Assignment, Financial Accounting, BBA-BI 2nd semester, Ace Institute of Management

1. Group Report on
Financial Accounting – I
Accounting system
of an Organization
GROUP MEMBERS
Sweta Singh
Chhitiz Shrestha
Nisha Neupane
Samadhi Tamrakar

2. The Objective
• To understand the basic accounting system of an
organization
• Accounting system varies from company to company
• Accounting system we learn in theories also varies in
practice
• Help understand the process of accounting of an
organization

3. The Purpose
• Describe the accounting methodology
• Compare the theoretical and practical aspect of accounting
• Helps in getting complete information about
– why is accounting done?
– How is accounting done?
– When is accounting done?
– Etc.
• Accounting information of Krishna Pauroti Pvt. Ltd

4. Introduction to Accounting
• The art of recording, classifying, and summarizing in a
significant manner and in terms of money, transactions
and events which are, in part at least, of financial character,
and interpreting the results thereof. - American Institute of
Certified Professional Accountants (AICPA)
• More than 700 year old practice
• Called "the language of business“
• Vital part of day to day financial transaction.

5. Introduction to Accounting
• Functions of Accounting
– To keep complete and systematic record
– To ascertain the net profit and loss
– To ascertain the financial position
– To obtain accounting information

6. Accounting Cycle

7. Introduction of Krishna Pauroti
Pvt. Ltd
• Established by Krishna Bahadur Rajkarnikar in 1947
• Ghana Shyam Rajkarnikar, Krishna's son, now runs the
show
• Krishna Pauroti is located at Kamalpokhari chowk
• The factory is also situated in the same place.
• It is recognized as one of the finest bakeries in Nepal.

8. Types of Accounts
• Different from regular forms of accounting
• Consists of 3 types of accounts
I. Daybook
II. Ledger
III. Book of purchase

9. Daybook
• Account where transactions occurring on the daily basis are
recorded
• The purchases and sales that take place daily is recorded
• Purchases like flour, ghee, butter, milk, cream etc, required
for bakeries are recorded,
• Daily sales in the shop is also jotted down in this book.
• Very essential as it records each and every transaction
happening in the company.

10. Daybook

11. Ledger
• Ledger is another important account in this company.
• After collecting the daily transactions, they are
separated into various small accounts
• Used to get the accurate total of various types of
transaction.
• Small accounts such as salaries, debt, bills paid etc, are
separated and recorded.

12. Ledger

13. Books of purchase
• This account holds only those transactions which are
made by cash
• All the purchases and sales made by cash are recorded
in this account.
• Transactions made in credit and by cheque are
recorded in a separate account.

14. Books of purchase

15. Other forms of accounts
• Besides, they also have a stock account
• Record total product produced and total raw materials
used
• At the end of the year estimation of total purchases and
sales is made
• Eventually the company’s profit or loss is determined

16. Use of these Accounts
• To record various transactions of the company in any form.
• Help the accountants to determine the financial position of
the company
• Profit or loss of the company during a year
• To suggest the manager for various financial strategies.
– which product needs more marketing,
– which product needs more sales,
– Etc.

17. Use of these Accounts
• Helps managers to estimate the salaries and wages of
many workers working in the company
• Helps in the planning process
• These accounts help to omit errors such as double posting,
omission of certain transactions, etc.
• Help the managers to keep accurate transactions between
various dealers and suppliers

18. Conclusion
• Krishna Pauroti Pvt. Ltd, holds no such formal,
structured accounting system.
• The accounting process is rough and is used
internally
• Yet, the account maintained is sufficient to
determine all the outputs the company requires.