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PRESENTATION
Sub:- Accountancy
Topic:- Accounting concepts
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INFLATION ACCOUNTING
IntroductionTraditionally, only monetary trasactions
are recorded in books of accountancy. But,
in modern age due to competition price
wars are increased day-by-day. In the
1970s, prices have increased at much faster
annual rate in comparison with second
post-war period. In many countries,
including India, the price raise was 15%
per annum. Thus, the need to bring out the
impact of inflation infinancial position of
the business.
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MEANING
Fesibility of accounting for price levelchanges is called as a inflation accounting.
On the other hand, inflation accounting
means that type of accounting system which
record effect of inflation in books of
accountancy.
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EFFECT OF FINANCIAL STATEMENTo
Profit and loss account will show more profitthan actual profit because depriciation provisionis inadequate and the closing stocks areprogressively valued at higher price due toinflation.
o As profit and loss account shows more profitand illusory profit than the true profit, more
amount of income-tax and dividend would bepaid.
o Balance sheet will not exhibit the true state ofaffairs or business because fixed assets are shownat the historicalcost while current assests areshown at current cost.
o Depreciation on fixed assets is provided on basisof historical cost of assets acquired. However, dueto the increase in price level during this period,the amount of provision for depreciation would betotally inadequate to replce the asset.
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Methods to
show effect ofinflation
Putting aNote in
Accounts
Replacement
ReserveMethod
PartialChangeMethod
CurrentPurchasing
Power MethodCurrent CostAccounting
Method
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HUMAN RESORCE ACCOUNTING
IntroductionHuman beings are most valuable assets of the
business. It is responsibility of busines that
aquire, maintain and develop human resource in
business. If they purchase smallest asset then it
recorded in business but large amount of money
spent on aquiring and developing humanresource are not recorded in book of account.
Therefore, to provide meaningful information to
their stakeholders company show their human
assetsin their financial statement.
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DEFINITION
According to American Accounting Associations
Committee of HumanResource Accounting (1973),
human resource accounting is the processof
identifying and measuring data about human
resources and communicating this information to
interested parties.
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Mehods of Valuing
Human Resource
HistoricalCost Basis
Method
ReplacementValue ofPersons M
ethod
ExpectedRealisable
ValueMethod
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SOCIAL RESPONSIBILITY
ACCOUNTING
Intorduction
In recent times, it is now belived that the
responsibility of business manager is not only to
earn maximum profits for its owners, but they
owe some responsibility to the society aslo. Now
the success of a business enterprise is not
evaluated on the basis of profitability only, but
the management is being held responsibility for
social problem too. It is now therefore, not
accepted that only the business earning
maximum profit is the most successful one. The
extent to which they have fulfilled their social
obligation is now also considered.
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MEANING
Reporting about the steps taken by management
to fulfill its social reponsibility and effects of
these measures on society may be termed as
social responsibility accounting.
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Scope of socialresponsibility
Net incomecontribution
Human resorce
contribution
Publiccontribution
Environmentalcontribution
Product orservice
contribution
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