business
Sole proprietorship
Partnership= limited partnership, general partnership
Corporation= independent from owners
Basic type of business
= service business: provides services
= merchandising business: buy and sell
= manufacturing business: raw materials into finish goods
= mixed/hybrid business: service and products
Not considered engage in business:
Gov. agencies and instrumentalitis
Pure compensation employee local or abroad private or government
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Legal requirements in organizing a business
=1. register business name and entity
sole( dti) etc.
=2. Secure business permit and licenses
=3. Comply with BIR Requirements.
Definition of accounting
(basaha an ppt)
Purpose of accounting
(bassaha an ppt)
Financial statements
(5)
Users of accounting information
Internal users
Owners
Managers
Employees etc.
External users
Public
Government agencies etc.
Criteria for a principle to become generally acceptable
= principle of relevance
= principle of objectivity
= principle of feasibility
GAAP
1.
2.
3.
4.
5.
6.
OBJECTIVITY PRINCIPLE
COST PRINCIPLE
MATERIALITY PRINCIPLE
MATCHING PRINCIPLE
CONSISTENCY PRINCIPLE
ADEQUATE DISCLOSURE PRINCIPLE
BASIC ACCOUNTING ASSUMPTIONS
1. Accounting entity ( the business is separate from owners, personal expenses)
2. Going concern ( the business will continue)
3. Time period (schedules, monthly, quarterly, yearly)
4. Unit of measure (depends on what currency the country has that your business is situated)
5. Accrual basis assumption ( recognized expenses and revenue)
Prepaid rent= assets
Branches of accounting
= financial accounting
= management accounting
= tax accounting
= auditing
Bookkeeping ( under accounting by bookkeeper) accounting cycle
Functions of bookkeeper
= general accounting (basaha an ppt)
= accounts recievable (basaha an ppt)
= accounts payable “
= inventory accounting “
Other functions “
THE ACCOUNTING CYCLE
Recording
= Identification of accountable (TRANSACTIONS)
= Journalizing (BOOK OF ORIGINAL ENTRY OR CALLED JOURNAL) (GENERAL LEDGER ARE CALLED BOOM OF FINAL ENTRY)
Posting
Summarizing
=Trial balance
=Adjusting entries (at the end of the accounting period)
Reporting
= financial statements
= closing entries
= post-closing trial balance (to check remaining dr and cr)
Asset liabilities income (real accounts)
CHART OF ACCOUNTS (LIST OF ACCOUNTS USED IN RECORDING ENTRIES IN JOURNAL)
SS NALA IT IBA
INCOME STATEMENT THEN STATEMENT OF CHANGES IN EQUITY