. Here are the steps in the accounting cycle.
• Identifying the transactions and event: This is the first step in accounting process. It recognizes the transactions of financial character that are essential to be recorded in books of account.
• Measuring: this means expressing the value of events and transactions in terms of money.
• Recording: Record the transaction as a journal entry. It deals with recording of transactions and events in a systematic manner in book of original entry in accordance with the principle of accountancy.
• Classifying: In this step , a separate book called Ledger is maintained. It is a book wher the transactions of similar nature are maintained at one place. Post the entry in the individual accounts in ledgers. Traditionally, the accounts have been represented as Ts, or so called T-accounts, with debits on the left and credits on the right.
• Summarizing: At the end of the reporting period (usually the end of the month), create a preliminary trial balance of all the accounts by (a) netting all the debits and credits in each account to calculate their balances and (b) totaling all the left-side (i.e, debit) balances and right-side (i.e., credit) balances. The two columns should be equal. This function involves the preparation of financial statement such as Balance sheet, statement of changes in financial position, and cash flow statement.
• Analyzing: It deals with the establishment of relationship