prelim unfinished reviewer

The earliest bookkeeping records were used by

Egyptians in building their pyramids.

oldest evidence

clay tablet of mesopotamia

oldest double entry books “perfect double netry book”

simplified t account "Massari (Treasury Officials) Ledgers of Commune de Genoa"

invneted double entry records using florentine approach now shown as journal entries

amantino manucci

venetian approach

ledgeer postings

memorandum book

contains all narrative transaction

ledger book

for the final entry (posting) , the center of the accounting syste

4 sectors in the practice of accountancy

• Public Accountancy -involves the rendering of an audit or accounting-related services to more than one (1)  client on a fee basis.

• Commerce and Industry - refers to employment in the private sector requiring professional knowledge as a CPA.

• Education and Academe - involves the teaching of accounting, auditing, taxation, and other technology-related subjects.

• Government - employment in the government where professional knowledge as a CPA is a prerequisite.

serves as the regulating law for the practice of accountancy in the philippines

Sections of RA9298

RA 9298 sscopes

scope of practice of accountancy

PRC for cpa

examinationa dn qualification of applicants

scope of exam and required rating

report of passed and failed candidates

5 branchesof accounting

• Financial Accounting - focuses on general-purpose financial statements

• Management Accounting - focuses on special purpose financial reports for use by an entity's management

• Tax Accounting - involves the preparation of tax returns and rendering tax advice.

• Government Accounting - refers to the accounting for the government, the emphasis is on the custody and disposition of public funds.

• Cost Accounting - the systematic recording and analysis of the cost materials, labor, and overhead incident to production.

• Auditing - the process of evaluating the correspondence of certain assertions with established criteria and expressing an opinion thereon.

what is a business

commercial activity intended for the development and distribution of goods and services with the main objective of generating profit.

3 legal forms of business explain each

Sole Proprietorship

• business is set-up and managed by 1 person called the proprietor

Partnership

• owned by 2 to 5 persons called partners who contribute money, property, talent /skill or industry to a  common fund with the purpose of sharing the profits among themselves

Corporation

• composed of 2 – 15 persons  called incorporators;

• Separate legal entity from the owners; can conduct business or enter into a contract by itself.

• One-Person Corporation (paid-up capital of 1 Million minimum)

3 types of business operation

Service Business

• provides service for a fee to clients or customers

Merchandising

• buys and sells goods or merchandise

Manufacturing

• buys raw materials and process these to finished goods then sells to customers

 

types of businss activities

Financing Activity

• When the owner finances the business with start-up capital in cash and other resources.

• Withdrawal of capital by owner or investor

• Loans from lenders

• Loans repaid to lenders

Investing Activity

• Acquisition of properties in land, building, machinery, equipment, furniture, and securities.

Operating Activities

• Earning income

•  Incurring expenses

2 phase in accoutning cycle explain each

• Recording phase (steps 1-3) -these steps are accomplished during the accounting period.

• Summarizing phase (steps 4-9)- these steps are accomplished at the end of the accounting period

general vs special journal

If the transactions of the business are few, the business can just use the General Journal. But if the transactions of the business are numerous, Special Journals are designed to record repetitive transactions of the business conveniently.

2 types of journal entries

1. Simple entry - there is only one (1) debit and one (1) credit entry.

2. Compound entry - if there are three(3) or more accounts required in one (1) journal entry.