INTRODUCTION TO

ACCOUNTING
 - is a service activity

Definition of - is an information system that measures,

Accounting processes and communicates financial
information about an economic entity.

- is the process of identifying, measuring, and

communicating economic information to
permit informed judgments and decisions by
users of the information. ( AAA)
 - language of business
Definition of
Accounting - an art of recording, classifying and
summarizing in a significant manner and in
terms of money transaction and events which
are in part of at least of financial character, and
interpreting the result thereof. ( AICPA)
Nature of Accounting
 a service activity
 a process
 both an art and discipline
 deals with financial information and transaction
 an information system
Function of Accounting
1. Keeping systematic record of business transactions

2. Protecting properties of the business

3. Communicating result to various parties in or connected

with the business

4. Meeting legal Requirement.

Function of Accounting
1. Keeping systematic record of business transactions
- is essential for proper accounting and financial
management.
- This process involves recording all financial activities
in an organized and structured manner.
2. Protecting properties of the business
- to ensure its long-term success and sustainability.
Business properties can include physical assets like
, equipment, inventory, and intellectual property.
Function of Accounting
3. Communicating result to various parties in or
connected with the business.
- is a critical aspect of maintaining transparency,
accountability, and fostering positive relationships with
stakeholders.
4. Meeting legal Requirement.
- is a fundamental aspect of operating a business
responsibly and avoiding legal issues.
 The Present - The

History of Accounting Development of Moderm

Accounting Standards and
commerce
19th Century - The
Beginnings of Modern
Accounting in Europe and
America
The Industrial
Revolution ( 1760-
1830)

French Revolution
( 1700s)

14th century - Double

entry bookkkeeping

The cradle of
civilization
BRANCHES OF ACCOUNTING
1. Financial Accounting
2. Management Accounting
3. Government Accounting
4. Auditing
5. Tax Accounting
6. Cost Accounting
7. Accounting Education
8. Accounting Research
Financial Accounting
- focuses on the recording, summarizing, and reporting of
financial transactions and economic events of an
organization. Its primary purpose is to provide information
about a company's financial performance and position to
external parties, such as investors, creditors, regulators,
and the general public.
 Primary Users of General Purpose Financial Primary User of Special purpose financial
Statement statements

 Investors  Top management

 Creditors  Managers
 Shareholders/stockholders  Other internal parties
 Government Agencies
 Auditor
 Other interested Outside parties
Management Accounting
- focuses on providing information and analysis to help an
organization's management make informed decisions and
effectively manage its operations.
Role of Management Accountants
• Advise managers about the financial implication of
projects
• Explain the financial consequences of business decisions
• Formulate business strategy
• Monitor spending and financial control
• Conduct internal business audits
• Explain the impact of the competitive landscape
Government Accounting
- also known as public sector accounting, is the field of
accounting that focuses on financial management and
reporting for government entities, including federal, state,
and local governments, as well as various government
agencies, authorities, and nonprofit organizations.
Auditing
- is a systematic and independent examination of financial
information, records, transactions, operations, or systems to
determine their accuracy, fairness, and compliance with
relevant laws, regulations, and standards.
Tax Accounting
- is a specialized area of accounting that deals with the
preparation, analysis, and planning of an individual or
organization's tax returns and related matters.
o The primary goal of tax accounting is to ensure
compliance with tax laws and regulations while minimizing
tax liabilities within the legal framework.
Cost Accounting
- that focuses on the measurement, analysis, and
management of costs associated with an organization's
products, services, or activities. Its primary purpose is to
provide detailed information about the costs incurred in
various aspects of a business, enabling management to
make informed decisions, control costs, and improve overall
efficiency.
Accounting education
- refers to the process of acquiring knowledge and skills
related to the field of accounting.
- it is typically pursued by individuals who want to become
accountants, auditors, financial analysts, tax
professionals, or work in various accounting-related roles.
Accounting research
- refers to the systematic investigation and study of
accounting-related issues, questions, and topics to advance
knowledge, improve practices, and contribute to the field of
accounting.