NIETES, KRISTEL JOY E.

MODULE 1: ASYNCHRONOUS ACTIVITY

ANSWER THE FOLLOWING QUESTIONS

A. WATCH THE VIDEO ATTACHED FOR THE HISTORY OF ACCOUNTING.

1. After watching the attached video for the history of accounting, what are the four different phases
of the history of accounting?
Answer:
The different phases of the History of Accounting include the following:
A. DEVELOPMENTAL PERIOD (PRE – 1494)
This a period is included in the primitive age which are also divided into 4 stages:
a) Stone Age – used image, symbol, cave engraving for bookkeeping
b) Ancient Age – making knots using rope, making marks on walls and used
bamboo for keeping accounts.
c) Exchange Age – started to calculate the exchange of goods thru paintings on the
walls or carving in the woods. In this age, the abacus began to use in China.
d) Money Age – currency is being used as the medium of transactions.

B. PRE -ANALYTICAL PERIOD (1994 – 1800)

During this period, trade and commerce expanded so fast. Luca Pacioli discovered the
basis of accounting which is the debit & credit.

C. ANALYTICAL PERIOD (1800 – 1950)

Modern accounting and accounting research started in this era. Also, theories are
invented during time period.

D. CURRENT/MODERN PERIOD (POST 1950)

Great impact of technology in science of accounting. Financial transactions are kept in
computerized systems than manually.

B. READ THE PRESENTATION MATERIAL ATTACHED AND ANSWER THE FOLLOWING QUESTIONS.
2. Define Accounting in your own words.
Answer:
Based on my understanding, accounting is an activity that is responsible for interpreting,
analyzing, collecting, classifying, recording, and summarizing financial transactions of businesses,
regulators, and taxpayers.

3. What are the different activities involve in accounting as it relates to your daily activity as a
student?
Answer:
The different activities that involves accounting as I relate to my daily activities as a student
includes:
 Budgeting my allowance and managing my daily expenses (such as food, transportation,
etc.)
 Analyzing the grades that I received from written works and exams.
 Savings for future use.
NIETES, KRISTEL JOY E. MODULE 1: ASYNCHRONOUS ACTIVITY

https://www.accountingverse.com/financial-accounting/introduction/qualitative-characteristics.html
https://corporatefinanceinstitute.com/resources/knowledge/accounting/qualitative-characteristics-of-
accounting-information/
4. What are the fundamental qualitative characteristics? Define each.
Answer:
The fundamental qualitative characteristics includes the following:
 Relevance – refers to how the information is helpful in the financial decision-making
processes of the users. For the relevance of financial information, it should have
predictive value and confirmatory value.
 Faithful representation – or also known as reliability refers to information that
accurately reflects the financial transactions. The faithful representations are the extent
to which the information is complete, neutral, and free from error.

5. What are the enhancing qualitative characteristics?

Answer:
The enhancing qualitative characteristics includes the following:
 Comparability
 Timeliness
 Verifiability
 Understandability

6. Define corporate governance.

Answer:
Corporate governance is the system of rules, practices, and laws by which the businesses are
operated, managed, directed, and controlled. Corporate governance includes principles of transparency,
accountability, and security. Having good corporate governance increases the perception, reputation,
and prosperity of the company.

7. Give at least three (3) generally accepted accounting principles and relate it to your activity as a
student.
Answer:
 Revenue Recognition – it is like in submitting an activity to the professor, the professor
will only acknowledge my work and give me a grade when I submit the activity that
he/she assigned.
 Consistency Principle – it is like using a programming language, if the professor states
that the programming language that we are going to use is java, then, I should stick to
using java than using Cobol. Because Cobol and java have different syntax and
structures.
 Historical Cost – it is like ordering online, let’s say I ordered a webcam last month that
has an original price of 500 pesos, I will record it to my financial transactions and by the
11.11 Sale, the price of the webcam depreciates for only 250 pesos. The original price is
still recorded.

8. What are the assumptions made in Accounting?

Answer:
 Monetary assumption
 Economic entity assumption
NIETES, KRISTEL JOY E. MODULE 1: ASYNCHRONOUS ACTIVITY

9. What is the objective of financial reporting?

Answer:
The objectives of financial reporting are listed below:
 User’s decisions involve decisions about Buying, selling or holding equity or debt
instruments, providing or settling loans and other forms of credit and voting or
otherwise influencing management’s actions.
 To make these decisions, users assess the prospects for future net cash inflows to the
entity and management’s stewardship of the entity’s economic resources.
 To make both these assessments, users need information about both - the entity’s
economic resources, claims against the entity and changes in those resources and claims
how efficiently and effectively management has discharged its responsibilities to use the
entity’s economic resources.

According to International Accounting Standard Board (IASB), the objective of financial

reporting is “to provide information about the financial position, performance and changes in financial
position of an enterprise that is useful to a wide range of users in making economic decisions.”

https://www.edupristine.com/blog/financial-reporting

C. ITEMS FOR FURTHER RESEARCH

10. What are the different branches of accounting?
Answer:
There are eight types of financial accounting. Each branch has come about thanks to
technological, economic or industrial developments and has its own specialized use. Accountants tend
to specialize in one branch. Some of these branches of accounting are important to small businesses.
1. Financial Accounting
 Financial accounting involves recording and classifying business transactions,
and preparing and presenting financial statements to be used by internal and
external users.
 Financial accounting involves recording and categorizing transactions for
business. This data is generally historical, meaning it’s from the past.

2. Cost Accounting
 Often times considered as a subset of management accounting, cost accounting
refers to the recording, presentation, and analysis of manufacturing costs.
 Cost accounting is most commonly used in the manufacturing industry, an
industry that has a lot of resources and costs to manage.

3. Auditing
There are two types of auditing: external and internal auditing.
 External auditing refers to the examination of financial statements by an
independent party with the purpose of expressing an opinion as to fairness of
presentation and compliance with GAAP.
 Internal auditing involves evaluating how a business divides up accounting
duties, who is authorized to do what accounting task and what procedures and
policies are in place.
NIETES, KRISTEL JOY E. MODULE 1: ASYNCHRONOUS ACTIVITY

4. Managerial Accounting
 Also known as management accounting, this type of accounting provides data
about a company’s operations to managers.
 Managerial accounting involves financial analysis, budgeting and forecasting,
cost analysis, evaluation of business decisions, and similar areas.
 This branch deals with the needs of the management rather than strict
compliance with generally accepted accounting principles.

5. Accounting Information Systems

 Accounting information systems (AIS) involves the development, installation,
implementation, and monitoring of accounting procedures and systems used in
the accounting process.
 This can include accounting software management and the management of
bookkeeping and accounting employees.

6. Tax Accounting
 Tax accounting helps clients follow rules set by tax authorities. It includes tax
planning and preparation of tax returns.
 Tax accounting also helps businesses figure out their income tax and other taxes
and how to legally reduce their amount of tax owing. Tax accounting also
analyzes tax-related business decisions and any other issues related to taxes.

7. Forensic Accounting
 This is one of the popular trends in accounting today. Forensic accountants need
to reconstruct financial data when the records aren’t complete.
 Forensic accounting focuses on legal affairs such as inquiry into fraud, legal
cases and dispute and claims resolution.

8. Fiduciary Accounting
 This branch of accounting centers around the management of property for
another person or business. The fiduciary accountant manages any account and
activities related to the administration and guardianship of property.
 Examples of fiduciary accounting include trust accounting, receivership, and
estate accounting.

https://www.freshbooks.com/hub/accounting/8-branches-of-accounting
https://www.accountingverse.com/accounting-basics/types-of-accounting.html
NIETES, KRISTEL JOY E. MODULE 1: ASYNCHRONOUS ACTIVITY

11. What are the forms of business organizations? Compare and contrast them.
Answer:
The forms of business organizations are: Single/ Sole Proprietorship, Partnership and
Corporation
Form of Business
Meaning Advantages Disadvantages
Organization
- are firms legally owned
by only one person.  Total control of the  Unlimited liability
- Sole proprietorships business  Lack of structure
1. Single/ Sole have one owner who  No public disclosure  Difficulty in raiing
Proprietorship makes all of the business required funds
decisions, and there is no  Easy tax reporting  Lots of Work
distinction between the  Low start-up costs
business and the owner.
- are firms legally owned  Possibility for
 Easy to establish
by two or more people. disagreements
 Partners can
- Single, small business  Difficulty in
2. Partnership combine expertise
owners often choose this transferring
 Distributed
type of business ownership
workload
organization.  Full liability
- A corporation is the  Owners aren't  Double taxation for
most formal business responsible for C-corporations
entity. business debts  Annual record-
- is a business  Tax exemptions keeping
organization that has a  Quick capital requirements
3. Corporation separate legal personality through stocks  Owners are less
from its owners. involved than
- Ownership in a stock managers
corporation is
represented by shares of
stock.

http://mdesjarlais.weebly.com/business-types.html#:~:text=Compare%20and%20contrast%20three
%20forms,by%20two%20or%20more%20people.
https://www.accountingverse.com/accounting-basics/types-of-businesses.html
https://willcoxlaw.com/2019/02/15/types-of-business-organizations-advantages-and-disadvantages/
https://www.indeed.com/career-advice/career-development/forms-of-businesses
NIETES, KRISTEL JOY E. MODULE 1: ASYNCHRONOUS ACTIVITY

12. What are the different types of business activities? Which one is applicable to this course you are
taking right now?

Answer:
Business activities are classified into operating, investing and financing activities.
1. Operating Business Activities
 The first section of the cash flow statement is cash flow from operating
activities.
 Operations includes every activity needed to manufacture a product or provide
a service. Operations is an essential business function, because without a
product or service to sell, a business has no reason to exist.
 Activities to accomplish those aims include creating production schedules,
taking inventory, equipment maintenance, measuring quality and efficiency, and
designing workflows.

2. Investing Business Activities

 Investing activities are in the second section of the statement of cash flows.
 Marketing activities go beyond merely creating ads that entice customers.
 Marketing activities determine the needed performance specifications of a
company's products and services, the proper pricing, the best distribution
channels and packaging. Consumer and marketplace studies, promotion and
sales also fall under marketing's purview.

3. Financing Business Activities

 The cash flow statement's final section includes financing activities.
 These include initial public offerings, secondary offerings, and debt financing.
 Creating budgets, allocating funds throughout the company, determining
investments, protecting assets, managing credit and preparing financial reports
are other necessary financial activities.

The applicable type of business activity in course is the operating. Why? It simply because we, IT
people (in the making) are the one who creates and enhance systems that will provide
convenience to every business for productive and efficient works. In operating activities in
accounting, it involves gathering raw resources, converting those resources into something to
sell and scheduling and controlling the process of conversion same as with operating activities in
information technology. But, in IT operation it is more on hardware and software while in
accounting it is more on financial activities.

https://yourbusiness.azcentral.com/three-principal-types-business-activities-9543.html
https://www.investopedia.com/terms/b/business-activities.asp