What is Financial Accounting Concepts all about?

By video.utlc2016 | Updated: April 7, 2018, 3:41 a.m.

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This video will further explain to you what is financial accounting concepts is all about,the qualitative characteristics needed and the recording procedures.

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OF PROVIDING FINANCIAL INFORMATION?

WHAT IS THE PURPOSE

to enable users to make well-informed decisions

The information must posses these principal qualitative characteristics

USEFUL
Need accounting information that is applicable to the business decision

UNDERSTANDABLE
Financial information that is too technical can be ineffective for business owners

Assured that it presents an accurate picture of the company financial health

RELEVANT
REALIBILITY
Accounting information should relate to a specific time period or contain information regarding individual business functions

CONSISTENT
COMPARABILITY
to compare against competitor

records financial information in a general ledger

COST AND BENEFITS

will become available in the foreseeable future

What are the recording procedures

in Islamic Accounting?

STEP 1
RECORD THE TRANSACTION IMMEDIATELY

YOU KNOW WHERE YOUR MONEY IS COMING FROM AND WHERE ITS GOING TO

STEP 2
CLASSIFIED THE TRANSACTIONS ACCORDING TO THEIR NATURE

STEP 3
RECORD THE RECEIPTS

STEP 4

RECORD THE PAYMENT & EXPLAIN IT

STEP 5

RECORD TRANSACTIONS & EXPLAIN IT

STEP 6

NO SPACE TO BE LEFT BETWEEN TRANSACTIONS

To avoid manipulation

Why?
STEP 7

FORBIDDEN TO MAKE CORRECTIONS IN THE RECORDING OF TRANSACTIONS

STEP 8

To reflect the closure of account

STEP 9

ALL FAMILIAR TRANSACTIONS RECORDED IN THE PREMILINARY BOOKS TO BE POSTED TO THE SPECIALIZED BOOK

STEP 10

THE POSTING OF SIMILAR TRANSACTIONS TO BE PERFORMED BY PERSON INDEPENDENT FROM THOSE WHO RECORDED THE TRANSACTION

STEP 11

THE BALANCE,CALLED AL-HASEL(THE DIFFERENCE BETWEEN TWO AMOUNT),TO BE EXTRACTED

A MONTHLY OR YEARLY REPORT TO BE PREPARED.THIS REPORT HAD TO BE DETAILED AND PROVIDE SUFFICIENT INFORMATION

A REPORT TO BE PREPARED BY ACCOUNTANT DETAILING ALL GOODS AND FUNDS,UNDER HIS CUSTODY AND MANAGEMENT

STEP 12

STEP 13

ANNUAL REPORTS PREPARED BY ACCOUNTANT ARE TO BE REVIEWED AND COMPARED WITH PRIOR YEAR REPORTS

STEP 14

Thank You

What is Financial Accounting Concepts all about?

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