Written by a professor of Finance working at the Faculty of Management Studies, University of Delhi, the book provides a well-structured introduction to financial and management accounting and can serve as an introductory course book for undergraduate and post-graduate studies.
Presenting a complete overview of the subject while emphasising adoption of a decision-making approach to accounting, the author demonstrates how accounting information is useful to managers and helps students to understand the role of accounting in current business practices. The theme is a discussion of various dimensions of accounting and its uses. Presenting financial and management accounting concepts, it presupposes no prior knowledge of accounting and presents important topics which are interspersed with exercises at the end.
It aims at understanding how accounting decisions affect real company practices. Oriented towards non-accounting financial managers who seek an understanding of the financial implication of business decisions, the book is divided into five major parts where the first part introduces the basic concept of accounting as a system of information for decision-making. The five chapters in this section provide the necessary background that help in acquiring a clear grasp of the basic nature of accounting and the environment in which it is developed and used. The concept of accounting equation describes how the financial statement of a company changes as a result of a series of simple business transactions. Depreciation and inventory valuation methods are also discussed.
Part 2 analyses financial statements. The three chapters in this section concentrate on methods for analysing and interpreting the information contained in the financial statements. The funds-flow statement and the form and content of the statement of cash flows, by both the direct and indirect method, as also the subject of financial statement analysis are discussed.
Part 3 focuses on the appraisal and dynamics of cost behaviour and consists of six chapters which stress on an understanding of the cost behaviour to develop successful business strategies and make rational decisions. Cost-volume-profit analysis, budgeting and relevant costing in managerial decisions are covered to show that cost-volume-profit analysis is a valuable tool in planning and helping in making a wide variety of business decisions. The chapter on budgeting provides the foundation for the managerial functions of planning and control.
The topic ‘Let’s Get Together and Solve’ can help to improve the decision-making skills and promote teamwork; ‘Critical Thinking Exercises’ at the end broaden one’s perspective to develop a number of alternatives to critical thinking activities while analysing accounting information in different ways; ‘Conceptual Analysis’ stresses the application of concepts and of life-cycle costing to any capital investment decision in which relatively higher initial costs are traded for reduced future cost obligations. It is particularly suitable for the evaluation of building design alternatives that satisfy a required level of building performance but may have different initial investment costs, different operating and maintenance and repair costs for different lives.
This is book meant only for prospective accounting managers.
(Macmillan India Ltd, 2/10, Ansari Road, Daryaganj, New Delhi-110 002.)
