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Accounting

A service activity that provides quantitative, primarily financial information about economic entities for making economic decisions.

Components of Accounting

Identifying, measuring, and communicating economic information.

Identifying

The process of recognizing or not recognizing accountable events that affect assets, liabilities, and equity.

External transactions

Transactions between the entity and another party.

Internal transactions

Economic activities conducted within the entity itself.

Measuring

Assigning monetary values to transactions to make them comparable.

Historical Cost

The most common measurement that records an asset at its original purchase price.

Fair Value

The cost of an asset resulting from an orderly transaction among market participants.

Communication in Accounting

The process of preparing and distributing accounting information.

Public Accounting

Services provided by CPAs, including auditing, taxation, and management advisory services.

Private Accounting

Accounting that focuses on an entity's internal financial processes and record-keeping.

Government Accounting

The management of government funds and financial reporting for government entities.

Continuing Professional Development (CPD)

Programs designed to improve the skills and knowledge of professionals, including CPAs.

GAAP

Generally Accepted Accounting Principles, which are rules and standards for financial reporting.

Financial Reporting Standards Council (FRSC)

The body responsible for developing and improving accounting standards in the Philippines.

International Accounting Standards Board (IASB)

The organization that publishes International Financial Reporting Standards (IFRS) and maintains consistency with past standards.

Accounting vs Auditing

Accounting is constructive and ends with financial statements; auditing is analytical and begins after financial statements are prepared.

Accounting vs Bookkeeping

Accounting is conceptual and justifies why transactions are recorded; bookkeeping is procedural and maintains the records.

Accounting vs Accountancy

Accounting refers to specific fields, whereas accountancy refers to the profession of accounting practice.

Financial Accounting vs Managerial Accounting

Financial accounting focuses on financial statements for all users; managerial accounting provides information for internal decision-making.