FABM 1

• Advantages of cooperatives

  • Prices are lower
  • Saving on management cost
  • Cooperatives - an association of small producers and business who came together in cooperative
• Advantages of stocks

  • Stakeholders
  • Continuous
  • More infusion
  • Management is vested upon its directors
• Advantages of partnerships

  • More funds contributed
  • Admission of more people who agree to contribute skills
  • Infusion of more knowledge
• Infusion of knowledge is limited
• External users of financial information

  • Financial institutions creditors
  • Government
  • Potential investors, creditors
• Accounting research involves conducting diligent study aimed at discovery and interpreting facts, revising accepted theories for the generation of knowledge
• Disadvantages of stocks

  • High taxes
  • Distribution of income depends upon declaration of dividends
  • Limited liability and minimal friendly atmosphere
  • Board of consumers voluntarily to form
• Accounting education involves planned grading and formal teaching in an educational institution
• Corporation is a form of business managed by an elected board of directors
• Tax accounting services provided by accountants include the preparation
• Users of financial information

  • Internal users - primary users of financial information who are inside the reporting entity and directly involved in managing the company's daily operations
  • External users - secondary users of financial information who are parties outside the company
• Disadvantages of partnerships

  • Mutual agency (liable for actions)
  • Disagreement
  • Death, retirement, withdrawal, incapacity results in dissolution
• Types of business organization

  • Sole/Single Proprietorship - business owned and managed by a single person
  • Decision making is solely on the hands of the owner
  • Duration solely depends on the owner
• Disadvantages of cooperatives

  • Limited capital
  • Strictly for members only, shares cannot be transferred
  • Lack of efficient management
• Personal existence
• Sarbanes-Oxley Act was passed in 2022 to protect investors from corporate mismanagement
• Tax accounting


  Preparation of monthly value-added tax, percentage tax, expanded withholding tax applicable to business, avoiding tax problems, filing tax returns, advising on ways to minimize tax
• Financial accounting deals with the theoretical framework covering accounting principles and concepts related to valuation, retained earnings, revenue, and expense accounts
• Enron Scandal was the greatest corporate fraud case recorded, leading to the closure of Arthor Andersen, a top audit firm in the US
• Industrial Revolution transformed accounting into an actual profession, requiring the expertise of accountants to gain corporate control of flourishing businesses
• Government accounting


  Encompasses analyzing, classifying, summarizing, and communicating all transactions involving the receipt and disposition of government funds and property
• Generally accepted accounting principles (GAAP) are followed
• Auditing


  Examination and review of accounting reports to ascertain fairness, propriety, and reliability, providing reasonable assurance that financial statements present the financial position and results of operation accurately
• The Philippines adopted International Accounting Standards (IAS)
• Accounting in modern times


  Developing procedures and accommodating various business needs and demands with the help of the internet and various software applications
• Company management


  Directly involved in managing the company's daily operations, making strategic and operational decisions
• Cost accounting


  Collection, determination, allocation, assessment, and interpretation of data to minimize the cost of production in a manufacturing concern
• Management accounting involves partnering in management decision-making
• Dodd-Frank Act was signed on July 21, 2010, containing 16 major areas of reform
• Industrial Revolution transformed accounting into an actual profession
• Accountant (CA) was chartered by Queen Victoria
• Charted granted to the first national US accounting society

  July 6, 1854
• Luca Pacioli, known as the Father of Accounting, wrote the book "Summa de Arithmetica Geometria Proportion et Proportionalita" which explained extensively used accounting concepts like balance sheets, journals, ledgers, and more
• Mesopotamians used clay tokens along rods or in grooves to express numerical quantities
• Transaction can be consummated online in the Information Age
• Accounting is a service activity aimed at serving the needs of its end users
• The birth of the first national US accounting society, the AICPA

  Year 1887
• The American Institute of Certified Public Accountants (AICPA) and the Philippine Institute of Certified Public Accountants (PICPA) are organizations providing accounting services
• The Securities and Exchange Commission (SEC) was formed in response to the expansion of the Securities and Exchanges
• Accounting is a methodical system involving measuring, reporting, and classifying financial data to provide comprehensive information about the financial position of an entity