PROCESS OF ACCOUNTING

a. Analyzing- examining transactions. For example, you the owner if a business bought a computer equipment. From this transaction you have to
analyze what are the accounts under this transaction. Under this transaction, CASH and COMPUTER EQUIPMENT are involved.
b. Recording- With the help of journal and ledger, you can record the two accounts involved. Debit, Computer Equipment and Credit,
c. Classifying- grouping the same activities together for the purpose of summarizing a total of what happened. Example: grouping all the purchase
made. Or all accounts under Assets, to determine the total amount for each account.
d. Summarizing- totaling the results of each groupings made from the classifying process.
e. Reporting- preparation of the Financial Statement through the help of the summaries.
f. Interpreting- taking information, if the business is gaining or losing. With the help of the Analysis

MANAGEMENT
• includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to
accomplish its objectives through the application of available resources, such as financial, natural, technological, and human
resources. (WIKIPEDIA)
• consists of the interlocking functions of creating corporate policy and organizing, planning, controlling, and directing an
organization's resources in order to achieve the objectives of that policy.

FOUR FINANCIAL STATEMENTS

A. STATEMENT OF FINANCIAL POSITION
• also known as the Balance Sheet, presents the financial position of an entity at a given date.
• provides an overview of assets, liabilities and stockholders' equity as a snapshot in time.
• identifies how assets are funded, either with liabilities, such as debt, or stockholders' equity, such as retained earnings and additional
paid-in capital. Assets are listed on the balance sheet in order of liquidity.
• Liabilities are listed in the order in which they will be paid.

B. STATEMENT OF COMPREHENSIVE INCOME

• also known as the Profit and Loss Statement, reports the company's financial performance in terms of net profit or loss over a specified
period
• covers a range of time, which is a year for annual financial statements and a quarter for quarterly financial statements. The income
statement provides an overview of revenues, expenses, net income and earnings per share. It usually provides two to three years of data
for comparison.

C. STATEMENT OF CHANGES IN OWNER’S EQUITY

• also known as the Statement of Retained Earnings, details the movement in owners' equity over a period.
• Presents changes in equity during the reporting period. The report format varies, but can include the sale or repurchase of stock, dividend
payments, and changes caused by reported profits or losses. This is the least used of the financial statements, and is commonly only
included in the audited financial statement package.

D. CASHFLOW STATEMENT
• presents the movement in cash and bank balances over a period.