WEEK 1 – INTRODUCTION TO ACCOUNTING Flashcards
earliest record of accounting
7,000 years ago
Accounting involves quantitative information because ONLY _ transactions are
considered.
monetary
Accounting was considered an _ because it involves applying professional judgment and
creativity
art
they defined accounting as a process
American Accounting Association (AAA)
historical period that saw the development of accounting for tracking
crops and surpluses
Ancient Mesopotamia
defined accounting as a process because it is the way to
provide quantitative information
also defined as service activity
ASC (American Standards Council)
primary form of money-changing and selling in the Middle Ages
Bartering
Father of Accounting
Luca Pacioli
Some of the Functions of Accounting are:
o identification of accounts – first function of accounting.
o recording of transactions
o summarization of information
The description of debit and credit for Latin is _ (debit) means what is due, while _ (credit) refers to something entrusted to another or a loan
debitum
creditum
The key purpose of _ is to track public expenditures and inform planning and decision-making related to the empire’s finances.
The Deeds of the Divine Augustus
they defined accounting as an ART
American Institute of Certified Public Accountants – AICPA
involves the assessment of whether a transaction is considered a “business transaction or accountable event”.
first function of accounting
IDENTIFICATION OF ACCOUNTS
is the function of systematically and accurately capturing financial data related to a business’s operations and activities
RECORDING OF TRANSACTIONS
is the function wherein accounts will be classified as asset accounts, liability accounts, capital or owner’s equity accounts, withdrawal, revenue/income, and expense accounts.
CLASSIFICATION OF ACCOUNTS
involves the function of taking classified accounting information and presenting it in a brief, useful way for both internal and external users
SUMMARIZATION OF INFORMATION
function of documenting and communicating financial activities and performance over specific time periods, typically on a quarterly or yearly basis
FINANCIAL RESULTS REPORTING
