INTRODUCTION-TO-ACCOUNTING.pdf

INTRODUCTION to Accounting RAMOS, DONABELLE I. Professor, Accounting 2 what is accounting? Accounting is commonly known as the "language of business". It is a means through which information about a business entity is communicated. "the art of recording, classifying, and summarizing in a...

INTRODUCTION to Accounting RAMOS, DONABELLE I. Professor, Accounting 2 what is accounting? Accounting is commonly known as the "language of business". It is a means through which information about a business entity is communicated. "the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least of financial character, and interpreting the results thereof." what is accounting? Accounting is considered as an art Accounting involves interconnected phases Concerned with transactions and events having financial character Business transactions are expressed in terms of money Interpreting the results  purpose of accounting Economic Entity is a separately identifiable organization which makes use of resources to achieve its goals and objectives. According to the American Institute of Certified Public Accountants (AICPA): "Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions, in making reasoned choices among alternative courses of action." By the American Accounting Association (AAA). "Accounting is the process of identifying, measuring and communicating economic information to permit informed judgment and decision by users of the information." ACCOUNTING INFORMATION Results of Operations Financial Position Solvency and Liquidity Cash Flows Other information users of financial statements Owners and Investors Management Lenders Trade Creditors or Suppliers Government Employees Customers General Public Internal and External Users types of accounting Financial Accounting Managerial Accounting or Management Accounting Cost Accounting Auditing Tax Accounting Accounting Information Systems Fiduciary Accounting Forensic Accounting AREAS OF accounting practice Public Accounting Private Accounting Government Accounting Accounting Education