1 Flashcards
contained descriptions of the practice of accounting at the time
“Summa de Arithmetica, Geometrica, Proportioni, et Proportionalita”
Italian mathematician scholar and philosopher
Fra Luca Pacioli in 1494
refered to as “Father the of Accounting.
Fra Luca Pacioli
the art of analyzing, recording Classifying, summarizing manner, in a Significant terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof”
ACCOUNTING
an information system measures, processes, and communicates information that means, w/c are primarily financial in nature, about an identifiable entity for the purpose of making economic financials decisions.
ACCOUNTING
Accounting has been referred to as
The language of business
The diagram of the accounting information system
Business Activities
Documents or Supporting Account Papers
Analyzing, Recording, Classifying,
Summanzing
Reporting with Financial Statements
Decisions by Users of Financial Information
Branches of Accounting
1.) Financial Accounting
2.) Management Accounting
3.) Cost Accounting
4.) Auditing
5.) Forensic Accounting
6.) Government Account
7.) Taxation
Scope of Practice of Accountancy
1.) Practice in Public Accounting
2. Practice in Private or commerce and Industry
3. Practice in Academe
4.) Practice in Government
5.) Tax Services
6.) Management
Kinds of Business as to Nature of Operations.
1.) Service/ Servicing
2) Merchandising
3.) Manufacturring
Kinds of Business Organization (as to Ownership:
1) sole-Proprietorship
2.) Partnership
3.) Corporation
4.)cooperative
shows how a company’s assets, related and and equity are liabilities, an how a change in one results in a change to another In the basic accounting eqnation, assets liabilities plus equity. are equal to
acounting equation
anything a company Owns. hold positive can be economic Liquified (turned into cash) future for Instance, Liquid-the company can quickly sell it for money.
Assets
amounts of money the company owes to others.
Liabilities
businesses is a separate entity from its owners
BUSINESS ENTITY
an accounting term for a company that is financially stable enough to meet As obligations and continue it’s business for the foreseeable future.
GOING CONCERN
every financial transaction is recorded in at least two accounts
DOUBLE-ENTRY
Formula
A = L+E
It is the communication linked by the entity and the users of financial information
The Language of business
Users of Financial Statements:
- Owners/Management
2) Present/Potential Investors.
3.) Employees
4.) Lenders
5.) Suppliers
6.) Government Agencies
7.) Public
8.) customers
Kinds of Financial Statements:
1.)Statement of Income
2.) Statement of changes in owner’s/capital equity
3) Statement of Financial Position (Balance Sheet)
4.1 Statement of Cash Flows
5.) Notes to Financial Statements
