II. Branches - FABM 1

• Branches of accounting:

  1. Financial accounting
  2. Management accounting
  3. Government accounting
  4. Auditing
  5. Tax accounting
  6. Cost accounting
  7. Accounting education
  8. Accounting research
• Financial Accounting - a branch of accounting primarily handling the recording of financial transactions of a business.
• Financial statements - provide information useful to a wide range of users in their economic decisions.
• PFRS - Philippine Financial Reporting Standard
• PAS - Philippine accounting standards
• PFRS and PAS - supply guidelines on how companies should prepare their financial statements.
• Standardized financial statements - allows the users to compare the results of operations of different companies regardless of size and nature.
• Standardized financial statements - also useful for creditors .
• Standardized financial reports - improves the understandability of the company's financial statements.
• Creditors: ables to assess the riskiness
• Financial accounting - to provide the information needs of external users that have mo capability to request information directly for management.
• Financial statements - called general purpose financial statements.
• General Purpose financial statements - external parties used it. It evaluates the performance of the company.
• Specific purpose statements - utilized by internal parties to guide them in the decision-making process for the company.
• Management accounting - focuses on the preparation of financial reports used by managers in their day-to-day decision-making.
• CIMA - Chartered Institute of Management Accountants
• Management accounting - used in deciding how the business should act going forward.
• Management accounting - provides value to the business since it assists the company in selecting only those activities that deliver benefits more than the related.
• Analysis - management accountants should be able to analyze information and use it to make business decision.
• Risk - Management accountants should be able to identify risks that can potentially have detrimental effects to the company. At the same time, management accountants should give recommendations on how to management.
• Planning - management accountants should be able to apply accounting techniques in the planning amd budget creation phase of a business.
• Communication - Management accountants should be able to identify what information the management needs and also explain the numbers to non- financial managers.
• -government accounting - defined as an accounting system which "encompasses the process of analyzing, recording, classifying, summarizing, and communicating involving the receipts and disposition of government fund and property and interpreting the result.
• Government accounting - used by all government agencies
• NGAS - New Government Accounting systems
• NGAS - enhances responsibility accounting in all agencies. Simply stated, responsibility accounting relates financial results to a particular responsibility center.
• NGAS - placing accountability in each agency discourages misappropriation and misuse of public funds.
• GAA - General Appropriations Act
• GAA - serves as the enacted budget of the country of the upcoming year.
• COA - Commission on Audit
• DBM - Department of Budget and Management
• BTr - Bureau of Treasury
• COA - responsible for the keeping of the government's general accounts. Tasked to keep and update the accounting books of the whole organization.
• DBM - responsible for the formulation and implementation of the National Budget with the goal.
• BTr - responsible for the safekeeping of the national funds. It serves like a bank where the funds are kept.
• Financial statements - wants information about the company that is truthful, reliable, and relevant.
• Auditing - unbiased examination and evaluation of the financial statements of an organization.
• Auditing - the process that includes numerous steps to determine whether or not a company's financial statements are presented truthfully.
• Auditors - Accountants that perform the auditing procedure.
• Auditors - should also be independent from the company being audited. If they are independent, they had no connection with the company.