FINANCIAL

ACCOUNTING
AND REPORTING

SUBMITTED BY
Mepua, Cedric O.

GRADE/SECTION
BSA 1-A-1

SUBMITTED TO
Mr. Ariel Serrano
  To check your understanding of Lesson 1 assigned for 2
weeks (Weeks 2 and 3), kindly refer to Lesson 1 Learning
Objectives below and answer/discuss/explain each item.

1. Define and understand what accounting is and explain its

purpose and objective.
>Accounting is the process of recording financial
transactions pertaining to a business, the purpose of accounting is
to record and report a company or business financial transactions,
the objective of accounting is to keep a systematic record of
financial transaction which helps the users to understand and gain
knowledge about over all business.

2. Identify the users of accounting information and discuss their

needs.
>There are three primary users of accouting information
first is internal users are owners, directors, managers, employees
of the company, the second one is external users that consist of
creditors, investor, government, trading partners, regulatory
agencies, international standardization agencies and journalist, the
last one is government is a separate type of external user that is
also interested in a company’s performances.

3. Understand what a business organization is and differentiate

forms of business organization according to ownership and
according to nature/type.
 >Business organization is an entity formed for the purpose
of carrying on commercial enterprises. The different types of
business oraginization are sole proprietorship, partnership and
corporations. Sole proprietorship are owned by one person while
partnership are started when two parties pull resources.
Corporations are large companies owned by shareholders.

4. Determine the different activity types of a business

organization.
>Operation activities refer to the core activities performed
by an entity daily like production, sales, and marketing operating
activities are inherent to every entity. Investing activities originate
when an entity engages in tasks like purchasing and selling
property, plant, and equipment. Financing activities are associated
with collecting funds for a firm’s growth and attaining financial
strength.

5. Identify the qualitative characteristics of accounting

information.
>Relevance in regards to accounting information, is a
characteristic that can help individuals make decisions related to a
business's finances. Representational faithfulness sometimes
known as financial reliability, is information that properly indicates a
company's transactions, resources and overall financial assets in
representational faithfulness there are 3 types which is
COMPLETENESS, NEUTRALITY and FREE FROM ERROR.
Verifiability To create accurate financial predictions, a company
ensures that its financial information is verifiable. Understandability
since decision-making for a company often involves professionals
outside of the accounting department, such as managerial
professionals, it's important that financial reports are easy to
understand. Comparability is an essential part of accounting
information because it helps professionals differentiate and analyze
financial reports that help make decisions and last one is
Timeliness involves how rapidly accounting information is available
to professionals.

6. Appreciate the underlying assumptions, and fundamental

concepts and principles of accounting.
>In underlying assumption there are 4 basic
assumptions of financial accounting economic entity, fiscal period,
going concern and stable dollar. In fundamental concept of
accounting includes record keeping which is the primary function of
accounting while in principles if accounting there are 5 basic
principle which is revenue recognition principles, cost principle,
matching principle, full disclosure principle and objectivity principle.

7. Understand the accounting process as an input-process-output

(IPO) model.
>input–process–output (IPO) model of teams provides a
framework for conceptualizing teams. The IPO model suggests that
many factors influence a team's productivity and cohesiveness. It
provides a way to understand how teams perform, and how to
maximize their performance.

8. Differentiate the elements of the financial statements,

familiarize the accounting process, and enumerate the basic
financial statements.
 >There 5 elements of financial statement assets,
liabilities, equity, revenues and expenses. There are 4 basic
financial statement which is balance sheet, income statement, cash
flow statement and statement of shareholders equity.

9. Understand the basic and expanded accounting equation, and

learn some basic account titles/descriptions.
> The expanded accounting equation is a form of the
basic accounting equation that includes the distinct components of
owner's equity, such as dividends, shareholder capital, revenue,
and expenses. Five types of accounts include assets, liabilities,
equity, revenue, and expenses. Account titles are classified/mapped
under different heads depending on their nature. For instance, cash
is an asset and is classified under the asset category.

10. Differentiate bookkeeping vs accounting, identify common

branches of accounting, and briefly distinguish the 4 sectors of
accountancy.
>Bookkeeping focuses on recording and organizing
financial data while accounting is the interpretation and
presentation of that data to business owners and investors. There
are 8 branches of accounting they are financial accounting, cost
acoounting, auditing, managerial accounting, accounting
information system, tax accounting, forensic accounting and lastly
fiduciary accounting. The four sectors of accountancy are
corporate, public, government and forensic accounting.