BASIC ACCOUNTING FOR

NON-ACCOUNTANTS
LO1: EXPLAIN THE BASIC ACCOUNTING CONCEPTS
AND PROCEDURES
ASSESSMENT CRITERIA:
 •Organizational Structure of the Cooperative

General Assembly

Audit Board of Directors Election Committee

Committee
Chairperson
LEGEND Vice Chairperson
Elected by GA
Appointed by BOD Secretary *
Hired Employee
Outside the BOD Treasurer *
*

Ethics Mediation Education Other

Committee Committee Committee Committees

General Manager

Accountant Cashier

Note:
•The Treasurer and the Secretary must not be members of the Board of Directors. Art. 43 Chapter IV of R.A. 9520 and
the By Laws.
•The Vice Chairman of the Board of Directors serves as Ex-Officio Chairman of the Education and Training Committee,
in accordance with the by-laws.
CONTENTS:
· Organizational Structure of the Cooperative
- Including Flow of Authority, Duties &
Responsibilities of Organizational Bodies
· Principles of Accounting
Including Flow of Information thru the Accounting
System, Users of Information
· Books of Accounts
Including Journals, Ledger, T-Account, Concept of
Debit & Credit
· The Accounting Equation
· The Accounting Cycle Perspective
ACCOUNTING
• It is the art of recording ,classifying and summarizing
in a significant manner and terms of money
transactions and events which are in part at least of a
financial character and interpreting the results
thereof.
• It is often referred to as the language of business.

BOOKKEEPING-is a systematic and

chronological recording business transactions .
FORMS OF BUSINESS
ORGANIZATIONS
• 1. Sole or Single proprietorship -only one person makes the
investment
• 2.Partnership-an association of two or more persons agree to operate
the business as co-owners under certain conditions
• 3.Corporation-a business owned by five or more persons whose
ownership is evidenced by shares of stocks . Each owner is called
stockholder.
• 4. Cooperative- fifteen or more persons agree to organize a
business ,the member is the owner of the business.
NATURE OF BUSINESS OPERATION
• 1.Service type-those which derive their income from
sales of services to clients or customers

2.Trading or merchandising – businesses which buy

goods and without changing their form sell them at
a profit.

3.Manufacturing – these businesses buys raw materials

,convert them into finished products before finally
selling them at a profit
BUSINESS TRANSACTION
• It is an exchange of goods or services
in terms of money. An economic
event or condition that directly
changes an entity’s financial
condition or directly affects the
results of operations
BUSINESS TRANSACTION MUST HAVE THE
FOLLOWING CHARACTERISTICS
• 1. It must be for a sum certain in money.
• 2.It must be supported by a genuine source of documents.
• 3. It must have a two –fold effect on the elements of accounting
equation. The terms of elements of accounting equation refer to
assets, liabilities and proprietorship or equity .
ASSETS
• These are items of value owned and used by the
business.Among others are Cash, accounts
receivable,merchandise, unused supplies, land ,
building delivery trucks and others. Assets may also
include intangible (having no physical existence) such
as patents, copyrights ,franchises and good will.
• Assets are increased when acquired by the business.
Not all assets are obtained by purchases and some by
barter,others in exchange for services rendered. Still
other assets may be the result of investment by the
owner or owners.