Introduction to
Accounting
Lecture No.1
By : Mr.Atif Iftikhar
Organization
Organization
Organization
An organization that produces
goods or services to satisfy
customer needs and generate
profits.
Types of Businesses
A business
A business owned by two or
owned by one more people.
person.
Sole Proprietorship Partnership
A legal entity separate from its
owners.
Corporation/ Organization
New Book Shop
• Contact : Wholesaler / Publisher
• Expenses: Advertisement
• Paid Salary
• Electricity Bill
• Shop Rent
• Travelling
Accounting
Recording of Business data
Classification of recorded data
Analysis of summarized data
Prepration of Statements & Reports
Introduction To Accounting
Accounting is often described as the
“language of business” because it
is the system used to measure,
record, and communicate financial
information.
Introduction To Accounting
The process of recording financial
transactions that take place in a
business.
Objectives Of Accounting
To keep systematic record
Knowledge of Financial Position
Describe the Liquidity Position
Facilitate the Financial Decision-Making
To provide information to various parties
Provide information about embezzlement
Accounting Information
• Accounting information is the data
collected and processed to provide
insights into a company's financial
performance and position.
• This information can be used by
various stakeholders.
Accounting Information
• Internal Users: Employees, managers,
and owners who use accounting
information to make decisions within the
company.
Accounting Information
• External Users: Investors, government
agencies, and customers who use
accounting information to assess the
company's financial health and
performance.
Users of Accounting
Information
Owner
Management / Employees
Researchers
Creditors
Government
Investors
Lenders
Accounting
Information
Internal Vs
External
Users
Internal users
Resource Performance
allocation evaluation
Accounting It helps to assess
information helps the performance
managers decide of departments.
where to allocate
resources
effectively.
Internal users
Strategic planning
Accounting information is
essential for developing and
implementing business
strategies.
External users
Investment
Credit decisions
decisions
Investors use
Creditors use
accounting
accounting
information to
information to
assess the
evaluate the
company's
company's
investment
creditworthiness.
potential.
Types of Accounting
Financial Accounting Managerial Accounting
This type of accounting focuses This type of accounting provides
on providing information to information to internal users for
external users. It includes decision-making within the company.
financial statements like the It includes cost analysis, budgeting,
income statement, balance and performance evaluation.
sheet, and cash flow statement.
Example: A company's income
statement shows its profits or losses Example: A manager might use cost
over a specific period, while the balance analysis to determine the most cost-
sheet shows its assets, liabilities, and effective way to produce a product.
equity at a particular point in time.
Accounting Systems
Accounting Systems
Accounting systems are the methods
and procedures used to record,
classify, summarize, and report
financial information. They can be
manual or computerized.
Accounting Softwares
computerized accounting system
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