FABM 1

• Accounting - The art of recording, classifying, summarizing in a significant manner and in terms of money, transactions and events
• • Merchants - used recording
• • Luca Pacioli -father of Accounting, a Franciscan friar in the 15th century.
• Book - Summa de Arithmetica
• • Book - a modern way of recording business transactions.
• • Board of accountancy - the body authorized by law to make rules & regulations involving the CPA profession.
• Recording or Bookkeeping business transactions are recorded systematically & chronologically.
• • Single-entry bookkeepingshows only the debit or credit.
• • Double-entry bookkeeping has debit & credit.
• • Classifying - sorted as assets, liabilities, capital, revenue, & expense accounts.
• • Summarizing are summarized through financial statements.
• • Interpreting to learn if the business gains or not. 
• • Public Accounting - rendered by a CPA. 
• • Auditing by carefully examining and testing the accuracy of the reports. 
• • Management Advisory Services includes the design, installation, and improvement of the firm’s general accounting system. 
• • Tax Services for filing of income tax returns.
• • Private Accounting done in private enterprises.
• • General Accounting recording transactions and preparing financial reports for the users of accounting. 
• • Cost Accounting controlling cost in producing a product or service.
• • Budgeting involves planning for future operations.
• • Internal Auditing check the records prepared in each department or branch.
• • Research and Education lecturers, faculty, students
• • International Accounting for multinational corporations dealing with international trade.
• Business as an Accounting Equity 

  • The business is distinct and separate from its owners.
• FINANCIAL ACCOUNTING -  a systematic method of recording transactions of any business according to the accounting principles.
• • FINANCIAL ACCOUNTING -  It is the original form of the accounting process.
• The main purpose of financial accounting is to calculate the profit or loss of a business during a period. 
• • Management Accounting 
  • Provides information to management for better administration of the business.
• • Management Accounting 
  • It helps in making important decisions and controlling various activities of the business with the help of various Management Information Systems such as Budgets, Projected Cash Flow and Fund Flow Statements, Variance Analysis reports, Cost-Volume-Profit Analysis reports, Break-Even-Point calculation, etc.
• • Cost Accounting 
  • Deals with evaluating the cost of a product or service offered. It calculates the cost by considering all factors that contribute to the production of the output, both manufacturing and administrative factors. 
• • Cost Accounting It helps the management in fixing the prices and controlling the cost of production.
• • Cost Accounting -
  • It also pin points any wastages, leakages and defects during manufacturing and marketing processes.
• • Government Accounting 
  • It is done for Central Government (National Government) and State Government budget allocations and utilization.
• • Government Accounting  -
  • Keeping records ensures proper and efficient utilization of the various budget allocations and safety of public funds.
• • Forensic Accounting 
  • also known as legal accounting
• Forensic Accounting -

  • enables calculating damages or settling disputes in legal matters. Investigations are done and calculations are carried out to evaluate the damages accurately.
• Generally Accepted Accounting Principles 

  • Relevant
  • Reliable
  • Comparable 
• • Accounting Period The length of time that covers the business transaction being reported upon.  It can be monthly, quarterly, semi-annually, or annually.
• • Calendar year a period of twelve months starting January 1 to December 31.
• Fiscal Year - any succession of twelve months starting with any month except January and December.