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• It is defined as an information system that measures, processes, and communicating information primarily financial in nature, about an identifiable entity for the purpose of making economic decisions.

  Accounting
• It is the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by the users of the information.

  American Accounting Association
• It is a service entity. Its function is to provide quantitative information primarily financial in nature about an economic entities that is intended to be useful in making economic decisions.

  Accounting Standard Council
• This involves selecting economic events that are relevant to a particular business transaction.

  Identifying
• This is the phase of accounting which involves sorting or grouping of similar and interrelated transactions and events into their respective kind and classes.

  Classifying
• is the broadest branch and is focused on the needs of external users. primarily concerned with the recognition, measurement and communication of economic activities.

  Financial Accounting
• It determines strict adherence to management policies and measures the efficiency of operations.

  Auditing
• It is assumed under this branch that the users have one common information need. conforms with accounting standards developed by standard setting bodies.

  Financial Accounting
• this is the phase of accounting which involves the routine and mechanical process of writing down the business transactions and events in the books of accounts in a chronological manner.

  Recording
• This is the process of transferring the entries from journal to ledger called

  Posting
• is the art of recording business transactions in a systematic manner.

  Bookkeeping
• writing down the business transactions and events in the books of accounts in a chronological manner called

  Journalizing
• It is an art of recording, classifying, 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.

  American Institution of Certified Public Accountant
• is the process of recording “systematically” the business transactions in a “chronological manner”.

  Bookkeeping
• requires complete and accurate bookkeeping records necessary in the performance of its responsibility which is the analysis and interpretation of the financial reports.

  Accounting
• assigning of monetary values involved in a transaction. We used the peso as the financial denominator.

  Measuring
• “dual effect”, normally the value received and the value parted with of the transaction.

  Analyzing
• this is the phase of accounting which involves completion of the financial statements and the accounting requirements as well. This starts from striking of a trial balance, plotting down of adjusting entries in the worksheet and the preparations of closing entries, post-closing trial balance and reversing entries.

  Summarizing
• this is the phase of accounting which involves the “analytical and    interpretative works”.

  Interpreting
• concerns primarily in describing the financial resources, obligations, and activities of an economic entity resulting to the preparation of general-purpose financial reports on financial position and operating results

  Financial Accounting
• Example of financial reports

  Balance sheet, Income Statement, Statement of cash flows
• is primarily concern with the designs, installation and improvements of accounting system intended specifically to help management in running the business.

  Management Accounting
• this is the simplest form of business organization where capital is owned and provided by one person

  Sole Proprietorship
• this is a new type off accounting information wherein its primary concern is to set-up financial planning objectives including the sources and application of its resources beneficial to the economic entity.

   

  Financial Management
• the business derived its income from services rendered to clients, in the case of professional services

  Service Concern
• comprises the accounting principles and processes, standards and underlying assumption that are used in preparing financial statements.

  Generally Accepted Accounting Principles
• -          Life of the business is divided into equal periods

  -           Financial Statement is prepared at the end of each period

  -          Can be Monthly, Quarterly, Semi-Annually, Annually

   

  Time-Period Concept
• objective is to provide timely and relevant information for those internal users of accounting information, such as the managers and employees in their decision-making needs.

  Management Accounting
• examination of financial statements by an independent CPA with the purpose of expressing an opinion as to fairness of presentation and compliance with selected sample of these records and issues an audit repo

  External Auditing
• involves the preparation of income tax returns and the determination of correct amount of taxes due and payable to the government. 

  Tax Accounting
• uniform set of accounting rules, procedures, practices and standards that are followed in preparing the financial statements.

  Generally Accepted Accounting Principles
• deals with determining the operational efficiency of the company regarding the protection of the company’s assets, accuracy and reliability of the accounting data, and adherence to certain management policies. It focuses on evaluating the adequacy of a company’s internal control structure by testing segregation of duties, policies and procedures, degrees of authorization and other evaluation of the consequences of tax decisions and other tax related matters.

  Internal Auditing
•   Involves financial analysis, budgeting and forecasting, cost analysis, evaluation of business decisions, and similar areas.

  Management Accounting
• Assets should be recorded at original or acquisition cost.

  Cost Principle
• Accounting methods and procedures should be applied on a uniform basis from period to period to achieve comparability.

  Consistency Principle
• An entity is separate and distinct from the owner or management. Only business transactions are recorded in the books of the business

  Accounting Entity Concept
• the business is engaged in buying goods and commodities or any form of finished products and sells these at a profit. It might be at retail or wholesale basis like grocery stores.

   

  Merchandising
• concerns primarily on cost collection, allocation and control of producing goods and services.

  Cost Accounting
• deals primarily on the proper custody of public funds in both national and local government, such as cities, provinces, municipalities and barangays.

  Government Accounting
• The capital of the business is owned or provided by two or more person called

  Partnership