accounting overview
DESCRIPTION
Accounting Overview. John V. Balanquit j ohnthecpa.wikispaces.com. Objectives. Student will be able to discuss: The history of accounting Accounting systems The forms of business organization The nature of business operations. Objectives. Student will be able to : Define accounting - PowerPoint PPT PresentationTRANSCRIPT
Accounting Overview
John V. Balanquit
johnthecpa.wikispaces.com
Objectives
Student will be able to discuss:• The history of accounting• Accounting systems• The forms of business organization• The nature of business operations
Objectives
Student will be able to :• Define accounting• Summarize the accounting process• Explain the needs of each user of financial
information• Define and identify FS elements
History of Accounting
Primitive Accounting• Bullae• Code of Hammurabi– Scribe
History of Accounting
Middle Ages• Fra Luca Pacioli– Father of Accounting
History of Accounting
Information Age (Modern)• Globalization– The world is becoming a small community due
to the advancement of technology
Accounting Systems
Manual Accounting System• A system that uses pen and paper only or
any substitute to pen and paper
Accounting Systems
Mechanical Accounting System• A system that uses simple computing
machines in addition to pen and paper
Accounting Systems
Electro-mechanical Accounting System• A system that uses advanced computing
machines in addition to pen and paper
Accounting Systems
Electronic Data Processing (EDP) System• A system that uses networks of computers
and the internet in processing information• Still uses pen and paper
Forms of Business Organization
• Sole proprietorship• Partnership• Corporation– Cooperative
Nature of Business Operation
• Service• Merchandising• Manufacturing• Agri-business• Hybrid
Let’s have a one minute break so that we can absorb the concepts of the previous topic.
Definition of Accounting
It is a service function which involves the processes of identifying, recording, summarizing and interpreting financial information relevant in decision-making.
Definition of Accounting
• It is a science because it follows a process and it involves critical thinking
• It is an art because it involves judgment and creative thinking
• It is the language of the business
Accounting Process
1. Identifying
Accounting Process
2. RecordingJournalizingClassifying (Posting)
Accounting Process
3. SummarizingTrial BalanceWorksheetFinancial Statement
Accounting Process
4. InterpretingRatio AnalysisTrend AnalysisBenchmarkingHorizontal and Vertical Analysis
Users of Financial Information
• Owners/ Investors• Suppliers/ Trade Creditors• Lenders/ Other Creditors• Employees
Users of Financial Information
• Customers• Government• Public
Elements of Financial Statements
• Assets• Liabilities• Equity
Elements of Financial Statements
• Income– Revenue– Gain
• Expense– Expense– Loss
End of Lecture
Thank You!
Quick Check
1. What purpose does the bullae serve during the primitive times?
Quick Check
2. What specific rule does the code of Hammurabi say regarding business transactions?
Quick Check
3. What is the contribution of Fra Luca Pacioli to accounting?
Quick Check
4. Provide the types of businesses according to ownership.
Quick Check
5. Provide the types of businesses according to nature of operations.
Quick Check
6. Provide the various accounting systems
Quick Check
7. Provide the processes of accounting.
Quick Check
8. Define the needs of the different users of financial information.
Quick Check
9. Enumerate the elements of financial statements.
Assignment1 Whole Yellow Paper 15 Points• Provide the technical definition of the
financial statement elements based on the Conceptual Framework for Financial Reporting.
• Indicate your reference
Seat WorkAnswer the following questions by groups of 3.
1. Provide two instances where an EDP system is not appropriate in a business.
2. Why is it important for businesses to maintain pen and paper (Printed) reports?