Fundamentals of accounting

Accounting Liabilities
 Is the art of science of recording, classifying and  Obligation to pay for a product or service
summarizing in a significant manners and in terms  utang
of money transaction and events which are in o Current liabilities
part of financial in character and interpreting the o Non-current / Long term liabilities
results there of:
Recording – Transactions – Business, Personal Owner’s Equity
Classifying accounts – Accounts – Assets,
o Owner’s Capital / drawing
liabilities, Capital/equity
Summarizing – Statement of financial position, Revenue
comprehensive income, cash flow
 Income received by the business
Rules of debit & Credit  Bayad sa business nyo
1. Personal Accounts Expense
Capital – credit
 Nessesary payment or cash-out for normal
Drawing – debit operations of the business
 Mga bayarin na nabayaran na ng kumpanya
2. Real Accounts
Assets – Debit (Normal bal) Type of business
Liabilities – Credit (normal Bal) Service
Note: Sa Journal entries it depends kung san  Firms that generally use their employees to
sya nakalagay provide service
 Mga business na nag bibigay ng serbisyo.. Wala
3. Nominal Accounts
silang binibigay sayo na tangible na bagay
Expense – Debit
Revenue/gains – Credit except sa pagkain
o Hotels, massage, Restaurants
Major types of accounts
Merchandising
Assets  Firms that buy finished goods from their
 Anything that is valuable to the business. suppliers and resell the same
 Pagmamay-ari ng business  Sila ung mga whole salers or retailers
o Current Assets o SM Department store, Puregold, mercury
o Non-current / Long term assets drug store

Manufacturing
 Firms that create their own product
o Toyota, Gucci, apple
 Accounting process / cycle
Business
Transaction
Preparation of
Business Documents Preparation of
Reversing entries

1. Journalizing
a. General Journal
b. Special journal Preparation of
Post-closing trial balance

2. Posting
c. General ledger
d. Subsidiary ledger
Journalizing and posting of
adjusting and closing entries

Preparation of
Trial balance

Preparation of
Financial Statement
Compilation of data for
a. Statement of
Adjustments
financial position
b. Statement of
comprehensive
Preparation of income
c. Statement of cash
Worksheet flow
Journalizing and posting of
adjusting entries