FABM LESSON 1

• Accounting is an art of recording, classifying, summarizing, and interpreting in terms of money transaction or events.
• Recording - gathering all information and put them into writing
• Classifying - sorting of accounts
• Summarizing - summarize financial statements
• Interpretation - analyze the data to determine its meaning.
• Interpreting is based on financial statement
• Financial Statement - report that presents the results of business activities during a specific period of time
• Capital statement - it is a statement to know if the capital is gaining or losing
• Internal users

  • Management
  • Employees
  • Owners
• External users

  • Creditors
  • Tax Authorities
  • Investors
  • Customers
  • General public
• Specialized fields in accounting

  • management/managerial accounting
  • general/financial Accounting
  • auditing
  • cost accounting
  • budgetary accounting
  • tax accounting
  • social accounting
  • not-for-profit accounting
  • international accounting
  • accounting institution
• management/managerial accounting - know the historical and development background of the company. and to know the problems and plan for the future
• general/financial accounting - it deals with the preparation with financial report or financial data
• management/managerial accounting - it deals with knowing the companys problem and plan for future
• auditing - it reviews the work of the manager and financial accounting. it gives interpretation on the reviews
• cost accounting - it is based on the type of your organization. it controls the cost of manufacturing processes and the cost of manufactured product
• budgetary accounting - it helps to control the expenses of an organization
• budgetary accounting - it is different from previous year to the current year. There is a comparison
• tax accounting - tax is from individuals, professional, and business tax payers. it depeds on the appraise value of the properties.
• social accounting - benefits given are not to be measurable. They do not measure the service they give
• not-for-profit accounting - the accounting system is designed to meet the needs of the organization. ex. churches, charitable institutions
• international accounting - deals with international trade. ex. jollibee, mcdo
• Accounting institution - teaching accounting to accounting students
• external users - are the individuals or organizations outside the company who are not involved in operating the business
• internal users - individuals inside the organization who plan, organize, and run the business