Welcome!

Ms. Sharvy Shayne A.

Yanto, Certifed Public
Accountant
 Magna Cum Laude
 April 2018, La Salle College Antipolo
 October 2018 CPALE
 Government Accountant
 3rd trimester in DLSCSBA

 sharvyshayne.yanto@antipolo.benilde.e
du.ph
INTRODUCTION
Name | Age | Address| Strand | School graduated from |
Why did you choose this program? | Expectation |
PRESIDENT
TREASURER
SECRETARY
HOUSE RULES
Arrive on
time.
Raise your
hand before
speaking.
Keep the
classroom
clean and
organized.
= QUIZ
Quiz after
every
meeting/
topic.
Present
your excuse
letter
immediately
 Recitation.
Submit your
index cards on
our next
Name: Program, Year & Section:
Age :
Contact No.:
Email Address:
BRING YOUR
CALCULATOR
S ALWAYS!
ACCOUNTING AND
ITS ENVIRONMENT
ACCOUNTING
 Is the language of business
 Quantifies business communication
 Is an information systems
 Is the system that measures
business activities, processes
information and communicates the
results to decision makers
ACCOUNTING – a service activity
 Its function is to provide
quantitative information primarily
financial in nature about economic
entities that is intended to be useful
in making economic decisions.
ACCOUNTING – an information system
 It measures, processes and communicates
financial information.
 It is the process of identifying, measuring and
communicating economic information to permit
informed judgments and decisions by users of
the information.
 It 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.
FUNDAMENTAL
BUSINESS MODEL
TYPES OF BUSINESSES
(ACTIVITY)
SERVICES
TRADER/ MERCHANDISING
 WHOLESALE
Goods are sold in large
quantities to the retailers,
industries and other
businesses
Creates link in between
manufacturer and retailer
Lower Price
Less Competition
Huge Capital
Requirement
Extended
Limited Products
RETAIL
Goods are sold to the
final consumer in small
lots
Creates link in between
wholesaler and customer
Higher Price
High Competition
Little Capital
Requirement
Limited (Market)
Different Products
MANUFACTURE
RAW MATERIALS
INFRASTRUCTURE
TRADER/ MERCHANDISING
FINANCIAL
INSURANCE
FORMS OF BUSINESS
ORGANIZATIONS
SOLE PROPRIETORSHIP
 Single owner called proprietor
 The owner receives all profits,
absorbs all losses and is solely
responsible for all debts of the
business.
 The owner or sole proprietor is
distinct from the proprietorship
or business.
PARTNERSHIP
 Owned and operated by two or more
persons who binds themselves to
contribute money, property or industry
to a common fund with the intention of
dividing the profits among themselves
 Each partner is personally liable for any
debt incurred by the partnership.
 The partnership is distinct from the
partners.
CORPORATION
 Owned by its stockholders
 Its an artificial being created by
operation of law, having the rights of
succession and the powers, attributes
and properties expressly authorized by
law, or incident to its existence.
 The stockholders are not personally
liable for the corporation’s debt.
MICRO, SMALL AND
MEDIUM ENTERPRISES
MICRO ENTERPRISES
 Are those with assets, before
financing, of 3 (before 1.5)
million or less and employ not
more than nine workers.
SMALL ENTERPRISES
 Are those with assets, before
financing, of above 3 (before
1.5) million to 15 million and
employ 10 to 99 workers.
MEDIUM ENTERPRISES
 Are those with assets, before
financing, of above 15 to 100
million and employ 100 to 199
workers.
ACTIVITIES IN BUSINESS
ORGANIZATIONS
FINANCING ACTVITIES
 Are the methods an organization
uses to obtain financial
resources from financial markets
and how it manages these
resources in financial markets
INVESTING ACTVITIES
 Are the methods an organization
uses to obtain financial
resources from financial markets
and how it manages these
resources
OPERATING ACTVITIES
 Involve the use of resources to
design, produce, distribute and
market goods and services
PACIOLI’S DOUBLE-
ENTRY BOOKKEEPING
 DEBIT
 CREDIT
MEMORANDUM
 Book where all transactions are
recorded, in the currency in
which they are conducted, at
the time they are conducted
JOURNAL (book of original entry)

 Entries made here are in one

currency, in chronological order
and in narrative form
LEDGER (book of final entry)

 Is an alphabetical listing of all

business’s accounts along with
the running balance of each
particular account
FUNDAMENTAL
CONCEPTS
ENTITY CONCEPT
 An accounting entity is an
organization or a section of an
organization that stands apart
from other organizations and as
a separate economic unit.
PERIODICITY CONCEPT
 Subdivided into equal time
periods for reporting purposes
 It allows the users to obtain
timely information to serve as
basis on making decisions future
activities
STABLE MONETARY UNIT CONCEPT

 The Philippine Peso is a

reasonable unit of measure and
that its purchasing power is
relatively stable.
 Ignores the effects of inflation in
accounting records
GOING CONCERN
 Financial statements are normally
prepared on the assumption that
the reporting entity is a going
concern and will continue in
operation for the foreseeable future
 No intention nor need of liquidation
Generally Accepted
Accounting Principles
GAAP

 Encompass the conventions,

rules and procedures necessary
to define accepted accounting
practice at a particular time
 CRITERIA
 RELEVANCE – it results in an information
that is meaningful and useful to the users
 OBJECTIVITY – the resulting information is
not influenced by the personal bias or
judgment of those who furnish it
 FEASIBILITY – the extent it can be
implemented without undue complexity
or cost
BASIC PRINCIPLES
OBJECTIVITY PRINCIPLE

 Accounting records and statements

are based on the most reliable data
available so that they will be
accurate and as useful as possible
 Can be confirmed by independent
observers
HISTORICAL COST

 The principle states that acquired assets

should be recorded at their actual cost
and not at what management thinks
they are worth as at the reporting date.
REVENUE RECOGNITION PRINCIPLE

 Revenue is to be recognized in
the accounting period when
goods are delivered or services
are rendered or performed,
regardless of time of receipt of
payment.
EXPENSE RECOGNITION PRINCIPLE

 Expense is to be recognized in
the accounting period when
goods or services are used or
performed, regardless of time of
of payment.
ADEQUATE DISCLOSURE

 Requires that all relevant

information that would affect
the users’ understanding and
assessment of the accounting
entity be disclosed in the
financial statements
MATERIALITY
 It depends on the size and
nature of the item judged in the
particular circumstances of its
omission
 Cost over benefit
CONSISTENCY PRINCIPLE

 The firms should use the same

accounting method from period
to period to achieve
comparability over time within a
single enterprise
FUNDAMENTAL PRINCIPLES
OF AN ACCOUNTANT
 INTEGRITY
 OBJECTIVITY
 PROFESSIONAL
COMPETENCE AND DUE
CARE
 CONFIDENTIALITY
 PROFESSIONAL BEHAVIOR
CAREER
OPPORTUNITIES
 Public practice
 Commerce and Industry
 Government Service
 Academe
BRANCHES OF
ACCOUNTING
AUDITING
 Is an independent examination
that ensures the fairness and
reliability of the reports that
management submits to users
outside the business entity
BOOKKEEPING
 Is a mechanical task involving
the collection of basic financial
data
COST BOOKKEEPING,
COSTING, COST ACCOUNTING
 Is the process that involves the
recording of cost data in books
of accounts
FINANCIAL ACCOUNTING

 Is focused on the recording of

business transactions and the
periodic preparation of reports
FINANCIAL MANAGEMENT

 Is the process of setting financial

objectives, making plans based on
those objectives, obtaining the
finance needed to achieve the
plans and generally safeguarding
the financial resources of the entity
MANAGEMENT ACCOUNTING
 It incorporates all types of
financial and non-financial
information from a wide range of
resources
GOVERNMENT ACCOUNTING
 It is concerned with the
identification of the sources and
uses of resources consistent
with the laws
TAXATION
 Includes the preparation of tax
returns and the consideration of
the tax consequences of
proposed business transactions
or alternative courses of action.