Accounting I

•History of Accounting
• Father of Accounting, Luca
Pacioli, Italian
mathematician. He
invented the double entry
system

• For every debit there must

be a corresponding credit
(vice versa)
W H AT I S A C C O U N T I N G ?
 • Accounting is the
process of measuring
and reporting relevant
financial information
about the activities of
an organization or unit
 Accounting
is a:

Systematic Service
Art
process Activity
Nature of accounting

Recording – writing down business transaction logically

Classsifying – sorting similar business transaction

Summarizing – preparing financial statements from the transactions

Interpreting – Giving meaning to the transactions

Users Of Accounting
Information
- Investors
- Creditors
- Government
 Government
Accounting

Different Tax Accounting

Branches of
Management
Accounting Accounting

Auditing
Types of Business organization

SOLE PROPRIETOR – BUSINESS PARTNERSHIP – OWNED BY TWO CORPORATION – MANAGED BY

OWNED AND MANAGED BY ONE OR MORE PEOPLE ELECTED BOARD OF DIRECTORS
PERSON
 Advantages

• Decision making depends on a

Sole single person
• Minimal cost and requirements in
Proprietor formation

Disadvantages

• Resources are limited as the

capital of the owner
• Liability of the owner is unlimited
 Partnership

Advantages Disadvantages
• More funds contributed by • Death or retirement or
owner admission of new partner
will dissolve the partnership
• General partner – has
unlimited liability
Corporation

Advantages
• Limited liability
• More resources from owners (labor, knowledge)
• Unlimited life
Disadvantages
• Costly to create a corporation
• Decision making problems
 SERVICES – TYPES OF BUSINESS TRADING/MERCHANDISING – BUYING AND MANUFACTURING – ENGAGED IN
ORGANIZATION ENGAGED IN RENDERING SELLING GOODS (GROCERY, SARI-SARI PRODUCTION OF ITEMS TO BE SOLD (SHOE
SERVICES (SALON, SPA, ETC) STORE) FACTORY, FOOD PROCESSING)

Types of Business Activities

Determine types of business organization and
type of business activity

Jack Ty and Jill both passed the CPA examination

and later on decided to form T Alunan Auditing
Services

Bill Hee started to rent a stall near his university,

he hire a sales lady to help him sell the school
supplies with a mark-up of 25%
• Mr. A owns a clothing
business while Mr. B
owns a stall inside the
mall, they decided to
combine their business
whereby they can sell all
the clothes manufactured
by A in Mr. B Stall