Introduction to Accounting Mind Map

ЁЯПл MP BoardClass 11Accountancy
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Visual Mind Map & Concept Tree (English)

Structured concept hierarchy, subtopic relationships, and exam revision tree.

Introduction to Accounting

  • Meaning and Definition

    • Identification of financial transactions
    • Measurement in terms of money
    • Recording in books of accounts
    • Classifying through ledger posting
    • Summarizing via Trial Balance and Financial Statements
    • Communicating results to users

  • Economic Events

    • Internal Events (e.g., depreciation of machinery)
    • External Events (e.g., sale of goods to a customer)

  • Book-keeping vs Accounting

    • Book-keeping
      • Routine and clerical nature
      • Primary stage (Recording and Classifying)
      • Performed by junior staff
    • Accounting
      • Analytical and decision-making nature
      • Secondary stage (Summarizing, Interpreting, Communicating)
      • Performed by senior staff

  • Objectives of Accounting

    • Maintain systematic records of business transactions
    • Determine profit or loss (Income Statement)
    • Determine financial position (Balance Sheet)
    • Facilitate rational decision making
    • Provide information to users
    • Satisfy legal requirements (Tax, Companies Act)

  • Users of Accounting Information

    • Internal Users
      • Management
      • Owners/Shareholders
      • Employees
    • External Users
      • Investors
      • Creditors/Banks
      • Government and Authorities
      • Tax Authorities
      • Researchers and Public

  • Branches of Accounting

    • Financial Accounting (Historical profit/loss and financial position)
    • Cost Accounting (Determining cost of products/services)
    • Management Accounting (Decision making and internal control)
    • Tax Accounting (Tax computation and filing)
    • Social Responsibility Accounting (Measuring social contribution)

  • Qualitative Characteristics of Accounting Information

    • Reliability (Verifiability and neutrality)
    • Relevance (Timeliness and predictive value)
    • Understandability (Clarity and presentation)
    • Comparability (Consistency and inter-firm comparison)

  • Role of Accounting

    • Acts as language of business
    • Provides historical record
    • Serves as managerial tool
    • Ensures stewardship of resources