4 QUARTER

TH

INTRODUCTION
TO
ACCOUNTING
Accounting 
⮚ is the process of recording
financial transactions pertaining
to a business.
BUSINESS: Computer Shop
Business Transactions – take
place once a business venture
starts operation. These are the
interactions between business
and other stakeholders.
Functions of Accounting
•To fulfill the stewardship function of
the management (owners)
•To help interested users come up
with informed decisions.
•To support daily operations of the
business.
Whole process

PART
Raw materials Laborers
Machines Shop own / rent
Labor intensive

is the relative proportion

of labor used in any given
process. 

(Skilled Laborers)
capital intensive
-refers to business
processes or industries
that require large
amounts of investment
to produce a good or
service and thus have a
high percentage of fixed
assets, such as property,
plant, and equipment
(PP&E).
Relationship Between the Strategy
and their Operations and the
Importance of cost Information
With that Strategy
DEBIT
----an entry recording an amount owed, listed
on the left-hand side or column of an account.

"a double-entry system of bookkeeping, where

each debit has a corresponding credit entry”
CREDIT
-----an entry recording a sum received, listed
on the right-hand side or column of an
account.

"the columns should be added across and

down and the total debits should equal the
total credits"
A T-account is an informal term for a set
of financial records that use double-entry
bookkeeping.

It is called a T-account because the

bookkeeping entries are laid out in a way
that resembles a T-shape.
1. A business pays a supplier 100 in cash, which
account does it credit?

a. accounts payable
b. cash
1. A business pays a supplier 100 in cash, which
account does it credit?

a. accounts payable
b. cash
2. A business buys new plant and machinery from
a supplier who gives 30 days credit. Which
account should the business debit?

a. Fixed asset
b. Cash
2. A business buys new plant and machinery from
a supplier who gives 30 days credit. Which
account should the business debit?

a. Fixed asset
b. Cash
3. Goods are bought on credit for 300, is the
entry to the purchases account a debit or a
credit?

a.Debit
b. Credit
3. Goods are bought on credit for 300, is the
entry to the purchases account a debit or a
credit?

a.Debit
b. Credit
4. Cash is introduced to a business by the
owner as equity. Which account does the credit
entry go to?

a. Loan account
b. Capital account
4. Cash is introduced to a business by the
owner as equity. Which account does the credit
entry go to?

a. Loan account
b. Capital account
A friend of the owner lends the
business 1,000. Which account is credit
entry made to?
A.Cash
B.Loans
A friend of the owner lends the
business 1,000. Which account is credit
entry made to?
A.Cash
B.Loans