Advance Reading

• Accounting - language of business
• Business - Regularity = Profit-oriented
• Accounting is developed in 14th-17th century
• Accounting is developed in Renaissance Period
• Accounting is developed at Italy, Europe
• Fra Luca Pacioli is the Father of Accounting
• In = Out
• Out = In
• Debere = Debit
• Credere = Credit
• Accounting Equation: Assets = Liabilities + Equity
• Accounting


  The language of business
• Business

  • Regularity = Profit-Oriented
• Accounting is developed

  14th-17th Century (Renaissance Period)
• Fra Luca Pacioli


  Father of Accounting
• Debere


  Credere
• Debit


  Credit
• Accounting Equation

  Assets = Liabilities + Equity
• Generally Accepted Accounting Principle (GAAP)


  • Entity Concept
  • Going Concern
  • Periodicity Concept
  • Matching
  • Accrual
• Entity Concept


  Owner and business is different entity and cannot be combined
• Going Concern


  How a businessman thinks as if the business will live forever
• Periodicity Concept


  Divide the period of the business to analyze if the business is successful or not
• Matching


  No pain, no gain
• Income


  It is earned when the service is rendered, regardless of when cash is affected. Income is focused on the service, not cash.
• Expense


  It is incurred when the service is received, regardless of when cash is paid. Expense is focused on the service, not cash.
• Monetary Unit


  Peso is stable
• Relevance


  A material to one person may not be a material to another
• Materiality


  It is the ability of the financial information or transaction to affect your decision
• Faithful Representation


  It represents the concept that financial statements be produced that accurately reflect the condition of a business
• Conservatism


  It represents the company accounts to be prepared with caution and high degrees of verification
• Substance over Form


  It refers to transactions recorded in financial statements that reflect their economic substance rather than merely their legal form
• Understandability


  All of the records are understandable
• Comparability


  Comparing one thing to another
• Verifiability


  It can be verified
• Timeliness


  It should come on time
• Accounting


  Language of business
• Business


  • Regularity = Profit-Oriented
• Accounting is developed


  14th-17th Century (Renaissance Period)
• Fra Luca Pacioli


  Father of Accounting
• In


  Out