BCOC-131 Financial Accounting DeVry University, New York ACCT 303BLOCK 1.

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THEORETICAL FRAMEWORK UNIT 1 Nature and Scope of Accounting 5 UNIT 2 Accounting Process and Rules 23 UNIT 3 Accounting Principles 37 UNIT 4 Accounting Standards 60 BCOC-131 Financial Account... ing Indira Gandhi National Open University School of Management Studies 2 Theortical Framework PROGRAMME DESIGN COMMITTEE B.COM (CBCS) Prof. Madhu Tyagi Director, SOMS, IGNOU Prof. R.P. Hooda Former Vice-Chancellor MD University, Rohtak Prof. B. R. Ananthan Former Vice-Chancellor Rani Chennamma University Belgaon, Karnataka Prof. I. V. Trivedi Former Vice-Chancellor M. L. Sukhadia University Udaipur Prof. Purushotham Rao (Retd.) Department of Commerce Osmania University, Hyderabad Prof. R. K. Grover (Retd.) School of Management Studies IGNOU Prof. D.P.S. Verma (Retd.) Department of Commerce University of Delhi, Delhi Prof. K.V. Bhanumurthy (Retd.) Department of Commerce University of Delhi, Delhi Prof. Kavita Sharma Department of Commerce University of Delhi, Delhi Prof. Khurshid Ahmad Batt Dean, Faculty of Commerce & Management University of Kashmir, Srinagar Prof. Debabrata Mitra Department of Commerce University of North Bengal Darjeeling Faculty Members SOMS, IGNOU Prof. N V Narasimham Prof. Nawal Kishor Prof. M.S.S. Raju Dr. Sunil Kumar Dr. Subodh Kesharwani Dr. Rashmi Bansal Dr. Madhulika P Sarkar Dr. Anupriya Pandey COURSE DESIGN COMMITTEE Prof. Madhu Tyagi Director, SOMS, IGNOU Prof. A.A. Ansari Jamia Millia Islamia, New Delhi Ms. Surbhi Gupta Vivekananda College University of Delhi, Delhi Faculty Members SOMS, IGNOU Prof. N. V. Narasimham Prof. Nawal Kishor Prof. M.S.S. Raju Dr. Sunil Kumar Dr. Subodh Kesharwani Dr. Rashmi Bansal Dr. Madhulika P. Sarkar Dr. Anupriya Pandey COURSE PREPARATION TEAM Preparatory Course in Commerce: PCO-01 (Unit-1, 2 and 3 Revised by Dr. Sunil Kumar) Prof. J. Satyanarayan, Osmania University, Hyderabad Prof. V. Vishwanadham, Osmania University, Hyderabad Dr. D. Obul Reddy, Osmania University, Hyderabad Shri M. Satyanarayana, Badruka College, Hyderabad Prof. M.S.S. Raju (Course Coordinator & Editor) Dr. Sunil Kumar (Course Coordinator & Editor) Dr. Sunil Kumar (Unit-4) Print Production June, 2019 Indira Gandhi National Open University, 2019 ISBN-978-93-89200-06-5 All rights reserved. No part of this work may be reproduced in any form, by mimeograph or any other means, without permission in writing from the Indira Gandhi National Open University. Further information on the Indira Gandhi National Open University courses may be obtained from the University’s Office at Maidan Garhi, New Delhi-l10068 or website of INGOU www.ignou.ac.in Printed and published on behalf of the Indira Gandhi National Open University, New Delhi by Registrar, MPDD, IGNOU, New Delhi. Laser Typeset by : Rajshree Computers, V-166A, Bhagwati Vihar, (Near Sec. 2, Dwarka), Uttam Nagar, New Delhi-110059 Printed by : Sh. Sudhir Kumar Section Officer (Pub.) MPDD, IGNOU Sh. Y. N. Sharma Assistant Registrar (Pub.) MPDD, IGNOU 3 BLOCK 1 THEORETICAL FRAMEWORK This block will introduce you to the core area in Commerce. In order to appreciate the need for accounting, You have to practice accounting and require a clear understanding of the nature and scope of accounting, the language used in accounting and the principles that guide the accountant. This block also deals with basic rules of double entry system and accounting standards which provides the basis for accounting policies in order to prepare the financial statements. This block is structured to cover these and other related aspects. It is hoped that this block will provide you the necessary theoretical background to understand and appreciate accounting in the right perspective. It covers four units. Unit 1 explains the nature and scope of accounting and the importance of accounting information to various parties. Unit 2 analyse the basic rules of double entry system and their application. Unit 3 presents some of the terms commonly used in accounting and the basic concepts underlying accounting. Unit 4 deals with Accounting Standards which provides the basis for accounting policies and for preparation of financial statements. [Show More]

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