ACCTG 112 Notes-ish

01
Accounting as a
Language of
Business
Topic 1
 4 Phases of Accounting

Recording Summarizing
To know the I III Realizing the items
transactions within the into reports.
accounting period.

Classifying Interpreting
To know which items
II IV Giving a conclusion to
the operations/financial
belong to a particular
standing of a company.
category.
Phases of Accounting
Recording
● Also termed as
Journalizing
● Uses General Journal
(Book of Original Entry)
Classifying
● Also termed as Posting
● Uses General Ledger
(Book of Final Entry)
Summarizing
● Uses Trial Balance
● Financial Results
of a Company
Interpreting
● Making Economic
Decisions
● Reporting to the
higher-ups of the company
Summarizing Notes

Financial Statements
Used: Debit Credit
● Income Statement Value Received Value Parted
● Balance Sheet with
● Statement of Changes in
Owner’s Equity
● Statement of Cash Flow
02

Accounting as a
Service Activity
Topic 2
 Accounting
● A service activity
● Functions to provide quantitative information;
● Primarily financial in nature which involves
economic activities/entities;
● Intended for making economic decisions
 3 Points of Accounting

Quantitative Financial Making Economic

Information in Nature Decisions
Economics
Deals with production that caters to consumption.

The key players to economics:

● Producers > Production
● Consumers > Consumption
 Activities of Accounting

Identifying Measuring Communicating

● Analytical in nature ● Technical in nature ● Formal in nature
● Whether a certain ● Uses computations ● For parties interested in
business activity is that may apply to the results of the financial
accountable or not the business. statements
accountable. E.g. owners (cash),
government (tax),
consumers (financial standing)