Accounting Principles Lesson 1

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Questions and Answers

What is accounting?

A service activity that provides quantitative information primarily financial in nature about economic entities.

Which of the following are pillars of the ASEAN Community? (Select all that apply)

ASEAN Political Security Community (correct)

ASEAN Social Community

ASEAN Socio-Cultural Community (correct)

ASEAN Economic Community (correct)

The type of business organization with a single owner is called a ______.

Sole Proprietorship

What defines Micro enterprises?

Enterprises with assets of P3.0 million or less and employees not more than nine workers. Signup and view all the answers

In a corporation, stockholders are personally liable for the corporation's debts.

False Signup and view all the answers

Which type of organizational activity involves obtaining financial resources?

Financing activities Signup and view all the answers

What are the four pillars of the ASEAN Economic Community?

Single market and production base, competitive economic region, equitable economic development, integration into the global economy. Signup and view all the answers

What type of service does accounting primarily provide?

Quantitative information Signup and view all the answers

What is often referred to as the 'language of the business'?

Accounting Signup and view all the answers

A manufacturer only uses raw materials to create finished products.

False Signup and view all the answers

Which of the following is an example of a trading business?

Retailing Signup and view all the answers

What are raw materials?

Grown or extracted natural resources Signup and view all the answers

Which pillar is NOT part of the ASEAN Economic Community?

Health Community Signup and view all the answers

What is a sole proprietorship?

A business organization with a single owner Signup and view all the answers

In a partnership, all profits are shared equally among partners.

False Signup and view all the answers

Study Notes

Accounting

Defined as a service activity that provides quantitative financial information about economic entities, aiding in economic decision-making.
Functions as an information system measuring, processing, and communicating financial data for informed judgment.
Involves recording, classifying, summarizing transactions and events of financial nature, and interpreting outcomes.

Evolution of Accounting

History reflects the changes in accounting thought, practices, and institutions responding to environmental and societal shifts.
Examines the impact of these evolutions on the broader environment.

ASEAN Economic Community

Comprises three pillars:
- **ASEAN Political Security Community
- ASEAN Economic Community
- ASEAN Socio-Cultural Community**

Four Pillars of ASEAN Economic Community

Single Market and Production Base: Ensures free flow of goods, services, investment, capital, skilled labor, and priority integration sectors.
Competitive Economic Region: Focuses on competition policy, consumer protection, intellectual property rights, infrastructure, taxation, and e-commerce.
Equitable Economic Development: Promotes SME development and initiatives for ASEAN integration.
Integration into the Global Economy: Advocates for coherent external economic relations and enhanced participation in global supply networks.

Priority Integration Sectors

Goods: Encompasses agro-based products, automotive, electronics, fisheries, rubber products, textiles, and wood-based items.
Services: Includes air transportation (e-ASEAN), healthcare, logistics, and tourism.

Types of Business

Service-oriented businesses that hire skilled labor, e.g., software development, accounting, legal services.
Sellers of raw materials and manufactured goods, e.g., wholesalers and retailers.
Manufacturers converting raw materials into finished products, e.g., vehicle assembly and food production.
Resource acquisition businesses, e.g., farming, mining, and oil extraction.
Businesses operating real estate and related services, e.g., hotels and transport services.
Financial institutions accepting deposits and paying interest, e.g., banks and investment houses.
Insurance companies collecting premiums and investing for coverage against losses.

Forms of Business Organizations

Sole Proprietorship: Owned by a single individual responsible for all profits, losses, and liabilities.
Partnership: Owned by two or more individuals who share financial contributions and liabilities incurred by the business.
Corporation: A separate legal entity owned by stockholders who are not personally liable for corporate debts.

Micro, Small, and Medium Enterprises (MSMEs)

MSMEs support larger industries, contributing significantly to the country's industrial development.
Micro Enterprises: Assets less than P3 million and fewer than 10 employees.
Small Enterprises: Assets between P3 million and P15 million with 10 to 99 employees.
Medium Enterprises: Assets between P15 million and P100 million with 100 to 199 employees.

Activities in Business Organizations

Financing Activities: Require financial resources to procure other resources for production and services.
Organizations compete for financial resources in capital markets.

Types of Business

Services involve selling expertise and time, such as software development and legal services.
Accounting is the process of providing financial information about economic entities to assist in decision-making.
Described as the "Language of Business," accounting records, classifies, and communicates financial information.
Involves measuring and interpreting economic data for informed judgments.

Roles in Business

Trader: Engages in buying and selling products, including raw materials and manufactured goods; examples include wholesalers and retailers.
Manufacturer: Designs and assembles products from raw materials, converting them into finished goods; includes various sectors like construction and pharmaceuticals.
Raw Materials Producer: Grows or extracts basic materials needed for production, such as in farming and mining.
Infrastructure Provider: Sells services related to utilizing infrastructure, such as transportation and property management.
Financial Services: Involves receiving deposits and providing loans, such as banks and investment houses.
Insurance: Pools premiums to cover potential losses, with financial management of collected funds.

Evolution and Community Context

Evolution of Accounting: The history reflects the changes in practices due to societal needs, focusing on the accountability of economic growth.
ASEAN Economic Community: Comprised of pillars focused on political security, economic cooperation, and socio-cultural integration.
Four Pillars of ASEAN Economic Community:
- Promotes free flow of goods and services across member states.
- Aims to create competitive economic regions through policy harmonization.
- Prioritizes equitable economic development supporting SMEs.
- Ensures integration into the global economy by enhancing external relations.

Priority Integration Sectors

Focuses on specific goods industries like agro-based products, automotive, electronics, fisheries, and rubber to stimulate regional trade.

Forms of Business Organizations

Sole Proprietorship: Owned and managed by a single individual who retains all profits and liabilities.
Partnership: A collaborative business model with shared ownership and responsibilities among two or more individuals.

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Description

This quiz covers the foundational concepts of accounting, emphasizing its role as a service activity that provides quantitative financial information about economic entities. Participants will explore the processes of identifying, measuring, and communicating economic data essential for informed decision-making.