FABM1

• Accounting is a system that helps businesses track events that affect them
• The process involves identifying, recording, and communicating financial information to all interested parties
• Identifying economic events relevant to a business involves a transfer of things with value, monetary, and quantifiable exchange
• Recording serves as a history of financial activities and must be systematic and chronological
• Communicating involves summarizing all recorded economic events into accounting reports, typically financial statements, to make information available and understandable to other parties
• Accounting is a process composed of multiple steps, including identifying, recording, and communicating
• Accounting is an art that entails creativity and skills to help attain objectives, requiring techniques, skills, and expertise
• Accounting deals only with quantifiable financial transactions
• Accounting is a means to achieve a specific objective, not the objective itself
• Accounting is an information system, serving as a storehouse of information that evolved to meet the needs of financial information of different groups
• Functions of accounting include keeping systematic records of business transactions to enable easy understanding
• Accounting helps protect the properties of a business by serving as evidence of existing properties and preventing fraud and misappropriation of company resources
• Accounting communicates results to various parties in or connected with the business, used by external parties like investors and government, as well as internal parties like management to make well-informed decisions
• Accounting meets legal requirements
• Ancient Mesopotamia had a system of writing and counting money
• Roman Emperor Augustus's government kept detailed records of resources stewardship
• Luca Pacioli introduced the double-entry bookkeeping system in 14th Century Italy, with debit and credit in every transaction
• Queen Victoria granted the modern profession of chartered accountants in Glasgow in 19th Century Scotland
• Present times follow PFRS (Philippine Financial Reporting Standards) and PAS (Philippine Accounting Standards)
• Forensic accountants deal with cases of theft and fraud
• Financial Accounting handles financial transactions of a business, using PFRS & PAS guidelines, and provides information for external users through General Purpose FS and internal users through Special Purpose FS
• Management Accounting focuses on preparing financial reports within the organization for internal users, does not follow standards, and is used in day-to-day decision making
• Government Accounting analyzes, records, and communicates all government fund and property transactions to prevent misuse of resources
• Auditing involves the unbiased examination and evaluation of financial statements to determine truthfulness and improve credibility
• Tax Accounting enables taxing authorities to collect taxes, follows the National Internal Revenue Code, and produces tax returns
• Cost Accounting provides information for Management Accounting and Financial Accounting, analyzes manufacturing costs, and helps set selling prices
• Accounting Education creates relevant accounting curriculum
• Accounting Research involves the creation of new knowledge
• Accounting is a system that helps businesses track events that affect them
• The accounting process involves identifying, recording, and communicating financial information to all interested parties
• Identifying economic events relevant to a business is the first step in the accounting process
• Relevant economic events involve a transfer of things with value, monetary transactions, and quantifiable exchanges
• Recording serves as a historical record of financial activities and must be systematic and chronological
• Communicating involves summarizing all recorded economic events into accounting reports, typically financial statements (FS), to make information available and understandable to other parties