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    JOANNA ROSE MANALO
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    This document defines accounting and discusses its key principles and functions. It provides 3 definitions of accounting from various accounting bodies that emphasize accounting as (1) a service that provides quantitative and financial information, (2) identifying, measuring, and communicating economic information to permit informed decisions, and (3) recording, classifying, and summarizing financial transactions and events. It also outlines the important accounting principles of identifying accountable events, measuring them in monetary terms, and communicating the results through financial reporting.

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    ACC 101 - INTRODUCTION

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    This document defines accounting and discusses its key principles and functions. It provides 3 definitions of accounting from various accounting bodies that emphasize accounting as (1) a service that provides quantitative and financial information, (2) identifying, measuring, and communicating economic information to permit informed decisions, and (3) recording, classifying, and summarizing financial transactions and events. It also outlines the important accounting principles of identifying accountable events, measuring them in monetary terms, and communicating the results through financial reporting.

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    © All Rights Reserved
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    10 views9 pages

    Acc 101 - Introduction

    Uploaded by

    JOANNA ROSE MANALO
    This document defines accounting and discusses its key principles and functions. It provides 3 definitions of accounting from various accounting bodies that emphasize accounting as (1) a service that provides quantitative and financial information, (2) identifying, measuring, and communicating economic information to permit informed decisions, and (3) recording, classifying, and summarizing financial transactions and events. It also outlines the important accounting principles of identifying accountable events, measuring them in monetary terms, and communicating the results through financial reporting.

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    of 9

    FINANCIAL ACCOUNTING AND

    REPORTING

    ACC 101 | Almira Diosa D. De Castro, CPA


    How DO YOU DEFINE
    ACCOUNTING?
    Accounting Standards Council Committee on Accounting
    provides the following definition: Terminology of Certified Public
    Accountants defines accounting as:
    ACCOUNTING is a service activity. Its
    function is to provide quantitative ACCOUNTING is the art of recording, classifying,
    information, primarily in nature, about summarizing in a significant manner and in terms
    economic entities, that is intended to be of money, transactions and events which are in
    useful in making economic decision. part at least of a financial character and
    interpreting results thereof.

    American Accounting Association


    defines accounting as follows:

    ACCOUNTING is the process of identifying, measuring and


    communicating economic information to permit informed
    judgment and decision by users.
    IMPORTANT POINTS
    1. quantitative information

    2. financial in nature

    3. useful in decision making


    Any guesses?

    “the very purpose of accounting is to provide quantitative


    information to be useful in making an economic decision”
    identifying
    ● this is the recognition or nonrecognition
    of business activities as “accountable”
    events.

    ● Accountable - when it has effect on


    asset, liabilities and equity

    ● External and internal transactions -


    economic activities involving one entity
    and another and the entity only,
    respectively

    ○ Purchase of tin cans from supplier

    ○ Loaning money from the bank

    ○ Production of milk powder to evaporated milk

    ○ Unanticipated loss due to earthquake


    Measuring

    assigning of peso amounts to the transactions


    communicating THE ACCOUNTANCY PROFESSION
    ● Process of preparing and
    ➔ R.A. No. 9298
    distributing accounting reports to
    ➔ “Philippine Accountancy Act of
    potential users of accounting
    information 2004”
    ● “Universal language of business” ➔ Board of Accountancy
    ➔ Three year accreditation
    ◆ Public accounting/Auditing
    ◆ Taxation services
    ● Recording - maintaining a record ◆ Private accounting
    ◆ Government accounting
    of all economic transactions
    ➔ Continuing professional
    ● Classifying - sorting or
    education (CPE)
    grouping similar and
    interrelated transactions
    ● Summarizing - preparation of the
    financial statements
    GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (gaap)
    ★ Accounting standard setting body
    ★ Conventional, generally created by the Professional
    accepted by agreement rather Regulation Commission (PRC) by
    than formal derivation recommendation of BOA

    ★ Based on experience, reason, ★ Approved statements of FRSC are


    custom, usage known as Philippine Accounting
    Standards (PAS) and Philippine
    ★ “Rules, procedures, practice Financial Reporting Standards
    and standards followed in (PFRS)
    preparation and presentation
    of financial statements ★ Composed of 15 members with a
    Chairman with a term of 3 years

    Financial reporting standards council (FRSC)


    END

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