Studied by 22 people
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Accounting cycle sequential step
-Identifying and analyzing transaction
-Journalizing
-Posting
-Preparing the unadjusted trial balance
-adjusting entries
-adjusted trial balance
-financial statements
-closing the books
-preparing the post-closing trial balance
-reversing entries
Father of modern accounting
Luca pacioli
Forms of business organizations
Sole proprietorship
Partnership
Corporation
Cooperative
Activities of business organization
Financing activities
Investing
Operating
Language of Business
Accounting
Inventor of double entry book keeping
Amantino Manucci
Alphabetical listing of all business accounts
The ledger
It is signed into law by President Gloria Macapagal Aroyo on May13,2004
Accountancy Act of 2004(R.A 9298)
Simplest form of business organization has a single owner
Sole Proprietorship
Business own by its stockholders( Complicated form of Business)
Corporation
Business owned and operated by two or more person called partner
Partnership
The process of identifying, recording and communicating economics events of an organization to interested user
Accounting
What are the nature of business
-Service
-Merchandising
-Manufacturing
-Agriculture
Four practices of a CPA
- Academe
- Government
- Public Accountancy
- Commerce and Industry (Private)
A concept where an organization or a section of a organization that evaluated separately
Entity Concept
Prepared on assumption that a reporting entity will continue in operation for the foreseeable future
Going Concern
Meaning of GAAP
Generally Accepted Accounting Principles
Acquired assets should be recorded at their actual cost
Historical Cost
Firms should use the same accounting method from period to period
Consistency
A mechanical task involving collection of basic financial
Bookkeeping
Accountancy Professions most significant service to the public
Auditing
Preparation of tax returns
Taxation
Competent end users uses hardware and software to solve information-related or decision-making problems
People
Present economic resource controlled by the entity as a result of past events
Asset
Present obligation of the entity to transfer an economic resource
Liability
Residual interest in the assets after deducting all its liabilities
Equity
Basic summary device of accounting
Account
A duty or responsibility that an entity has no practical ability to avoid
Obligation
Accounting Equation
Assets = Liabilities + Owner’s Equity
Most basic tool of accounting
Accounting Equation
An economic occurrence that causes changes in assets, liabilities, and equity.
Accounting events
Time between the acquisition of assets for processing and their realization in cash or cash equivalents
Operating cycle
A series of sequential steps or procedures perform to accomplish the accounting process
Accounting Cycle
Period of any twelve consecutive months
Fiscal Year
A period less than one year
Interim Period
Transactions are recognized when they occur
Accrual Basis
Transactions are recognized until cash is received or paid
Cash Basis
Annual period ending on December 31
Calendar Year
Entries made to update certain accounts
Adjusting Entries
Line that separates the current period to the next period
Cut-off Period
