ACCOUNTING STUDY GUIDE
Topic 1: What is Accounting?
Accounting is an 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 a financial character, and interpreting the
results thereof.
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Topic 2: Accounting Process
The regular flow of the accounting cycle involves the following key steps:
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Identifying - Determining which transactions to record.
Recording - Writing down the financial transactions chronologically.
Classifying - Grouping similar transactions together (Ledger).
Summarizing - Preparing financial statements (Trial Balance, Income Statement, etc.).
Communicating - Distributing financial reports to users for decision-making.
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Topic 3: Bookkeeping vs. Accounting
BOOKKEEPING
Focuses on recording transactions
Prepares journals and trial balance
More clerical in nature
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ACCOUNTING
Covers the entire accounting process
Interprets and communicates information
More analytical in nature
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Topic 4: Users of Accounting Information
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Internal Users: These users are directly involved in managing and operating the business (e.g.,
Managers, Owners, Board of Directors).
External Users: These users are not directly involved in management but have a financial interest
(e.g., Investors, Creditors, Tax Authorities/BIR, Customers).
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Topic 5: Brief History of Accounting
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Accounting dates back to prehistoric times, when people began trading and needed primitive
methods to record transactions.
In 1494, Luca Pacioli published the famous book 'Summa de Arithmetica Geometrica Proportioni et
Proportionalita', which formally introduced the double-entry bookkeeping system.
Luca Pacioli is widely recognized and celebrated as the 'Father of Modern Accounting'.
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Topic 6: Common Branches of Accounting
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Financial Accounting
Management Accounting
Government Accounting
Auditing
Tax Accounting
Cost Accounting
Research Accounting
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