lesson 1 introduction Flashcards
accounting is considered as the ?
language of business
it is a service activity which function is to provide quantitative information primarily financial in nature, about economic entities that is intended to be useful in making economic decisions
accounting
branches of accounting
financial
managerial
cost
taxation
financial accounting is governed by ?
Philippine Financial Reporting Standards Council (PFRS)
it is the preparation of general-purpose financial statements
financial accounting
financial acctg provides acctg info to?
external users
individuals or enterprises that have financial interest in the business but they are not involved in the day to day activities
external users
examples of external users
business contacts
lenders
customers
investors
analysts/advisers
government and their agencies
independent auditors
public
branch of accounting that is not governed by the PAS
managerial accounting
managerial accounting needs acctg information for
planning, organizing, directing, and controlling business operations
it provides acctg information to internal users
managerial accounting
are those who make decisions directly affecting the internal operations of the business
internal users
samples of internal users
managers
employees
officers
internal auditors
branch of acctg that helps in making decision as to reduction or increase of selling prices
cost accounting
focused on gathering cost information that is useful in determining prices
cost accounting
key players in cost accounting
selling price
cost
profit
branch of accounting that prepares the tax returns and provide tax advice
taxation / tax accounting
branch of accounting that revolves around cost computation, cost control, and cost reduction
cost accounting
branch of accounting that helps management make effective decisions about business
management accounting
it prevents business from incurring cost beyond budget
cost accounting
it offers a big picture of how management should strategize
management accounting
branch of acctg that has a narrow scope
cost acc
cost acc as to measuring grid
quantitative onl
management acc as to measuring grid
both quanti and quali
cost acc as to subset
cost acc is one of the many subsets of management acc
management acc as to subset
management acc is pretty vast
cost acc as to basis of decision-making
historic information is the basis of decision-making
management acc as to basis of decision-making
historic and predictic information are the basis
cost acc as to statutory requirement
statutory audit of cost acc is a requirement in big business houses
management acc as to statutory req
audit of management acc has NO statutory req
cost acc as to dependence
cost acc is NOT dependent on management acc to be successfully implemented
management acc as to dependence
it is DEPENDENT on both cost and financial acc for successful implementation
cost acc as to its use
management, shareholder, and vendors
management acc as to its use
only for management
types of inventory
raw materials inventory
work in process inventory
finished goods inventory
formula for gross purchase
purchased raw materials/purchases + freight in
formula for net purchase
gross purchase - purchase discount & purchase returns and allowances
formula for direct materials used
direct materials, beginning + net purchases - direct materials, ending
formula for product cost/inventoriable cost/total manufacturing cost
direct materials + direct labor + manufacturing overhead (indirect materials)
formula for total goods put into process
work in process, beginning + total manufacturing cost
formula for cost of goods manufactured
tgpip - work in process, ending
formula for cost of goods available for sale
cgm + finished goods inventory, beginning
formula for cost of goods sold/cost of sales
cogafs - finished goods inventory, ending
legal way of reducing or eliminating tax dues (tax minimization)
tax avoidance
illegal way of reducing or eliminating tax dues (tax dodging)
tax evasion
