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By Siddhartha Kamat

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ACCOUNTING is the recording, reporting, and analysis of

financial transactions of a business.

In education "accounting" is learning the rules and

regulations and how to perform accounting task, such as

filling out the Balance Sheet, record transactions, post

transactions, analyse, etc. In simple it is learning the

accounting cycle, and how to record & maintain

accounting documents.

It is the business language and it has three aspects

1)Input2)Process

3)Output

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There are three ingredients of corporate and these are

1)PEOPLE 2)SYSTEM 3)CAPITAL

All these three ingredients rotates around the business/project.

As the law construction industry comes within the ambit of service

sector but from the accounting it still comes under the category of

manufacturing sector because construction industry is also engaged in

changing the shape of raw material and convert them into finished

product.

At construction industry most of the work performed at project site,

so the whole economic activities in construction industry can be

categorized in to the following:

1)Procurement of resources

2)Mobilization of all resources

3)Managing all the resources at the site

4)Demobilization of resources after completion of the work.

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Branches of accounting

1)Financial accounting2)Cost accounting

3)Management accounting

4)Financial management

Financial Accounting is the process of

summarizing financial data taken from an

organization's accounting records and publishing

in the form of annual (or more frequent) reportsfor the benefit of people outside the

organization.

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Accounting as a Business Language

There is an old saying in business that you cannot manage

what you cannot measure.

The same goes for an accounting system. Without anaccounting system, you may never know if your business is

really making a profit or loss; You won't be able to predict

cash flow shortages; and worst of all you cannot

accurately keep track of those slow paying customers, or

those who are not paying at all.

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Benefits of Accounting

Accounting replaces human memory

Accounting helps in knowing profit

Accounting helps in knowing financial position of organisation

Accounting helps in knowing list of creditors and debtors

Accounting helps to analyse cost of various items of work and classes of work

Accounting helps in raising more funds by supplying information to investors

and creditors

Accounting helps to facilitate efficient control of transactions in large work

Accounting helps in planning for expansion

Minimize problems with IRS & other tax authorities

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Balance Sheets

A financial statement that summarizes a company's assets, liabilities

and shareholders' equity at a specific point in time.

Statement of financial position of an organization

Cash , inventory, property ,produced goods etc. on the asset side

Accounts payable ,long term debt etc. on the liability side

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XYZ Company

Balance Sheet July 18,2011

Assets Liabilities &Capital

Cash- 5,00,000/- Liability4,00,000/-

Capital(Owners equity)

1,00,000/-

Total assets 5,00,000/- Total Liabilities & Capital

5,00,000/-

Balance sheet is always dated.

Assets=Liabilities + Capital , for every transaction

Different asset categories are listed in order of their liquidity.

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Assets

Resources acquired by the Business firm from the fund made available.

Current Assets : consists of cash & others which get converted into

cash during operating cycle time of firmi.e. cash, bank balance, raw material, work in progress

Fixed Assets : acquired for relatively long periods for carrying on the

business & not meant for resale.

Tangible Assets i.e. land, building, plant, machineries, furniture &

fixtures.

Intangible Assets i.e. goodwill, patience, trademark, copyright

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Trial Balance Balance sheetMeaning: Contains various ledger

balances on a particular date.It is the statement of the various assets

and liabilities.Objective: Purpose is to check the

arithmetical accuracy of the book of

accounts.To ascertain the financial position of the

company.

Items Covered: Contains all items

relating to incomes, expenses, assets

and liabilities

It incorporates only the assets and

liabilities.

Preparation: Prepared first, preparation

of the trial balance is independent of

preparation of the balance sheet.Its prepared on the basis of the trial

balance and some other additional

information that might not have been

included in the trial balance.Use: Meant only for internal use. It is prepared both for internal as well as

external use.

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Thank You