Scribd
Upload
182 views14 pages

Introduction To Accounting

1. Accounting provides quantitative financial information to help with economic decision making. 2. It involves recording, classifying, and summarizing transactions, as well as interpreting financial information for users. 3. Accounting information has internal users like management and investors, and external users like creditors and government.

Uploaded by

Mylene Salvador
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
182 views14 pages

Introduction To Accounting

1. Accounting provides quantitative financial information to help with economic decision making. 2. It involves recording, classifying, and summarizing transactions, as well as interpreting financial information for users. 3. Accounting information has internal users like management and investors, and external users like creditors and government.

Uploaded by

Mylene Salvador
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 14

Accounting is a service activity which

function is to provide quantitative


information, primarily financial in
nature, about economic entities that is
intended in making economic
decisions.
 Recording – writing down of business transaction
chronologically in the books of account as they
transpire.
 Classifying – sorting similar and related business
transactions into the three categories of assets,
liabilities and owner’s equity.
 Summarizing – preparing the financial statements
from the transactions recorded in the book of account
that are designed to meet the information needs of its
users.
 Interpreting – representing the qualitative and
quantitative financial information about the business
transactions in a language comprehensible to the users
of financial statements. (The language of business)
 Financial Accounting
 Management Accounting
 Government Accounting
 Auditing
 Tax Accounting
 Cost Accounting
 Accounting Education
 Accounting Research
 Internal Users – are primary users of financial
information who are inside the reporting entity and
are directly involved in managing the company’s daily
operation.
 Investors/Owners/Stockholders
 Management
 Employees

 External Users – are secondary users of financial


information who are parties outside the company.
 Financial Institutions / Creditors
 Government
 Potential Investors / Creditors
 Sole / Single Proprietorship – is a business owned and
managed by only one person.
 Partnership – is a business organization owned and
managed by two or more people who agree to
contribute money, property, or industry to a common
fund for the purpose of earning profit.
 Corporation – is a form of business organization
managed by an elected board of directors. The
investors are called stockholders and the unit of
ownership is called share of stock.
 Cooperatives – An association of small producers and
consumers who come together voluntarily to form a
business which they own, manage, and patronize.
 Service –is a type of business operation
engaged in rendering of services.
Example: dental clinic, barber shop, laundry
service
 Trading / Merchandising – is a type of business
operation engaged in buying and selling of
goods.
Example: grocery, sari-sari store
 Manufacturing – is a type of business operation
engaged in the production of items to be sold.
Example: shoe factory, food processing
 Entity Concept – regards the business enterprise as
separate and distinct from its owners and from other
business enterprises.
 Periodicity – is the concept behind providing financial
accounting information about the economic activities
of an enterprise for specified time periods. For
reporting purposes, one year is usually considered as
one accounting period.
 Calendar year – 12 months period that starts from January
1 and ends on December 31.
 Fiscal year - 12 months period that starts on any month of
the year other than January and ends 12 months after the
start period.
 Going Concern – is a concept which assumes that the
business enterprise will continue to operate indefinitely
 Objectivity Principle – states that all business
transactions that will be entered in the accounting
records must be duly supported by verifiable evidence.
 Historical Cost – means that all properties and services
acquired by the business must be recorded at their
original acquisition cost.
 Accrual Principle – states that income should be
recognized at the time it is earned such as when goods
are delivered or services has been rendered. Likewise,
expenses should be recognized at the time they are
incurred such as when goods and services are actually
used and not at the time when the entity pays for those
goods and services.
 Adequate disclosure – states that all material facts that
will significantly affect the financial statements must be
indicated.
 Materiality – means that financial reporting is only
concerned with information significant enough to affect
decisions.
 Consistency – means that approaches used in reporting
must be uniformly employed from period to period to
allow comparison of results between time periods. Any
changes must be clearly explained.
Identify the user of the financial statements in
each of the following statements.
1. Determines the capacity of the business
organization to pay its obligations and their
interests at the appropriate time.
2. Set goals for their companies and evaluate
their progress towards these goals.
3. Decide whether to invest or not depending on
the estimated amount of income on the
investment.
4. Collection of taxes
5. Job stability in the company.
 6. Accounting deals with __________ information.
 7. Accounting is a ____________ not an end.
 8-10. Accounting is an art of ____________,
__________ and _____________ in a significant
manner and in terms of money, transactions and
events which are, in part at least, of a financial
character, and interpreting the results thereof.
 11 _________ is the father of modern accounting.
Enumeration
1-4 Give at least 4 branches of accounting
State the type of business activity performed by
each establishment.
6. SM Hypermarket
7. David’s Beauty Salon
8. Wilcon Depot
9. Ace Hardware
10. Roche Pharmaceutical
11. Bruno Barber Shop
12. JWT Advertising Agency
13. Pure Foods Corporation
14. National Book Store
15. Land Mark Department Store
16. Calayan Medical Clinic
17. Wellness Spa
18. Belo Medical Clinic
19. Siguion Reyna Law Firm
20. Marikina Shoe Makers

You might also like