Accounting Concepts Upload

8/3/2019 Accounting Concepts Upload

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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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