Podcast
Questions and Answers
Who is considered the father of accounting?
Who is considered the father of accounting?
- Cotrugli
- Fr.Luca Pacioli (correct)
- A financial analyst
- An Italian businessman
What is the primary function of accounting?
What is the primary function of accounting?
- To analyze financial statements
- To prepare financial reports (correct)
- To record business transactions
- To make investment decisions
What is the term for an activity or event taking place in a business, expressed in terms of money?
What is the term for an activity or event taking place in a business, expressed in terms of money?
- Business event
- Economic activity
- Transaction (correct)
- Financial statement
What is the purpose of financial statements?
What is the purpose of financial statements?
What is the book where the double entry bookkeeping system could be traced?
What is the book where the double entry bookkeeping system could be traced?
What is the definition of accounting?
What is the definition of accounting?
What is the nature of a business?
What is the nature of a business?
What is the role of accounting in business?
What is the role of accounting in business?
What is the primary purpose of posting in accounting?
What is the primary purpose of posting in accounting?
What is the ledger in accounting?
What is the ledger in accounting?
How do you open a ledger account?
How do you open a ledger account?
What is the correct order of filling up the columns in a ledger account?
What is the correct order of filling up the columns in a ledger account?
Why do you need to indicate the journal page in the PR or JR column?
Why do you need to indicate the journal page in the PR or JR column?
What is the correct manner of posting journal entries?
What is the correct manner of posting journal entries?
What is the purpose of the Explanation column in a ledger account?
What is the purpose of the Explanation column in a ledger account?
Why do you need to open the ledger accounts before posting journal entries?
Why do you need to open the ledger accounts before posting journal entries?
What is the primary purpose of identifying the events to be recorded in the first step of the accounting cycle?
What is the primary purpose of identifying the events to be recorded in the first step of the accounting cycle?
What is the purpose of posting the journal entries to the accounts in the ledger?
What is the purpose of posting the journal entries to the accounts in the ledger?
What is the purpose of preparing the trial balance?
What is the purpose of preparing the trial balance?
What is the end result of the accounting cycle?
What is the end result of the accounting cycle?
What is the purpose of the analysis of transactions in the first step of the accounting cycle?
What is the purpose of the analysis of transactions in the first step of the accounting cycle?
What is the purpose of preparing the worksheet?
What is the purpose of preparing the worksheet?
What is the sequence of steps in the accounting cycle?
What is the sequence of steps in the accounting cycle?
What is the purpose of the accounting cycle?
What is the purpose of the accounting cycle?
Study Notes
Introduction to Accounting
- Fr. Luca Pacioli is considered the father of accounting and was an Italian mathematician.
- He prepared the book "Summa de Aritmetica" in 1494, which introduced the double entry bookkeeping system.
- Cotrugli wrote the first accounting book in Naples.
Definition and Nature of Accounting
- Accounting is a service activity that prepares financial reports to provide relevant financial information for informed economic decisions.
- Accounting can also be defined as the art of recording, classifying, and summarizing financial transactions and events.
- Accounting bridges the gap between the business and interested parties.
- Accounting is the language of business.
Transactions and Financial Statements
- A transaction is an activity or event expressed in terms of money.
- Financial statements communicate vital financial information about the business to stakeholders.
Business Nature and Organizations
- A business is an economic unit engaged in buying and selling goods or services.
The Accounting Cycle
- The accounting cycle refers to a series of sequential steps to accomplish the accounting process.
- The steps in the accounting cycle are:
- Identify events to be recorded
- Record transactions in the journal
- Post journal entries to the ledger
- Prepare the trial balance
- Prepare the worksheet and financial statements
Posting Process
- Posting is the process of transferring journal entries to the ledger.
- The ledger is the book of final entry where transactions are last recorded.
- To open a ledger account, write the account title, account number, and column headings (Date, Explanation, PR/JR, Debit, Credit, and Balance).
- Journal entries are posted chronologically.
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Description
Test your knowledge of the introduction to accounting, including the history and definition of accounting, and the role of Fr. Luca Pacioli as the father of accounting.