Certification in Financial Accounting

Part 1: Introduction to Accounting

3.1. Introduction Accounting is a systematic process of collecting, recording, summarizing, and interpreting financial data to provide useful economic decisions and to communicate the financial activity of an entity. The double-entry accounting system, which records every financial transaction in at least two accounts, is widely used around the world.

3.2. Accounting standards in India In India, the accounting standards are set by the Institute of Chartered Accountants of India (ICAI), which is a regulatory body for accounting and corporate governance in India. The ICAI has adopted many International Financial Reporting Standards (IFRS) as Indian Accounting Standards (Ind AS) to ensure global uniformity and comparability of financial statements.

4. Accounting equation and accounting cycle

4.1. Introduction The fundamental accounting equation is the core principle in accounting, which expresses that: Assets = Liabilities + Equity This equation reflects the concept of stewardship and provides a basis for the preparation of financial statements.

4.2. Accounting cycle The accounting cycle represents the sequence of steps taken by an organization to record all economic events for a reporting period and to present financial information in the form of financial statements. The cycle consists of the following steps:

1. Identifying and recording transactions
2. Posting transactions to the journal
3. Updating the ledger accounts based on the journal entries
4. Performing closing entries to zero out temporary accounts
5. Preparing an unadjusted trial balance to verify that debits equal credits
6. Adjusting entries to account for accruals, deferrals, and other adjustments
7. Preparing an adjusted trial balance
8. Preparing financial statements, including the income statement, balance sheet, and statement of cash flows
9. Closing the accounts for the fiscal period

5. Preparation of journal, ledger and balancing

5.1. Introduction The preparation of journals, ledgers, and balancing are essential components of the accounting cycle. Journals record transactions as they occur, while ledgers provide a detailed account of all financial activities. Balancing involves ensuring that debits equal credits in each account and reconciles any discrepancies.

5.2. Opening Journal Entry An opening journal entry is made to record the initial transactions of an accounting period. It sets up the accounts for the new period. 6-6. Balancing Balancing refers to the process of checking all the ledger account balances to ensure that debits equal credits. If they don't, the discrepancy must be corrected before financial statements are prepared. Part 2: Advanced Accounting 6-7. Depreciation and Amortization Depreciation is the process of allocating the cost of an asset over its useful life. Amortization is similar to depreciation but often used in the context of intangible assets or debt obligations. 7. Budgeting and Forecasting Budgeting involves planning and forecasting may involve predicting financial activity and outcomes for future periods. 8. Cash Flow Analysis Cash flow analysis is the examination of an entity's ability to generate positive cash flow from its operating, investing, and financing activities. 9. Ratio Analysis Ratios are used to gain insights into the financial health of a company. Common size ratios include liquidity ratios, profitability ratios, and market value ratios. 10. Internal Control Systems Internal control systems are processes implemented by management to provide reasonable assurance that all financial transactions are recorded properly in the entity's accounting records. Part 3: Computerized Accounting and Practical Applications

1. Introduction to Tally Tally is an integrated business software package widely used in India for accounting, inventory management, and tax compliance for various Indian taxes like GST (Goods and Services Tax). 1.2. About Tally Tally is a comprehensive business application that handles various aspects including accounting, inventory management, and tax compliance. It is designed to cater to the small and medium enterprise segment and to facilitate businesses to comply with various regulatory compliances like GST (Goods and Services Tax). 1.3. VAT Features in Tally ERP 9 Tally ERP 9 includes features for GST compliance such as input tax credit ledger, output tax ledger, inter-state tax ledger, and central excise tax ledger among others. 1.4. Starting the Tally To start with Tally ERP 9, one must first install the software on their computer system and then configure it according to their business requirements. 1.5. Creating VAT Ledger In Tally, a VAT Ledger is created to track all VAT transactions for GST compliance purposes. 1.6. Creating an Input Tax Ledger An Input Tax Ledger in Tally is specifically used to keep track of all input tax credit (GST) transactions. Part 4: Assignments and Downloadable Resources and Templates

16. Assignments

• Discuss the details of accounting principles.
• Explain accounting standards. What do you mean by Trial balance and balance sheet?
• What do you mean by financial statements and corporate financial statements? Explain about Tally.
• Practice Test 1 and 2.

16. Downloadable Resources and Templates

• Depreciation calculator to calculate depreciation expenses.
• Accounting journal templates for recording transactions.
• Balance sheet templates to prepare financial statements.
• Income statement templates to summarize income, revenue, gains, losses, and expenses.
• Simple cash book templates for maintaining cash book records.
• Inventory management templates to manage inventory in business operations. 16. Case Study A detailed case study will illustrate the practical application of accounting principles and their implementation using Tally ERP 9 software.

16. Practice Assignment Practical assignments will allow students to apply their knowledge of advanced accounting concepts and computerized accounting systems, specifically Tally ERP 9, in various real-world scenarios.

16. Templates Templates for financial statements, depreciation calculator, accounting journal, balance sheet, income statement, and inventory management will be provided to assist with the preparation and recording of accounting transactions and financial analysis.