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Showing posts from January, 2021

HUMAN RESOURCE MANAGEMENT, OBJECTIVE AND SCOPEOF HRM

  Human resource management is concerned with the "people" dimension in the management. Human resource management means the management of people within an organization . Since,every organization is made up of people, acquiring their services, developing their skills, motivating them to higher level of performance and  ensuring that they continue to maintain their commitment to the organization are essential to achieve organizational objectives. Those organization that are able to acquire ,develop ,stimulate and keep outstanding workers will be both effective and efficient.  Those organizations that are ineffective or inefficient risk the hazards of stagnating or going out of business. Human resource does creates organization and makes them survive and prosper.  If human resources are neglected or mismanaged, the organization is unlikely to do well. "Human resource management is the field of management which has to do with planning organizing and controlling the func...
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WHAT IS DISINVESTMENT ?

  The union  government  invests in several public undertakings (PSUs) such as Air India, Bharat Petroleum, Delhi Metro Rail Corporation etc. Since it is the majority share holder    (meaning that it own more than  51% of the share) the center  can raise money through  the liquidation of  its share - holding  in these PSUs . Such assets sale either reduces the government 's share - like when it attempted to do with the public listing of Life Insurance Corporation in 2020 - or it can also transfer the ownership of the firm altogether to the highest bidder - as it did  with  Bharat  Aluminum Company, which was sold to the Vedanta group in 2021.                                                                                 ...
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CLASSIFICATION OF ACCOUNTS

  PERSONAL ACCOUNTS   The accounts which relate to an individual, firm,company or an institution are personal accounts. For example, account of Harish, account of RCM Ltd, bank account,capital account etc.  RULE OF PERSONAL ACCOUNT  RULE:- Debit the Receiver Credit the Giver We can say that the person who receives something from the business, debit that person's  accounts and the person who give something to the business, credit that person's accounts.  EXAMPLE ● Cash recieved from Moni The entry will be :-  Cash A/c            To Moni (credit the giver) ● Cash paid to Moni The entry will be:- Moni (debit the receiver)          To cash A/c  NEED OF PREPARING PERSONAL ACCOUNTS  Personal accounts is maintained to know the amount to be paid and amount to be received  from personal accounts.  REAL ACCOUNTS  The accounts of all those things whose values can be measured in terms ...
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WHAT IS DOUBLE ENTRY SYSTEM - Definition, principle and advantage

  HISTORY OF DOUBLE ENTRY SYSTEM  Double entry system is the most progressive, scientific and complete system of recording the financial transactions in a business.  According to this, two accounts involved in every business transaction. One of them is debited and other is credited. A book on the double entry system was first of all written in 1494 by LUCA PACIOLI. He is the resident of the city of VENICE IN ITALY. In this book he discussed the methods of recording both the aspects of a transaction that is one is debit and other is credit.  MEANING OF DOUBLE ENTRY SYSTEM  There can be no transaction in the business which effect only one account. As such both the aspects of every transaction recorded under this system. It means at least two accounts are affected by a transaction - one account receiving a benefit and the other account yielding a benefit.  For example - we received ₹ 3,00,000 from Harish. This transaction affects two accounts I.e. Cash Accoun...
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SOURCE DOCUMENTS FOR ACCOUNTING

  SOURCE DOCUMENTS  Source documents are written documents which contain detail of the transactions and prepared at the time when transactions takes place. These supporting documents are the evidences of business transactions which provide information about the nature of a transactions, parties involved, date and the amount involved in it. Now a days these  documents  do not necessarily need to be a physical hard copy  -  they may be in a traceable electronic form. A source  documents is also used by companies as a proof ,when dealing with their business partners, usually in regards to a payment. These  documents are required for audit and tax  assessments. They are also serve as the legal evidence in case of a dispute. The following are the most common source documents  1. CASH MEMO When we purchased goods for cash,we received a cash memo . Detail regarding the items, quantity, rate and the total price is mentioned in the cash memo 2. I...
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WHAT IS ACCRUAL BASIS IN ACCOUNTING

  ACCRUAL BASIS  Under this basis of accounting, revenue is recognized when sales takes place or ownership of goods and services  changes from seller to buyer, whether payment for such sale is received or not . In other words, incomes are recorded when they are earned or accrued, irrespective of the fact whether cash  is received or not. For example   Rent due  to landlords but not paid will be treated as expenses for the period when it is due and not in the period when it is paid. Accrual basis of Accounting is based on realization and matching principle. This make it necessary to consider outstanding expenses, accrued income, prepaid expenses  etc.for the preparation of financial statements.  Company Act 2013 , requires companies to follow accrual basis of accounting, in maintaining books of accounts.  WHY IS ACCRUAL BASIS OF ACCOUNTING  IMPORTANT  1. It disclosed true financial position of business at the end of  a part...
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ASSETS AND LIABILITIES

ASSETS  Anything which, will enable a business enterprise to get cash or a benefit in future is an Asset or  Anything  which is the property of a business enterprise including the amount due from debtors is called an asset . "Assets are future economic benefits, the rights of which are owned or controlled by an organization or individual. "                                                      FINNEY &MILLER  EXAMPLES  1. Cash & Bank  balances  2. Stock  3. Furniture  4. Machinery  5. Land &Buildings  6. Bill  Receivables 7. Debtors  etc.   TYPES OF ASSETS  1. FIXED ASSETS  Fixed  Assets are those assets which are used in business for producing goods and services and are not meant for sale. For example  1. Land & Buildings  2. Plant...
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PRINCIPLES OF ACCOUNTING

  Accounting consist of  Principles, Concepts, Conventions, rules and guidelines developed over a period of time to bring uniformity and consistency to the process of accounting in order to enhance its utility to various users of accounting information.  These principles are based on past experiences, usage or custom, statements by individuals and professionals bodies, and regulations by government agencies.  These principles are not static in nature and are influenced by changes in legal , social,and economic environment.  Accounting principles  1. Business Entity  Principle This Principle assume that  business has a separate and distinct entity from it owners,creditors, managers and others. It means we have to record business transactions from firm's point of view and not from the point of view of the owners.  Because of the principle of separate entity  the owner's house,his personal investment in securities, personal expenses are kep...
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ACCOUNTING CONCEPTS

  Accounting concepts provide a foundation for accounting process. When a business enterprise prepare financial statements ,it is based on some set rules known as policies, principles and conventions. These rules brings  uniformity and consistency to the process  of accounting and enhance its utility to different users of accounting information.  No enterprise can prepare its financial statements without considering these basic concepts and assumptions. These concepts guide how transactions should be recorded and reported.  THERE ARE THREE ACCOUNTING CONCEPTS  1. Going  Concern Concept In this concept, we assumed that business will continue to exist for a long period in future.  For example  when outside parties enter into long term contracts with the enterprise, gives loans and purchase the debentures and share of enterprise, it is because of going concern concept.  According to going concern concept transactions are recorded in the bo...
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WHAT IS ACCOUNTING

  ACCOUNTING  Every  business man wants to know about their financial position at the end of year.  Suppose a businessman starts a business of production of woolen clothes. He invested 20 lakh rupees on that business . He take a loan of 5 lakh rupees from a bank . He purchased material for their business. Keep manager, worker for smooth running of their business. After manufacturing, do promotion of their product.  All these thing are recorded in a book that is called accounting. By keeping a complete and systematic record of every business dealing,the business man can know how  much is the amount of sales, how  much is the amount of purchase. What  are his total expenses and what is the amount of profit earned or loss incurred during a year. Properly maintained  accounts  gives the following  information quickly and businessman can take decisions on behalf of this. Properly maintained accounts gives the answer  of a number of...
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