Basic Accounting
Cards (142)
- Is the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of information
- What are the 3 accounting process?
- This accounting process is the recognition or non-recognition of business activities as "accountable events"
- This accounting process is the assigning of peso amounts to the accountable economic transactions and events
- This is the process of preparing financial statements and interpreting results thereof
- What are the 3 types of transactions?
- These are transactions which are not recorded in the financial books. An example is the purchase of house and lot of a business owner using his personal money
- These are business events that are not recorded in financial books. Examples are hiring of employees, death of the owner, entering into a contract, and others.
- These are transactions which are recorded in the financial books. An example is the investment of the owner.
- Enumerate the 5 Branches of Accounting
- recognition or non-recognition of business activities as
- Enumerate the Forms of Business Organization
- primarily concerned with the proper accumulation of costs such as materials, labor, and overhead, the proper costing of inventories, and the study of different costing methods.
- deals with the examination of financial statements by an independent party (called the auditor) to ascertain whether such financial statements are in conformity with accounting standards.
- deals with the study of provisions of the law with regard to Philippine taxation system and proper computation of taxes such as income tax, value-added tax, withholding tax, and other taxes.
- primarily concerned with the recording of business transactions and the eventual preparation of financial statements.
- the preparation of financial reports and management research intended for management use and interpretation of these reports and researches
- Most common and simplest form of a busines organization
- Owner receives any profits, suffer any losses, and is personally liable to all debts
- A business that is owned by two or more individuals, who are called "partners", who entered into a contract to carry in the business and divide among themselves the earnings in therefrom
- Generally unlimited personal liability
- Owned by more than one individual, however, unlike partnership, it is created by operation of law rather than a contract
- Ownership is represented by shares of stocks
- Owners are called "stockholders or shareholders" and have limited liability
- Owned by more than one individual, however, it is formed in accordance with the provisions of the Philippine Corporation Code of 2008
- Owners are called "members"
- What are the types of business according to activities
- One that offers service as its main product rather than physical goods
- May offer professional skills, advice, lending service and similar services
- One that buys and sells goods without changing their physical form
- One that buys raw materials and process them into final products
- Changes the physical form of the goods it has purchased in a production process
- Shows the results of the recording of the business transactions and are expressed in terms of assets, liabilities, equity, income and expenses
- What are the 5 components of Financial Statements
- presents the financial condition of the business through its assets, liabilities, and capital or owner's equity
- presents the financial performance of the business through its income and expenses
- presents the changes in capital due to additional investments, withdrawals, and net income or loss
- presents the cash inflows and outflows of the business through its operating, investing and financing activities
- presents the details of the line items in the Statement of Financial Position and Statement of Profit and Loss