Name: RIO ANDREA P.

MARQUEZ

BSA

ENGAGE

a. Why do we need to keep records ? Explain.

In Accounting we need to keep records in order prepare accurate financial statements.
These include income (profit and loss) statements and balance sheets. Also keeping the
records of business can really help to know if the business is growing in making profit or
not.

b. Define Accounting.

Accounting is the process of recording financial transactions pertaining to a business.

The accounting process includes summarizing, analyzing and reporting these
transactions to oversight agencies, regulators and tax collection entities. Also
Accounting is the art of recording, classifying and summarizing, in a significant
manner, and in terms of money, transactions and events which are in part at least of
a financial character, and interpreting the results thereof. ( AICPA, 1953 par.9 )

c. Why Accounting is said to be language of business.

Accounting is the language of the business because accounting is used to communicate

financial information, it is often called the language of business used to accumulate data
about a firm's financial affairs, classify the data in a meaningful way, and summarize it in
periodic reports called financial statements.

d. Is Accounting the same as bookkeeping? Support your answer.

No accounting is not the same with bookkeeping because bookkeeping is the procedural or
mechanical aspect of accounting. It involves the set-up, update and maintenance of
accounting records while Accounting is conceptual and goes beyond bookkeeping.
Accounting includes the interpretation recorded under bookkeeping. Bookkeeping may be
done even properly trained non-accountants, while the practice of accountancy can be done
only by Certified Public Accountants.
E X P L O R E

Matching Type

Choices

A. Business Enterprise G. Corporation B.

Incorporators H. Managerial Accounting

C. Single Proprietorship I. Bookkeeping

D. Financial Accounting J. Public Accounting

E. Partnership K. Comptroller

F. Service Business L. Merchandising Business

1. A business organization owned by one person. C

2. The area of accounting that provides audit & Tax Services. J

3. Chief accounting officer of a large business organization. K

4. The aspect of accounting that is related to the recording of transactions up to the preparation of
financial statements. I

5. Field of accounting that deals with providing information needs of the internal decision
makers.H

6. Group of persons that initially organized a corporation. A

7. Organizations that are formed for the purpose of making profit G

8. Branch of accounting that is concerned primarily with the preparation of general purpose
financial statements. D

9. A trading business. L

10. Two or more individuals, joining their resources together to form a business. E
E V A L U A T E

TRUE OR FALSE ( State why )

TRUE 1. Government Acctg. Deals with the proper custody, disposition and Accounting

for private funds.

TRUE 2. Double -Entry Bookkeeping was invented by Friar Luca Pacioli.

FALSE3. A CPA candidate must have an average of at least 75% with no grade lower

than 60% in order to pass the CPA Board Examination.

FALSE 4. When a partnership has five or more partners, it automatically converts into

a Corporation.

FALSE5. A partnership is always owned by two individuals.

TRUE 6. Manufacturing entities always earn more than merchandising entities.

TRUE 7. Bookkeeping is the procedural portion of Accounting process.

TRUE 8. One of the disadvantages of a corporation is that it is subject to greater

scrutiny and regulation by the government.

FALSE 9. Presidential Decree 1081 governs the practice of Accountancy in the Phils.

FALSE10. Management Accounting is concerned primarily with external reporting

TRIE11. The members of the Professional Regulatory BoaRD OF Accountancy are

appointed by the Professional Regulation Commission (PRC).

TRUE 12. Accounting identifies measures and Communicates information about

economic entities for use in making economic decisions.

FALSE13. Cost accounting measures a business's costs to help management in

controlling expenses.

TRUE14. One of the characteristics of a corporation is that shareholders are personally

liable for any losses incurred in the business.

FALSE15. A service business is the most basic legal form of business organization.