FABM-LESSON-1-4-Introduction.pptxvuujioi

FUNDAMENTALS
OF
ACCOUNTANCY, BUSINESS
AND
MANAGEMENT
Teacher: Mr. Paulo G. Escuadro

1. I I A A N N L F C
FINANCIAL

4. C A A O I N N T T R S
TRANSACTION

5. G O T A U I N N C C
ACCOUNTING

6. E O I R R C D G N
RECORDING

8. Y I I I A L L T B
LIABILITY

9. Y I I I E N N D T F G
IDENTIFYING

1. FINANCIAL
2. ASSET
3. JOURNAL
4. TRANSACTION
5. ACCOUNTING
6. RECORDING
7. CAPITAL
8. LIABILITY
9. IDENTIFYING
10.BUSINESS
CORRECT ANSWERS

FUNDAMENTALS
OF
ACCOUNTANCY, BUSINESS
AND
MANAGEMENT
(Lesson 1-4)
Teacher: Mr. Paulo G. Escuadro

Learning Competencies
 Define accounting
 Describe the nature of accounting
 Explain the functions of accounting in business
 Narrate the history / origin of accounting

What knowledge is required in the
study of Accounting
Firstly, it is your analytical ability that counts most.
Secondly, it is your stored knowledge in arithmetic and not
mathematics that are needed.
Thirdly, there is a psychological factor behind.
Lastly, change a little your study habit. An accountant
must be a USA made. He must have the
Understanding, Speed and Accuracy.

Why do we need
to study
Accounting?

Why do we need to study
Accounting?
People in all walks of life, be it a
professional or non-professional are
living in an era of accountability. We
have to pay our income taxes, house
rentals, tuition fees for our children,
telephone and lights bills, salaries for
our house helpers and many others.

Why do we need to study
Accounting?
We forgot that all of these things we
do deals with accounting. Therefore, it
is not a reason that only accountants
should study accounting but the non-
accountants as well especially they
occupy the biggest portion of our
society.

ACCOUNTING
Define as the art of recording,
classifying and summarizing in a
significant manner and in terms of
money, transaction and events which
are, in part at least of financial
character and interpreting the result
thereof. According to American
Institute of Certified Public
Accountant (AICPA)

ACCOUNTING
Is the process of IDENTIFYING,
RECORDING and COMMUNICATING
economic events of an organization to
interested users.

ACCOUNTING
IDENTIFYING this involves selecting economic
events that are relevant to a particular business
transactions.
Bakery Business
Example of an Economic event:
• Sales of bread and other bakery products
• Purchase of flour that will be used for baking
• Purchases of trucks needed to deliver products

ACCOUNTING
IDENTIFYING this involves selecting economic
events that are relevant to a particular business
transactions.
Business Transactions takes place once a business
ventures starts operations. These are the
interactions between business and other
stakeholders.
It must be identified, measured and documented
through an accounting process.

ACCOUNTING
RECORDING listing down of accountable
events.
Accounting records transactions in the
accounting journals which is
chronologically lists transactions and
events that affect the business. Journal is
often called the book of original entry.

ACCOUNTING
COMMUNICATING or reporting the results
to users of financial information.
This involves the preparation of
accounting reports called Financial
Statement which is submitted or made
available to users of financial information
for their decision making.

Types of Financial Statements
1. Balance Sheet / Statement of Financial
Position – it shows a list of the resources,
debts and capital of enterprise as of date
of reporting
Resources = Asset
Debts = Liability
Capital = Owner’s Equity

2. Income Statement/Statement of
Comprehensive Income – It shows the
income, expensive and net result of
operations over a period of time up to the
date of reporting.

3. Statement of cash flows – It shows the
changes in the cash position: Cash inflows
and outflows of the enterprise for the
period.
4. Statement of Change in Equity – shows
a summary in change in capital of the
enterprise during the period

Types of Financial Statesments
5. Notes on the Financial Statements – It
shows additional disclosure of certain
information which are useful to users of
the financial statements in understanding
the information in the financial statement.

NATURE
OF
ACCOUNTING
(Lesson 2)

Nature of Accounting
The basic features of accounting are as follows
1. Accounting is a service activity: Accounting
provides assistance to decision makers by
providing them financial reports that will guide
them in coming up with sound decisions.
2. Accounting is a process: A process refers to
the method of performing any specific job steps
by step according to the objectives of target.

3. Accounting is both an art and a discipline:
accounting is the art of recording, classifying,
summarizing and finalizing financial data.
4. Accounting deals with financial information
and transaction: accounting records financial
transactions and data, classifies these and
finalizes their results given for a specified
period of time, as needed by their users

5. Accounting is an information system:
Accounting is recognized and characterized as
a storehouse of information. As a service
functions, it collects processes and
communicates financial information of any
entity.

FUNCTIONS
OF
ACCOUNTING
IN
BUSINESS
(Lesson 3)

The language of business. It serves as a
means of communication between business
and interested users either internal and
external.
Function of Accounting in Business

Function of Accounting in Business
It can be attributed to the three fundamental
objective of an information system that
performs the following task.
1. To fulfill the stewardship function of the
management or the owners.
2. To help interested users to come up with
informed decisions
3. To support daily operations of the business

What is the
difference between
the ACCOUNTING
and the
BOOKKEEPING?

What is the difference between the
ACCOUNTING and the BOOKKEEPING?
Accounting is broader as it. Includes
the bookkeeping function.
Bookkeeping is just confined with the
recording of monetary transaction
which is part of the accounting process
Is responsible to records business
transaction.

HISTORY
OF
ACCOUNTING
(Lesson 4)

LUCA PACIOLI
The
father
of
ACCOUNTING
The founder of double entry-
bookkeeping. The debit and
credit

FABM-LESSON-1-4-Introduction.pptxvuujioi

ANSWER ME
1. It is a report that shows a list of the
resources, debts and capital of enterprise
as of date of reporting.

ANSWER ME
2. Is the process of IDENTIFYING,
RECORDING and COMMUNICATING
economic events of an organization to
interested users.

ANSWER ME
3. The founder of double entry-
bookkeeping and the father or accounting.

ANSWER ME
4. It is responsible to records business
transaction.

ANSWER ME
5. These are the interactions between
business and other stakeholders.

ANSWER ME
6. It is a report that shows the income,
expensive and net result of operations
over a period of time up to the date of
reporting.

ANSWER ME
7. Other term for accounting reports.

ANSWER ME
8. “USA” stands for?

ANSWER ME
9. It is a report that shows the changes in
the cash position: Cash inflows and
outflows of the enterprise for the period.

ANSWER ME
10. “AICPA” stands for?

FABM-LESSON-1-4-Introduction.pptxvuujioi

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