ACCOUNTING: An

introduction
Topic to discuss by: Leizzamar V. Bayadog, CPA
Learning Objectives:
- Define Accounting
- Differentiate Bookkeeping and Accounting
- Identify the different users of Accounting information
- Differentiate Financial Accounting, Cost Accounting, and
Management Accounting

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1 Definition of
accounting
 Accounting is 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 decision.

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2 Accounting VS
bookkeeping
ACCOUNTING VS
BOOKKEEPING
ACCOUNTING BOOKKEEPING
Is the analysis and Is a routine recording of
interpretation of financial economic activities.
information, conduct of
audits and preparation of
financial statements.

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3 USERS OF
ACCOUNTING
INFORMATION
USERS OF ACCOUNTING
INFORMATION
INTERNAL EXTERNAL
1. Owners 1. Prospective owners and potential
investors
2. Managers
2. Lenders and other creditor
3. Government
4. Employees
5. Customers
6. General public

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 FINANCIAL
ACCOUNTING
4 VS
COST
ACCOUNTING
VS
MANAGEMENT
ACCOUNTING
FINANCIAL VS COST VS
MANAGEMENT
FINANCIAL COST MANAGEMENT
Reporting meant for Reporting meant for Reporting meant for
the EXTERNAL both EXTERNAL the INTERNAL users
users of accounting and INTERNAL of accounting
information. users. information.

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QUICK
Answer: d
QUIZ
The basic purpose of accounting is

a. To provide the information that the managers of an economic entity

need to control its operations.
b. To provide information that the creditors of an economic entity can use
in deciding whether to make additional loans to the entity.
c. To measure the periodic income of the economic entity.
d. To provide quantitative financial information about an entity that is
useful in making rational economic decision.

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QUICK QUIZ Answer: a
Financial accounting is the area of accounting that emphasizes reporting to:

a. Management
b. Regulatory bodies
c. Auditors
d. Creditors and Investors

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QUICK QUIZ Answer: b
These users are interested in information that enables them to assess whether
their loans, the related interest thereon, and other amounts owing to them will
be paid when due.

a. Borrowers
b. Lenders and other creditors
c. Owners
d. Managers

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Thanks
!
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