Introduction to Accounting

Sir Chua's Accounting Lessons PH

Accounting (Definition)
Accounting is a service activity. Its function is to provide quantitative information, primarily financial in
nature, about economic entities that is intended to be useful in making economic decisions, and in making
reasoned choices among alternative courses of action. (Accounting Standard Council)

 Accounting is a service activity

o we provide accounting services with the fee
 Accounting is to provide quantitative information, primarily financial in nature
o we provide quatitative (base on number) and financial information
 Accounting is about economic entities
 Accounting is intended to be useful in making economic decision and alternative courses of action

Nature of Accounting

 Art
o it is a design process
 Financial
o how much
 Process
o step by step procedure
 Information System
o record keeping methodology

Function of Accounting

 Maintenance of systematics records

 financial results of an entity can be communicated
o Accounting is the Language of business, because its serves as a communication tool for the
owner or the managers of a company to understand the operations of the entity better in
financial terms.
 Meeting legal requirements
o Statutory Requirements - requirement specified by an authority mandated by a legislative body. 
 Protecting assets of a business
 Assistance to management

History of Accounting