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    ABM 1 Worksheet

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    murciaabi3
    Accounting involves recording, classifying, summarizing, and interpreting financial transactions and other information about companies. The four main phases of accounting are recording, classifying, summarizing, and interpreting. Some key branches of accounting include financial accounting, forensic accounting, auditing, tax accounting, and government accounting. Basic principles of accounting are the cost principle, matching principle, and full disclosure principle. Financial information is useful when it is comparable, verifiable, timely, and understandable to both internal and external users.

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    ABM 1 Worksheet

    Uploaded by

    murciaabi3
    10 views2 pages
    Accounting involves recording, classifying, summarizing, and interpreting financial transactions and other information about companies. The four main phases of accounting are recording, classifying, summarizing, and interpreting. Some key branches of accounting include financial accounting, forensic accounting, auditing, tax accounting, and government accounting. Basic principles of accounting are the cost principle, matching principle, and full disclosure principle. Financial information is useful when it is comparable, verifiable, timely, and understandable to both internal and external users.

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    Accounting involves recording, classifying, summarizing, and interpreting financial transactions and other information about companies. The four main phases of accounting are recording, classifying, summarizing, and interpreting. Some key branches of accounting include financial accounting, forensic accounting, auditing, tax accounting, and government accounting. Basic principles of accounting are the cost principle, matching principle, and full disclosure principle. Financial information is useful when it is comparable, verifiable, timely, and understandable to both internal and external users.

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    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    10 views2 pages

    ABM 1 Worksheet

    Uploaded by

    murciaabi3
    Accounting involves recording, classifying, summarizing, and interpreting financial transactions and other information about companies. The four main phases of accounting are recording, classifying, summarizing, and interpreting. Some key branches of accounting include financial accounting, forensic accounting, auditing, tax accounting, and government accounting. Basic principles of accounting are the cost principle, matching principle, and full disclosure principle. Financial information is useful when it is comparable, verifiable, timely, and understandable to both internal and external users.

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    of 2

    1) Define Accounting.

    Accounting is the act or process of keeping financial records. This process includes
    measuring, processing, and sharing financial transactions and other information about
    companies. Accounting records and reports a company’s financial information, such as financial
    transactions, performance, and cash flows.
    2) Enumerate and distinguish the four phases of accounting.
    The four phases of accounting are recording, classifying, summarizing, and interpreting.
    The recording phase of accounting involves recording all financial transactions systematically
    and chronologically. In the classifying phase of accounting, items or data are sorted and
    grouped under their respective category or account. The summarizing phase of accounting
    summarizes or sums up the data that is presented in a manner that is easy to read and
    understand. Lastly, the interpreting phase of accounting is where the recorded, classified, and
    summarized data is interpreted and analyzed for the purpose of making decisions related to the
    financial status of the company.
    3) What are the Branches of Accounting? Give at least five (5) samples and define each.
    Financial accounting focuses on historical data which involves recording and classifying
    financial transactions. Forensic accounting is a branch of accounting that handles legal matters
    and deals with cases like bankruptcy, fraud, and mismanagement. Auditing is another branch of
    accounting that inspects or evaluates historical data or records belonging to a business. Tax
    accounting deals with matters related to tax that affect a business. Government accounting is
    concerned with the use and distribution of public finances.
    4) What are the Basic Principles of Accounting? Give at least three (3) samples and define each.
    Cost principle is one of the basic principles of accounting explaining the concept that a
    business should only record its assets, liabilities, and equity investments at the cost of the
    original purchase. Another one is the matching principle in which expenses should be recorded
    along with the revenue at the time it is incurred. One last example is the full disclosure principle
    wherein financial statements should be complete as it affects the reader’s understanding.
    5) What makes financial information useful? What is the significance of each?
    Financial information is useful when it is comparable, verifiable, timely, and
    understandable. Comparability is significant as it enables users to draw sensible conclusions. A
    verifiable information is when the same data and assumptions are reproduced. When
    information is timely, the easier and more useful it is for users. Information that is easily
    understood is significant for users.
    6) Who are the users of accounting information?
    The users of accounting information are the internal and external users. Internals users
    include the owners, managers, and the employees. The external user of accounting are the
    investors, lenders, suppliers, customers, tax authorities, government, auditors, and the public.
    7) To make financial information understandable for as many users as possible, accountants
    should present simple, abbreviated, uncomplicated financial statements. What is your view on
    this statement?

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