New Age International (P) Limited, Publishers 4835/24, Ansari Road, Daryaganj, New Delhi - 110002 Visit Us at Www.Newagepublishers.Com

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Copyright © 2007, New Age International (P) Ltd., Publishers Published by New Age International (P) Ltd., Publishers All rights reserved. No part of this ebook may be reproduced in any form, by photostat, microfilm, xerography, or any other means, or incorporated into any information retrieval system, electronic or mechanical, without the written permission of the publisher. All inquiries should be emailed to rights@newagepublishers.com

ISBN (13) : 978-81-224-2548-2

PUBLISHING FOR ONE WORLD

NEW AGE INTERNATIONAL (P) LIMITED, PUBLISHERS 4835/24, Ansari Road, Daryaganj, New Delhi - 110002 Visit us at www.newagepublishers.com

Dedicated to
Almighty : LORD SHIVA, ALLAH & PRABHU YISHU MASIH with whose blessings this book is published

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Preface
Management in India increasingly realises the use of accounting information for efficient management of business enterprises. Accounting is the science of measurement, analysis and communication. The designing of accounting systems, generating information and transmitting it to the management has expanded the scope of accounting and financial management. This book has been written with a specific aim i.e., to cater to the needs of I.T. professionals (especially MCA students) of U.P. Technical University as well as other universities also. I.T. comprises of Hardware part, Software part, and Information part. When we talk of business application software, we need to recognize and understand business information because problem recognition is the first step of software development. Accounting and Financial management are said to be the language of business because it enables the user to recognize and understand complexities associated with business information. This generates the need for study of Accounting and Financial management for I.T. professionals. This book has been written from system’s point of view to facilitate I.T. professionals. A system comprises of three components as shown below:

INPUT DATA

PROCESSING

OUTPUT DATA

Framework

Accounting as system takes business transactions/events as input data and process it within the framework of accounting principles and theories leading to generation of a number of reports (output data) which in turn acts as input data for financial management. Financial management as system process it within the framework of external environment and takes financial decisions (output data) viz. financing decisions, investment decisions and dividend decisions. This book is also intended to assist beginners of management courses like B.B.A., B.Com. etc. and non-finance executives at work enabling them to understand business information (published in form of annual reports) and complexities associated with business organization. Furthermore, I am extremely grateful

to my godfather Dr. Girish Bihari (Ex-DGP, UP), CMD–IISE for his kind support and to New Age International Publishers, New Delhi for publishing this book so nicely and elegantly. I convey my sincere thanks to my parents, my younger brother ‘Raju’ and my lovely friend for their support and encouragement. Last but not least, I shall appreciate receiving comments and suggestions from readers for the improvement of the book. Dr. Y.P. Singh Lucknow (India) Email: doctorypsing@rediffmail.com

Contents
Part-I: Financial Accounting
CHAPTER–I: ACCOUNTING AND FINANCIAL MANAGEMENT — A CONCEPTUAL FRAMEWORK 1.1 Introduction 1.2 Need for Accounting and Role of Accountant 1.3 Defining Accounting 1.4 Accounting Information 1.5 Branches of Accounting 1.6 Difference between FA, MA and CA System 1.7 Accounting Information System (AIS) 1.8 Users of Accounting Information 1.9 Steps in Accounting Process 1.10 Limitations of Accounting 1.11 Accounting and Financial Management — Inter-relationship 1.12 Organization Structure for Accounting and Finance Activity 1.13 Utility of Accounting and Financial...
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