Module1 Introduction To Acctg
Module1 Introduction To Acctg
BOOKKEEPING
The data are first entered in the accounting records or the books of
accounts, and then extracted, classified and summarized in the form of
financial reports.
Branches
Branches of
of Accounting
Accounting
The main branches of Accounting are :
COST ACCOUNTING
Deals with the collection, allocation, and control of the cost of producing
specific goods and services. This accumulation and explanation of actual
and prospective cost data is important to control current operations and
to plan for the future.
FINANCIAL ACCOUNTING
MANAGEMENT ACCOUNTING
Incorporates cost accounting data and adapts them for specific decisions
which management may be called upon to make.
Branches
Branches of
of Accounting
Accounting
The main branches of Accounting are :
TAXATION / TAX ACCOUNTING
GOVERNMENT ACCOUNTING
Public Accounting
Government Accounting
Private Accounting
Accounting Education
PHILIPPINE
PHILIPPINE ACCOUNTING
ACCOUNTING STANDARDS
STANDARDS
ACCOUNTING STANDARDS
The approved statements and the relative interpretations of the ASC are
known as “Statement of Financial Accounting Standards” or SFAS which
will be effective only upon approval by the PRC s
BASIC ACCOUNTING
1. IDENTIFYING
Recognition or norecognition of business activities as “accountable” events.
2. MEASURING
The assigning of peso amounts to the accountable economic transactions and events.
3. COMMUNICATING
Process of preparing and distributing accounting reports to potential users of
accounting information
Financial
Statements
Objective
Objective of
of General
General Purpose
Purpose Financial
Financial
Reporting
Reporting
Employees
Employees are interested in information about the stability and profitability of the enterprise.
Lenders
Lenders are interested in information which enables them to determine wether their loans and
interest thereon will be paid when due.
Customers
Customers have an interest in information about the continuance of an enterprise especially
when they have long-term involvement with or are dependent on the enterprise.
Users
Users of
of Financial
Financial Statements
Statements
Government and their agencies
These users require information to regulate the activities of the enterprise, determine taxation
policies and as a basis for national income and similar statistics.
Public
Financial statements may assist the public by providing information about the trends and
recent developments in the prosperity of the enterprise and the range of its activities.
Fundamental
Fundamental Concepts/Assumptions
Concepts/Assumptions
GOING CONCERN
• A business is assumed to continue to operate for an indefinite period of time.
Historical Cost
This principle states that acquired assets should be recorded at their actual cost and not at what
management thinks they are worth as at reporting date.
Adequate Disclosure
Requires that all relevant information that would affect the user’s understanding and assessment of the
accounting entity be disclosed in the financial statements.
BASIC
BASIC PRINCIPLES
PRINCIPLES
Materiality
Financial reporting is only concerned with information that is significant enough to affect
evaluations and decisions.
Consistency Principle
The firms should use the same accounting method from period to period to achieve
comparability over time within a single enterprise.
Comparability
Means that the financial statements prepared are worth comparing for with other companies of
the same line of business by pointing out similarities and differences