Financial accounting and reporting (Introduction)
Accounting is said to be the “language of business” as it
uses numbers to record and represent activities.
Accounting is a process of identifying, recording, and
communicating economic information that can help in
making economic decisions.
 Identifying- Identifies whether the transactions are
accountable or not accountable events. Because
only accountable events can be recorded.
“Accountable events or (economic events) are
those that affect the assets, income, liabilities, or
expenses of a business”
 Recording- the accountant recognizes the identified
“accountable events”. Recording process classifies
“journalizing” and after journalizing they will
classifies the effect of the event on the “accounts”
and this process called posting.
“Posting is the transfer the journal entries into a
general ledger”
“Account is the basic storage information in
accounting. (e.g. Cash, land, sales, payables
etc.)
 Communicating- At the end of accounting period,
the accountant summarizes the information
processed in the accounting system in order to
produced information to present and communicate
to those interested users through accounting
reports.
NATURE OF ACCOUNTING
Accounting is the processed with the basic purpose of
providing information about economic activities that are
useful in making economic decisions.
TYPES OF INFORMATION PROVIDED
ACCOUNTING
1. Quantitative Information – Information expressed
in numbers or units. ( e.g. monetary amounts that
expressed using numbers)
2. Qualitative Information- Information expressed in
words or descriptive info. ( e.g. notes to financial
statements)
3. Financial Information- Information that expressed
in money. Financial Info is also a quantitative
information because monetary amounts is
expressed in numbers.
ACCOUNTING AS SCIENCE AND ART
As a social science, accounting is a body of
knowledge which has been systematically
gathered, classified, and organized.
As a practical art, accounting requires a creative
skills and judgement.
ACCOUNTING AS AN INFORMATION SYSTEM
It consist input, processed, and output. The input is
all the accountable events (identifying) while the
processed are (recording/ posting), classifying, and
summarizing. And the output is the accounting
report that can be presented to users
(communicating).
BOOKKEEPING AND ACCOUNTING
Bookkeeping refers to the process of recording
the accounts or transactions of the entity. Mainly
related to Identifying, Measuring, and recording.
Accounting covers the whole process identifying,
recording, and communicating. Mainly related to
summarizing, interpreting, and communicating
information to interested users.
BRIEF HISTORY OF ACCOUNTING
Accounting has been around as far back as the
prehistoric times (1.2 B.C or 2.5 million years
ago) When mankind begin to trade, perhaps
more than 10 000 years ago accounting have
been invented.
8500 B.C accounting has already existed.
Archaeologist have found clay tokens (cones,
disk, sphere, and pellets) as old as 8500 B.C in
Mesopotamia. Tokens were used to express
numerical quantities of goods or the
representation of the commodities such as
sheep, clothing, or bread.
After some time the token were replaced by wet
BY clay tablets. And the experts concluded this to be
the start of the art of writing.
In the middle ages (13th and 15th centuries) trade
flourished (umunlad pa lalo ang trading) in places
such as Venice, Florence, And Genoa. This has
brought advancement in accounting methods.
1340 A.D double entry record first came out in
Genoa.
1949, the first systematic record “ double entry
recording system” was formulated by Fra Luca
Pacioli a Franciscan monk and Italian
mathematician. The double recording system
was entitled “Suma di Arithmetica Geometria
Proportioni and Proportionista” Publish on
November 10 , 1949. The double entry is being
used to this day, thus Luca Pacioli is considered
as the father of modern accounting.
 Managerial Economics (Introduction)
MANAGERIAL ECONOMICS Branch of economics which
deals with the organizations internal issues with the
application of economic theories or various concepts,
theories, methodologies of economics to solve practical
problems, ease decision making and future planning in
business management. Managerial economics is a
science dealing with the effective use of scarce
resources.

This study emphasizes the solving problems in business

using the theories micro and macroeconomic. The key of
managerial economics is the microeconomic theory
because it lessen the gap between economics in theory
and economic in practice.

- (Two conceptual approaches to the study of

economics; Microeconomics studied phenomena
related to goods and eservices from the
perspective of individual decision-making entities
that is households and business. Microeconomic
studies how individuals and business make
decisions to allocate scarce resources. [The
demand are high and the supply is low.]
Macroeconomics approaches the same
phenomena at an aggregate level, like the
total consumption and production of a
region. Macroeconomics studies the
decision made by the countries and
government or a study of an economy as a
whole. )

MANAGERS BENEFITS

Managerial economics helps managers to decide on the

planning and control of the benefit. It assist the managers
to have a rational solution to obstacles faced in the firms’
activities and helps formulating logical managerial
decisions.

STUDENTS BENEFITIS

It helps student to enhance their analytical skills,

developing a mindset that enables them to find a rational
solution.