AP

• ACCOUNT - information, records, transachon, description, data, storage of money
• ACCOUNTING - recording of transactions, identifies, measure, recording, communicating.
• Accounting - Is an information system that measures, processes and commu- nicates financial information about an economic entity..
• Accounting -  is a service activity. Its Function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making ewnomic decisions  
• Accountants -  storekeepers of the business.

  • they store data/ they will know if its profitable or lost.
• Accounting - Is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof.
• Middle East - clay balls called BULLAE
• China - Code of Hammurabi
• Evolution of accounting - started in barter
• Luca Pacioli -  He provides accurate information about the transaction in a business (He wants to record the things that enter and exit in a business.)
• Information Age VISICALC - First electronic spread sheet / Dan Brinklin & Bob  Frankston
• Entity - separate identity/con separate identity. 
• Economic entity - refers to a business or organization whose major purpose is to produce a profit for its oumer. 
• social entities - nonprofit organizations such as cities, publics school, & public hospital
• Sole proprietorship - 1
• Partnership - 2 or more
• corporation -shareholders/stakeholder -entity created by law ang owner.
• MSME Micro, Small & Medium Enterprises) - number of workers & asset in finances
• Activities in Business Organization.

  • Financing Activities.

  
  

  • Investing Activities.

  
  

  •  Operating Activities 
• Phases of Acounting 1. Measuring / Measures - using monetary unit (php) 
• Phases of accounting

  2 . Recording -  the transaction
• Phases of accounting

  3. classifying - Accounts - (A,L,E,I,E)
• Phases of accounting

  4. summarization - Financial statements. 
• Phases of accounting

  5. Interpreting - to be interpreted by users of acounting info. 
• Fundamental concepts

   Entity Concept - separate your business & owner
• Fundamental concepts

   Periodicity concept - specific periof of time/ reports are equally subdivided per time period. 
• Fundamental concepts

  stable Monetary unit - always use the same monetary unit (Phy)
• Five elements of financial statements.

  • Assets, Liabilities, Equity, Income, Expense
• Assets - is a resource controlled by the enterprise
• Liability - is a present obligation of the enterprise
• Equity is the residual interest in the assets of the enterprise
• Income - increases in economic benefits during the accounting period
• Expense -  decreases in economic benefits during the accounting period
• Steps of Recording Accounts

  1. Identification of events to be recorded - gathering information from source documents (invoices, checks, receipts, pay roll records, bills, bank statements etc.)

  2. Transactions are recorded in journal - debiting/crediting

  3. Journal entries are posted to the ledger - classifying account

  4. Preparation of trial balance

  5. Preparation of the worksheet including adjusting entries

  6. Preparation of Financial Statements

  7. Adjusting journal entries - are journalized & posted (accruals and deferrals)

  8. Closing journal entries are journalized & posted

  9. Preparation of a post closing trial balance

  10. Reversing journal entries are journalized & posted
• Steps 1-3 - during Accounting period
• Steps 4-9 - at the end of accounting period
• Simple journal entry - 1 debit and 1 credit
• Compound journal entry - more than 1 debit or 1 credit