Dec 9, 2020 – Dec 10, 2020 – YT Review Notes

THE ACCOUNTING PROCESS

- series of steps or procedures needed to be performed by an entity to provide financial info

needed by users.

-can be divided into two phases.

1. Recording phase

It has three steps:

 Analyzing the source docs.

- Identifying

o (identify if irerecord ba yung transactions or not/ determining whether

yung events are accountable)

Note:

 accountable ang event if may effect sa assets, liab and equity,

inc and exp.

 External Events

1. reciprocal transfers or exchange

-the entity will give up its resource for another resource.

- (eto yung maggigive up ng assets for another asset si entity or
yung pag-extinguish ng liabilities using another resource which
equals the liab.)

Ex. Acq. of PPE for cash, pymnt. of liab, collection of rcvbls.

2. Non- reciprocal

- receipt without giving or give without receipt, one way of

transfer lang sya.

Ex. Donation, transactions with owners in the perspective of

investee ie. Pymnt. of dividends, issuance of share capital in
exchange of consideration *(medyo lito pa ako sa concept nito)
issuance of share capital in exchange of consideration –
reciprocal sa perspective ni Investor (nawalan sya ng cash but
merong investment.
 3. External Events Other than Transfers

-may ext. participation pero walang exchange involved.

-Ex. Changes in Fair Value, vandalism, technological

obsolescence and impairment)

 Internal Events
-Ex. Casualty Losses, Production (conversion of raw mats to
finished goods), Bilogical transformation (nagmature or
nanganak yung baboy, nagbago yung presyo. ( review mo yung
biological assets di ko magets sinsabi ng reviewer tsk.)

Note: regardless if internal or external kung nakakaaffect sya sa elements of fs,

irerecord natin sya or accountable event sya. Lahat ng examples sa taas,
accountable events sya.

-Measuring

o Magkano. Imemeasure kung magkano yung accountable events.

Basically the process of assigning the peso value to the accountable
events.

Bases of Measurement:

1. Old Conceptual Framework:

-Historical Cost
-Current Cost (Replacement Cost) – (magkano pag iaacquire ng bagong
bago)
-Realizable Value (magkano matatanggap upon disposal)
-Present Value of Cash Flows or Discounted Value
-Fair Value
-Fair Value less Cost of Disposal
-Inflation Adjusted Prices (Hyperinflationary economy)

-Classifying

o Classify kung anong element yung affected nya. Ano yung idedebit at
icrecredit. Saang account dapat irecord.

 Journalizing
2. Summarizing phase