Ch1 Flashcards
Involves the process of identifying, recording, and communicating financial information to internal and external users alike.
Accounting
there should be a transfer of things with value
Identification of economic events relevant to a business
serves as the history of its financial activities.
systematically and chronologically.
inputted in the accounting books.
Recording of relevant events to a
business
FINANCIAL STATEMENTS are the end products of the accounting process.
Communicating the summarized results of all events with a particular period to interested parties.
it is composed of multiple steps that lead to a common end goal, which is to provide financial information to internal and external parties.
ACCOUNTING is a PROCESS
“It entails creativity and skills to help us attain some objectives”
- It is a combination of techniques and its applications requires applied skills and expertise
ACCOUNTING is an ART
It deals only with quantifiable financial transactions.
Nonfinancial data may be used to interpret and better estimate some financial data.
ACCOUNTING deals with Financial Information and Transactions
It is a TOOL, not the OBJECTIVE.
ACCOUNTING is a means and not an end
It is characterized as a storehouse of information.
ACCOUNTING is an Information System
“the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by the users of information.”
American Accounting Association
“the art of recording, classifying, and summarizing 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.”
American Institute of CPAS
Roles of an Accountant:
►To prepare financial reports for the business
► Assumes the responsibility of devising systems and methods to safeguard the properties owned by the business.
►Analyzing and interpreting the financial statements.
►Explain to the proprietor the condition of the business.
Functions of Accounting
► Keeping systematic record of business transactions
► Protecting properties of the business
► Communicating results to various parties in or connected with the business
► Meeting legal requirements
Eight Branches of Accounting
- Financial Accounting
- Management Accounting
- Government Accounting
- Auditing
- Tax Accounting
- Cost Accounting
- Accounting Education
- Accounting Research
A branch of accounting primarily handling the recording of financial transaction of business.
Financial Accounting
standardized accounting reports.
Provide information useful to a wide range of users in their economic decisions.
Financial Statement
(PFRS)
Philippine Financial Reporting Standards
(PAS)
Philippine Accounting Standards
Financial statements that can be acquired directly from the company.
General Purpose Financial Statements
Financial statements that are used for specific purpose, internally or externally.
Special Purpose Financial Statements
A branch of accounting which focuses on the preparation of financial reports used by managers in their day-to-day decision making.
For internal use only.
Need not follow accounting standards.
Prepared more often with comparisons to budgeted amounts.
Management Accounting
(CIMA)
Chartered Institute of Management Accountants
Management Accounting Skillset
- Analysis.
- Strategy.
- Risk.
- Planning.
- Communication.
An accounting system which encompasses the process of analyzing, recording, classifying, summarizing and communicating all transactions involving receipt and disposition of government fund and property and interpreting the results thereof.
Government Accounting
NGAS
New Government Accounting System
GAA
Government Appropriations Act
COA - responsible for the keeping of the government’s general accounts.
Commission on Audit
An unbiased examination and evaluation of the financial statements of organization
Auditing
Financial statements that underwent the process of auditing are called
audited financial statements
Taxes are lifeblood of the government. Without taxes, the government cannot perform its functions. Thus, it is imperative that the collection of taxes be unhindered.
Tax Accounting
A branch of accounting that provides information for management accounting and financial accounting
Cost Accounting
Cost Accounting
Terms used:
- Cost
- Cost object
- Cost driver
- Direct cost
- Indirect cost
- Fixed cost
- Variable cost
One of the four fields of the Accountancy Profession.
Teaching accounting related subjects, business and finance.
Must be a Certified Public Accountant
Accounting Education/ Academe
A branch of accounting that deals with the creation of new knowledge.
Accounting Research
