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  • Fundamentals of Accounting

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    Chelsee Mae Diaz
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    This document provides an overview of fundamentals of accounting. It defines accounting as the process of identifying, measuring and communicating financial information. The accounting process involves recording transactions, classifying accounts, summarizing, analyzing and interpreting financial data, and communicating information to internal and external decision-makers. Key concepts discussed include the accounting equation, where assets equal liabilities plus owner's equity, and accounting principles like cost, revenue recognition and conservatism. The document also outlines the functions of accounting and common users of financial statements.

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    This document provides an overview of fundamentals of accounting. It defines accounting as the process of identifying, measuring and communicating financial information. The accounting process involves recording transactions, classifying accounts, summarizing, analyzing and interpreting financial data, and communicating information to internal and external decision-makers. Key concepts discussed include the accounting equation, where assets equal liabilities plus owner's equity, and accounting principles like cost, revenue recognition and conservatism. The document also outlines the functions of accounting and common users of financial statements.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    21 views15 pages

    Fundamentals of Accounting

    Uploaded by

    Chelsee Mae Diaz
    This document provides an overview of fundamentals of accounting. It defines accounting as the process of identifying, measuring and communicating financial information. The accounting process involves recording transactions, classifying accounts, summarizing, analyzing and interpreting financial data, and communicating information to internal and external decision-makers. Key concepts discussed include the accounting equation, where assets equal liabilities plus owner's equity, and accounting principles like cost, revenue recognition and conservatism. The document also outlines the functions of accounting and common users of financial statements.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 15

    Fundamentals of

    Accounting
    Instructor: Chelsee Mae R. Diaz
    Definition of Accounting

    The art of recording, classifying,


    summarizing in a significant manner and in
    terms of money, transaction and events
    which are in part at least of financial in
    character and interpreting the result
    thereof.
    American Institute of Certified Public
    Accountants (AICPA)
    A services activity. Its function is to
    provide quantitative information,
    primarily financial in nature, about
    economic entities, that is intended to
    be useful in making economic
    decisions.
    Accounting Standard Council (ASC)
    The process of Identifying, measuring,
    and communicating economic
    information to permit informed
    judgment and decisions by users of
    the information.
    American Accounting Association (AAA)
    Accounting
    Process Decision - makers

    External:
    Internal:
    Financial Investor
    Communicated to
    Information Creditors
    Management Customers
    Assets= Liabilities + O. Government
    Equity

    Profit or Loss= Revenue -


    Expenses
    Function of Accounting

    Recording - Done in a Journal Book


    Classifying - Done in the Ledger Book
    Summarizing preparation for Trial Balance
    Analyzing and Interpreting
    Communicating
    Accounting Concepts and Principles

    Entity Concepts
    Objectivity Principles
    Cost Principles
    Materiality Principle
    Matching Principle
    Accounting Period
    Revenue Recognition
    Conservatism
    Users of Financial Statements

    Business Owners
    Business Managers
    Government
    Potential Investors
    Creditors
    Labor Unions
    Budget Officer/ Accountants/ Auditors
    Forms of Business Organization

    Sole/ Single Proprietorship


    Partnership
    Corporation
    Types of Business Organization

    Service Concern
    Trading Concern
    Manufacturing Concern
    Transaction Analysis and Journal Entry
    Preparation
    Assets Account
    Cash
    Cash on Hand
    Cash in Bank
    Cash in Fund
    Petty Cash Fund
    Cash Equivalent
    Accounts Receivables
    Note Receivables
    Transaction Analysis and Journal Entry
    Preparation
    Merchandize Inventory
    Prepayments
    Land
    Building
    Furniture and Fixtures
    Office Equipment
    Delivery Equipment
    Transaction Analysis and Journal Entry
    Preparation
    Liability Accounts Revenue Accounts
    Accounts Payables Service Income
    Notes Payables Interest Income
    Capital Accounts Sales
    X, Capital Sales Discount
    X. Withdrawal Sales Return
    Sales Allowance
    Transaction Analysis and Journal Entry
    Preparation
    Expense Accounts
    Purchase
    Purchase Discount
    Purchase Returns
    Purchase Allowances
    Salaries and Wages
    Employee Benefits
    Office Supplies Expense
    Utilities Expense
    Rent Expense
    Advertising Expense
    Insurance Expense
    Accounting Equation

    Assets = Liabilities + Capital / Owners Equity

    Capital- Residual interest in the assets of thee entity after


    deducting all of its liabilities
    Investments
    Increase Capital
    Revenues
    Withdrawal
    Decrease Capital
    Expenses

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