Accounting for Decision Making

OBJECTIVES:

‍Acquire a reasonable knowledge in accounts analysis and evaluate financial statements

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UNIT I FINANCIAL ACCOUNTING

‍Introduction to Financial, Cost and Management Accounting – Generally accepted accounting principles– Double Entry System – Preparation of Journal, Ledger and Trial Balance Preparation of Final Accounts: Trading, Profit and Loss Account and Balance Sheet – Reading the financial statements

UNIT II ANALYSIS OF FINANCIAL STATEMENTS

‍Financial ratio analysis, Interpretation of ratio for financial decisions- Dupont Ratios – Comparative statements – common size statements. Cash flow (as per Accounting Standard 3) and Funds flow statement analysis – Trend Analysis.

UNIT III COST ACCOUNTING

‍Cost Accounts – Classification of costs – Job cost sheet – Job order costing – Process costing – (excluding Interdepartmental Transfers and equivalent production) – Joint and By Product Costing – Activity Based Costing, Target Costing.

UNIT IV MARGINAL COSTING

‍Marginal Costing and profit planning – Cost, Volume, Profit Analysis – Break Even Analysis – Decision making problems -Make or Buy decisions -Determination of sales mix – Exploring new markets – Add or drop products -Expand or contract.

UNIT V BUDGETING AND VARIANCE ANALYSIS

‍Budgetary Control – Sales, Production, Cash flow, fixed and flexible budget – Standard costing and Variance Analysis – (excluding overhead costing) -Accounting standards and accounting disclosure practices in India.