Podcast
Questions and Answers
What is the primary function of accounting?
What is the primary function of accounting?
Who is recognized as the Father of Accounting?
Who is recognized as the Father of Accounting?
What is a characteristic of a sole proprietorship?
What is a characteristic of a sole proprietorship?
Which activity involves managing long-term resources in a business?
Which activity involves managing long-term resources in a business?
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What does the Philippine Accountancy Act of 2004 primarily address?
What does the Philippine Accountancy Act of 2004 primarily address?
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Which fundamental principle of accounting emphasizes honesty?
Which fundamental principle of accounting emphasizes honesty?
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What does management accounting primarily focus on?
What does management accounting primarily focus on?
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Which of the following is NOT a type of business organization?
Which of the following is NOT a type of business organization?
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What does auditing primarily involve?
What does auditing primarily involve?
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What is the role of a person practicing in commerce and industry?
What is the role of a person practicing in commerce and industry?
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Study Notes
Accounting
- Accounting provides financial information to aid in economic decision-making.
- Considered the language of business.
Father of Accounting
- Fra Luca Bartolomeo de Pacioli, an Italian mathematician.
Types of Business
- Services: Businesses that primarily sell people's time.
- Trader: Businesses involved in buying and selling products.
- Manufacture: Businesses that convert raw materials into finished goods.
- Raw materials: Businesses that grow or extract raw materials.
- Infrastructure: Businesses that deal with large assets.
- Financial: Businesses that handle deposits, loans, and investments.
- Insurance: Businesses that provide insurance services.
Forms of Business Organizations
- Sole Proprietorship: Owned and operated by a single individual.
- Partnership: Owned and operated by two or more individuals who contribute resources and share profits.
- Corporation: Owned by its stockholders.
Activities in Business Organizations
- Operating Activities: Involve the production, distribution, and marketing of goods and services.
- Investing Activities: Focus on acquiring and managing long-term resources for business operations.
- Financing Activities: Involve obtaining the financial resources needed for business operations.
Accountancy Act of 2004
- Republic Act No. 9298, known as the Philippine Accountancy Act of 2004, signed into law in 2004.
Scope of Practice
- Practice of Public Accountancy: Professionals offering accounting services to the public.
- Practice in Commerce and Industry: Accountants working within businesses using their professional knowledge.
- Practice in Government: Accountants holding accounting positions in government agencies.
- Practice in Education/Academe: Accountants involved in teaching accounting, auditing, business law, and taxation.
Fundamental Principles
- Integrity: Requires honesty and straightforwardness.
- Objectivity: Requires impartiality, avoiding conflicts of interest and undue influence.
- Professional Competence and Due Care: Requires acting diligently and adhering to professional standards.
- Confidentiality: Requires maintaining the confidentiality of client information.
- Professional Behavior: Requires complying with laws and regulations and avoiding actions that discredit the profession.
Branches of Accounting
- Auditing: Services provided by the accountancy profession to ensure financial statements are accurate.
- Bookkeeping: The recording of basic financial data.
- Cost bookkeeping, Costing, and Cost Accounting: Capturing the total cost of production.
- Financial Accounting: Recording business transactions and preparing reports on financial position and performance.
- Management Accounting: Using cost accounting data for specific management decisions.
- Financial Management: Applying management concepts to financial resources.
- Taxation: Preparing tax returns.
- Government Accounting: Accounting for resources in government entities.
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Description
This quiz covers fundamental concepts in accounting, including its significance in economic decision-making and the contributions of Fra Luca Bartolomeo de Pacioli. Additionally, explore different types of business organizations and their activities, focusing on service, trading, and manufacturing sectors.
