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    FABM1 Week 1

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    andrea jane hina
    The document defines accounting as the process of identifying, recording, and communicating economic events according to the American Institute of Accountants and Weygandt. It describes the key functions of accounting as identifying, recording, classifying, summarizing, reporting, and interpreting transactions. The nature of accounting is explained as a service activity, process, art and discipline that deals with financial information. A brief history of accounting's development from Mesopotamia to modern standards is provided. Finally, the document distinguishes internal users like managers from external users like financiers.

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    FABM1 Week 1

    Uploaded by

    andrea jane hina
    29 views22 pages
    The document defines accounting as the process of identifying, recording, and communicating economic events according to the American Institute of Accountants and Weygandt. It describes the key functions of accounting as identifying, recording, classifying, summarizing, reporting, and interpreting transactions. The nature of accounting is explained as a service activity, process, art and discipline that deals with financial information. A brief history of accounting's development from Mesopotamia to modern standards is provided. Finally, the document distinguishes internal users like managers from external users like financiers.

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    FABM1 Week 1 Lesson

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    The document defines accounting as the process of identifying, recording, and communicating economic events according to the American Institute of Accountants and Weygandt. It describes the key functions of accounting as identifying, recording, classifying, summarizing, reporting, and interpreting transactions. The nature of accounting is explained as a service activity, process, art and discipline that deals with financial information. A brief history of accounting's development from Mesopotamia to modern standards is provided. Finally, the document distinguishes internal users like managers from external users like financiers.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    29 views22 pages

    FABM1 Week 1

    Uploaded by

    andrea jane hina
    The document defines accounting as the process of identifying, recording, and communicating economic events according to the American Institute of Accountants and Weygandt. It describes the key functions of accounting as identifying, recording, classifying, summarizing, reporting, and interpreting transactions. The nature of accounting is explained as a service activity, process, art and discipline that deals with financial information. A brief history of accounting's development from Mesopotamia to modern standards is provided. Finally, the document distinguishes internal users like managers from external users like financiers.

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    Fundamentals of

    Accountancy,
    Business and
    Management I
    WEEK 1: QUARTER 1
    MAM ANDREA
    Objectives

     Define Accounting
     Describe the Nature of Accounting
     Narrate the History/Origin of
    Accounting
     Define External and Internal users and
    give examples
    According to American Institute of
    Accountants (AICPA), ACCOUNTING
    is the art of recording, classifying and
    summarizing in a significant manner and
    in terms of money, transactions and
    events which are in part at least of
    financial character and interpreting the
    results thereof.
    According to Weygandt, J. et. al
    ACCOUNTING

    isthe process of identifying,


    recording and communicating
    economic events of an
    organization to interested users.
    Functions of Accounting
     IDENTIFYING. This involves selecting economic events
    that are relevant to a particular business transaction.
    The economic events at an organization are referred
    to as transactions. Transactions and events are
    generally supported by documentary evidences or
    proofs. Like sales transactions supported by Sales
    Invoice together with Delivery Receipt.
    Functions of Accounting
    RECORDING. It involves the writing
    and effects of the transactions and
    events hat have been analyzed
    using different books of accounts
    from General Journal, Special
    Journals, General Ledger, and
    Subsidiary Ledger.
    Functions of Accounting
    CLASSIFYING. It is the sorting or
    grouping of similar transactions and
    events in a specific period of time.
    Functions of Accounting
    SUMMARIZING. It is the process that
    involves grouping of various accounts
    referred to the classifying process where
    the accounts are grouped into assets,
    liabilities, owner’s equity, revenue, cost
    and expenses taken from the general
    ledger.
    Functions of Accounting

    REPORTING. Also communicating,


    It involves the preparation of the
    financial statements such as
    statement of financial position,
    statement of comprehensive income,
    statement of owner’s equity and
    statement of cash flows.
    Functions of Accounting

    INTERPRETING. This is the final


    function in the accounting process.
    The data from the financial reports is
    being used as basis for the future
    plan and framing of business
    policies.
    Nature of Accounting

    Accounting is a service activity.


    Providing professional service

    Accounting is a process.
    Step by step process
    Nature of Accounting

    Accounting is both an art and a


    discipline.
    Art in a way something is performed
    or classify. Discipline as it follows
    standards & professional ethics.
    Nature of Accounting

    Accounting deals with financial


    information and transactions.
    Knowing if the business is profitable or
    not.
    Nature of Accounting

    Accounting is an information system.


    Can be manual or computerized.
    Accept business and non-business
    transactions. Store house of information.
    Brief History of Accounting:
     I.Early Development in Mesopotamia
    • People followed a system of writing and
    counting money. The development of
    accounting may be related to the taxation and
    trading activities of temples.

    Clay tablets
    Brief History of Accounting:
     II. Development in the Roman Empire
    • The reign of Emperor Augustus (63BC-14AD)
    provided more evidence about the development of
    accounting.
    • The Roman government kept detailed financial
    information of the deed of Emperor Augustus regarding
    the stewardship of Roman resources.
    Brief History of Accounting:
    III.Dissemination of double-entry
    bookkeeping the 14th century Italy
    • Most important event in accounting history
    • Luca Pacioli is acknowledged as the father
    of modern accounting because of this. His
    “Summa de Arithmetica, Geometria,Proportioni
    et Proportionalita” (Everything about
    Arithmetic, Geometry and Proportion) is the first
    book printed with a treatise on bookkeeping.
    Brief History of Accounting:
    IV. Signing of Charter by Queen
    Victoria
    • The modern profession of the
    chartered accountant originated in
    Scotland in the 19th century when
    Queen Victoria granted a royal charted
    to the Institute of Accountants in
    Glasgow.
    Brief History of Accounting:
     V. Harmonization of Accounting Standards
    • PAS –Philippine Accounting Standards
    corresponding to International Accounting
    Standards (IAS);
    • PFRS -Philippine Financial Reporting Standards
    corresponding to International Financial Reporting
    Standards (IFRS);
    • Interpretation of the PFRS/PAS corresponding to
    interpretations of IFRS/IAS.
    Users of Accounting Information

    InternalUsers—composed of the
    management group who owns and/or
    manage and control the business entity.
    External Users—composed of the
    financing group and public group. They
    do not own/manage and control the
    business entity.
    Give examples of Internal User?
    Managers/ Top-level Management(CEO or
    President), Middle-level Management
    (Department Heads), Lower-Level Management
    (Supervisors)
    Board of Directors
    Administrative Head / Assistant
    Employees or Labor Unions
    Sales Representatives
    Thank you.

     Any questions?
     Clarifications?

    Next slide
    Quiz Time 

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