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 BUSIACC - MODULE 1

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 Review on Basic Concept
of Accounting
Busiacc/ Business Accounting

Ma. Liza B. Igbuhay, CPA, MBA, DBA

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 ACCOUNTING defined

➢ 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.

➢ The art of recording, classifying

and summarizing in a significant
manner and in terms of money,
transaction and events which are
part at least of a financial character
and interpreting the results thereof
(AICPA).
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➢ Accounting is the language of
business.
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 Business defined

is an organization in
which basic
resources are
assembled and
processed to provide
goods or services to
customers or clients.
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 Accounting consists of three basic activities—it

◆identifies,

◆records, and

◆communicate

the economic events of an organization to interested

users

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 Accounting consists of three basic activities—it
The activities of the accounting process

The accounting process includes

the bookkeeping function.

Copyright © 2017 John Wiley & Sons, Inc.

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 Importance of Accounting

The business operates

to generate profit and
accounting keep tracks
of these profits.

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 Accounting

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 Accounting is a Language of
Business

COMPANY
Accumulates accounting
information through its various
transaction

ACCOUNTANT
Processes the financial information and
prepares the financial report

STAKEHOLDERS or USERS
Study the reports prepared before
making economic decisions

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 What is Bookkeeping

Bookkeeping is a basic
procedure in accounting in
keeping track of revenues
and expenses as well as
the assets and liabilities.
Bookkeeper is a person
responsible for keeping of
records of the day to day
routine operations of the
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business.
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 Fields of Accounting (1 of 2)

Financial Accounting – is
a specialized branch
of accounting that keeps track
of a company’s financial
transactions.

- Using standardized guidelines,

the transactions are recorded,
summarized, and presented in
a financial report or financial
statement such as an income
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statement or a balance sheet.
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 Fields of Accounting (2 of 2)
Managerial Accounting – (also
known as cost accounting or
management accounting) is a
branch of accounting that is
concerned with the
identification, measurement,
analysis, and interpretation of
accounting information so that
it can be used to help
managers to make necessary
decisions to efficiently manage
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a company’s operations.
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 Relationship of Accounting to Business

BUSINESS - is a ACCOUNTING -
business as a language of
organization that w business, is used
is operating with h to record and
the objective of i report financial
l
generating profits e
results of
from sale of goods business
and services. operation.
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 Type of Business as to NATURE of Operation
● Service Business
➢ A business engage in providing services
for a fee, to client or customers.
(Examples: Beauty parlor, SPA, travel agency,
school, airline, repair shop)

● Merchandising Business
➢ Engage on buying and selling of goods
or merchandise. (Examples: Shoe Store,
bookstore, drugstore and sari-sari store)

● Manufacturing Business
➢ buys raw materials convert and process
these into a finished product and sells
them to the customers. (Examples: shoe
factories, garment factories, car assembly and
food processing plant).
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 Forms of Business Organization
● Sole Proprietorship
➢ A business set-up and managed by one person.
(Examples: bakery, barber shops, parlor and Spa)

● Partnership
➢ Owned by to or more persons called partners who
contribute money, property and talent into a
common fund for the purpose of sharing profits
among themselves.(Examples: Law firms, audit
firms, doctors, engineers)

● Corporation
➢ Is an artificial being created by operations of law
having the rights of succession and the powers and
attributes expressly authorized by law or incident to
its existence. (Examples: San Miguel Corp., Jollibee
Corp.)
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 Forms of Business Ownership

Proprietorship Partnership Corporation

◆ Owned by one ◆ Owned by two or ◆ Ownership

person more persons divided into
Owner is often shares of stock
◆ ◆ Often retail and
manager/operator service-type ◆ Separate legal
◆ Owner receives businesses entity organized
any profits, suffers under state
◆ Generally
any losses, and is corporation law
unlimited
personally liable personal liability ◆ Limited liability
for all debts
◆ Partnership
agreement

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 Business Goals
● To earn a PROFIT

● To INCREASE its own value as an

economic entity

● To IMPROVE the quality of life in the

community
❖ Provide employment
❖ Livelihood Training
❖ Medical Mission

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 Financial Statements

Companies prepare four financial statements :

Owner’s Statement
Income Balance
Equity of Cash
Statement Sheet
Statement Flows

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 Who Uses Accounting Data?

INTERNAL
USERS

Questions that
internal users ask

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 Who Uses Accounting Data?

EXTERNAL
USERS

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 Registration of Business
Barangay – where your business
is located
2. Registration with Barangay
1.Go to the barangay where your
business is located to secure and
fill-up application form
2.Submit your completed
application form together with the
following:
1. Certificate of Business
Registration from DTI
2. Two (2) valid IDs
3. Proof of Address such as
Contract of Lease (if rented)
or Certificate of Land Title
(if owned)
3.Claim your Barangay Certificate
of Business Registration
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 Registration of Business
REQUIREMENTS FOR NEW
BUSINESS PERMIT
•Completely filled-up Application
form for New Business (2
copies, Notarized)
•Original Barangay Business
Clearance
•DTI Registration (Single
Proprietor)
•SEC Registration (Corporation)
•Lessor’s Permit (If Renting)
http://manila.gov.ph/business-permits/#mp-2 •Tax Declaration of Property (If
Owned)
•Public Liability Insurance
•SPA for Authorized
Representatives with I.D.

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 Registration of Business
1. Go to the Regional District Office (RDO)
where your business is located
2. Fill-up the BIR Form 1901 – Application for
Registration (for Sole Proprietor)
3. Submit completed registration form
together with the following:
1. Certificate of Registration form DTI
2. Barangay Clearance
3. Mayor’s Business Permit
4. Proof of Address such as Contract of
Lease (if rented) or Certificate of Land
Title (if owned)
BIR – Manila Office 5. Valid IDs, if applicable.
Location: Intramuros Manila 4. Pay the Registration Form (BIR Form 0605)
5. Register your book of accounts and
receipts/invoices.
6. Claim your Certificate of Registration (BIR
Form 2303)
After completing all the steps above, you can now
focus in operating and growing your business.

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 Registration of Business

https://kittelsoncarpo.com/doing-business-in-
the-philippines-business-registration-process-
made-simple/

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 References
Images
● Accounting
https://www.merchantmaverick.com/the-beginners-
guide-to-accounting-software-ebook/

● How to start a business

https://www.forbes.com/sites/alejandrocremades/201
9/02/13/how-to-start-a-business/#c23f6ee6e1ad

● Business, Business Essentials

https://www.investopedia.com/terms/b/business.asp.

● Service Business
https://www.digitaldealer.com/dealer-ops-
leadership/dealer-management/2-strategies-bump-
service-business/

● Merchandising Business
https://cbambalan.wixsite.com/entrepreneur-
blog-7/single-post/2015/10/01/How-you-can-
be-successful-on-your-sarisari-store
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 References
Images
● Manufacturing Business
https://entrepreneur.buzz/what-is-manufacturing-
business/

● Image by Mary McLain © The Balance 2019

https://www.thebalancesmb.com/sole-proprietorship-
398896

● Partnership
https://workful.com/blog/partnership/

● Corporation
https://imgbin.com/png/EGXgL4yC/organizational-
culture-business-corporation-png

● Profit
https://www.cpapracticeadvisor.com/payroll/ar
ticle/12318638/four-keys-to-a-more-profitable-
payroll-practice
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Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved.

 References
Images
● Economic Value
https://www.ttec.com/articles/what-economic-value-
better-customer-experience

● Quality of Life
https://steemit.com/lifestyle/@rakesh199249/quality-
makes-you-special

● Business
https://opportunitygroup.ca/starting-a-business-how-
exciting/

● Bookkeeping
https://gusto.com/blog/business-finance/small-
business-bookkeeping
https://www.acs.edu/what-most-people-dont-know-
about-bookkeeping-training-programs/
https://workful.com/blog/bookkeeping-basics/

• Financial Accounting
https://www.wallstreetmojo.com/financial-accounting/
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 Reference

https://www.erptechnicals.com/2019/02/importance-
of-financial-accounting/

https://www.accountingcoach.com/financial-
accounting/explanation#:~:text=Financial%20accounti
ng%20is%20a%20specialized,statement%20or%20a
%20balance%20sheet.

• Managerial Accounting
https://corporatefinanceinstitute.com/resources/knowl
edge/accounting/managerial-accounting/

https://corporatefinanceinstitute.com/resources/knowl
edge/accounting/managerial-accounting/

https://www.dreamstime.com/photos-
images/managerial-accounting.html

https://corporatefinanceinstitute.com/resources/knowl
edge/accounting/managerial-
accounting/#:~:text=Managerial%20accounting%20(al
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so%20known%20as,to%20efficiently%20manage%20
a%20company's
Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved.
 Reference
Video:

• https://en.wikipedia.org/wiki/Luca_Pacioli

Books:

● Weygandt, Kimmel, Kieso (2017): Accounting

Principles, 13th Edition.
https://catatanpenelitianakuntansi.wordpress.com/2
017/09/02/ppt-accounting-principles-13th-edition-
weygandt-kimmel-and-kieso/

● Manuel, Z. VC (2019), 21st Century Accounting

Process, Basic Concept And Procedure, 2019

● Veron, E. Jr., Anastacio, MF. (2020) Accounting

Essentials 2020 Edition

● Baguino, A. et al. (2013). Principles of Accounting.

Allen Adrian Books Inc. June 2013

● https://pia.gov.ph/news/articles/1032175
unsplash.com ● https://mpm.ph/register-a-sole-proprietor-business/
● http://manila.gov.ph/business-permits/
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