Fabm

• Clay Tokens


  8,500 BC
• Clay tokens represented such commodities as sheep, jugs of oil, bread or clothing and were used in the Middle East to keep records
• The tokens were often sealed in clay balls called bullae, which where broken on delivery so the shipment could be checked against the invoice. Those were the first bills of lading
• Ancient civilizations of China, Babylonia, Greece, and Egypt
• 1st dynasty of Babylonia, its law which was based on the Code of Hammurabi


  1. Requires merchants trading goods to give buyers a sealed memorandum containing the agreed price before it can be considered enforceable

  2. The agreed-upon transaction was recorded by the Scribe on a small mound of clay with parties affixing their signatures on it
• 3600 B.C in Babylonia, clay tablets also recorded payment of wages
• The Florentine Approach


  • The earliest evidence of business bookkeeping in Florence
  • Within the framework of the "narrative" or "paragraph" type of accounting record
  • Accounts were not related in any special way and balancing of the accounts was lacking
• AMATINO MANUCCI


  Inventory of double-entry bookkeeping. He managed to construct a comprehensive and fully articulated set of double-entry records, with a regular balancing procedure on closure of the General Ledger
• LUCA PACIOLI


  • A Franciscan friar and a celebrated mathematician, is generally associated with the introduction of double-entry bookkeeping
  • Father of double-entry accounting
• One of the most important events in accounting history is the formalization and publication of the double-entry system as part of his treatise Summa de Arithmetica, Geometria, Proportion et Proportionalita (translated as "Everything about Arithmetic, Geometry, and Proportion)
• Ordonnance de Commerce of 1673


  Systematized form of accounting regulation developed in continental Europe, starting in France
• Nicolas Petri (17th century)

  First person to group similar transactions in a separate record and enter the monthly totals in the journal, rather than recording all transactions in a series
• Benjamin Workman (1769)


  The American Accountant, textbook
• Eugen Schmalenbach (1920s)


  The Modern Chart of Accounts
• Dan Brinklin and Bob Frankston

  They wrote VisiCalc for the Apple I, the first electronic spreadsheet
• Republic Act 9298 (Philippine Accountancy Act of 2004) Signed into law by President Gloria Macapagal-Arroyo on May 13, 2004. This law regulates the practice of accountancy in the Philippines. It repealed Presidential Decree 692, the Revised Accountancy Law, which was enacted May 5, 1975
• Business


  Refers to individuals and groups' organized efforts and activities to produce and sell goods and services for profit. It is composed of repetitive exchanges
• Business Transactions


  The objective of any business enterprise is to provide benefits to its stakeholders
• Clusters of basic exchanging activities of the company

  • Financing
  • Investing
  • Personnel or Human Resources
  • Purchasing
  • Conversion
  • Revenue
• Management


  • The organization and coordination of the activities of a business that is entrusted and responsible for decision making to achieve defined objectives of the business
  • Should keep every aspect of business moving, in line, in focus, without neglecting any aspect, or else a drop in one aspect may result in drop in others
  • Stewardship like good parenting, ensure survival and growth. It's the ability to take care of resources and things of value
• Financial Objectives and Growth

  • Liquidity - Ability of the business to meet short term obligation (current and non current assets) CASH
  • Profitability - excess of income generated over costs of running business (income less expense)
  • Solvency(Stability) - strength of the business to grow on the long term
  • Competitive - takes advantages and addresses threats from its environment. Making their business an attractive option in the industry
• Accounting Language of Business

  Accounting as a discipline provides the terminology, structure, and formats through which business information is communicated to interested parties
• Information


  • Meaningful, processed, and useful data
  • Information of the past can be useful for actions and decisions moving in the present for future outcomes
• Accounting Information

  About the transactions and events of business organization
• Accounting is an information system


  Arrangement of resources, documents, records, and processes maintained by the business to prepare and report its financial data in meaningful forms
• Financial Information

  Facts about monetary matters of an economic entity. Are the main Considerations that influence the form contents and structure of financial reports– The output of the account thing information system
• Financial Reports


  Tangible representation of financial information
• Financial Statements


  A specialized financial report of an entity's financial position, financial performance, and cash flows
• Accounting is a process

  1. Identifying

  2. Analyzing

  3. Recording

  4. Classifying

  5. Summarizing

  6. Communicating
• Identifying

  Involves selecting economic events that are relevant and need to be recorded based on source documents and other evidence
• Analyzing


  To breaking down of transactions and events in terms of their effects on the accounting equation, the basic accounting formula
• Recording


  Involves keeping a chronological diary/journal of events in pesos
• Classifying


  Is sorting the original record of transactions and events into group of similar nature and characteristics, done in ledger
• Summarizing


  Presenting the result of the account process into a condensed form (financial reports)
• Communicating


  Occurs through the presentation, disclosures, and distribution of financial and accounting reports
• Accounting

  • Art - requires skills and expertise since it involves discipline, methodical approach to applying principles and concepts
  • Science - adhere to certain professional and ethical standards
• Financial Accounting


  • Is the broadest branch and is focused on the needs of external users of financial information
  • The general-purpose financial statements cater to the need of the primary users to support their decisions on whether to invest, add, maintain
• Management Accounting


  Deals with the preparation and analysis of accounting information for internal use
• Tax Accounting


  Is the process of preparing, analysis and presentation of tax returns and payments. Tax accounting assists organizations to comply with tax laws and regulations, minimize taxes legally, assess the consequences of tax decisions, and others
• Auditing


  Means to review, analyze and examine actual results against an established and accepted set of criteria, standards, or conventions to arrive at a conclusion