School of Business Administration and Accountancy
University of Baguio Vision: In pursuit of perfection, the University of Baguio is committed to
provide balanced quality education by nurturing academic excellence, relevant social skills and ethical
values in a fun learning environment.
University of Baguio Mission: The University of Baguio educates individuals to be empowered
professionals in the global community.
BACTNG1 (6 units) - INTRODUCTORY ACCOUNTING
1. Course Description
This course provides an introduction to accounting, within the context of business and business decisions.
Students explore the role of accounting information in the decision-making process and learn how to use various types of
accounting information found in financial statements and annual reports. This course starts with a discussion of
accounting thought and the theoretical background of accounting and the accounting profession. The next topic is the
accounting cycle for service and merchandising concerns – recording, handling, and summarizing accounting data,
including the preparation and presentation of financial statements for merchandizing and service companies. Emphasis is
placed on understanding the reasons underlying basic accounting concepts and providing students with an adequate
background on the recording, classification, and summarization functions of accounting to enable them to appreciate the
varied uses of accounting data. Also discussed are special journals, the voucher system, and simple bank reconciliation.
2. Course Coverage
Course Syllabus
VMO
Seat Plan
Leveling of Expectations
1. INTRODUCTION
Development of Accounting
1.1
Accountancy in the Philippines
1.1.1 Globalization
1.1.2 Policy Developments (www.accounting.rutgers.edu/raw)
1.1.3 Technological Developments
1.1.4 Accountancy Act of 2004
1.1.5 Scope of Practice
1.1.5.1 Public Accountancy
1.1.5.2 Commerce and Industry
1.1.5.3 Education/Academe
1.1.5.4 Government
1.1.6 The Professional Regulatory Board of Accountancy
1.1.7 Qualifications of members of the Professional Regulatory Board
1.1.8 The Certified Public Accountant Examination
1.1.8.1 Qualifications of Applicants
1.1.8.2 Scope
1.1.8.3 Rating in the Licensure Examination
1.1.8.4 Report of Ratings
1.1.8.5 Failure of Candidates to take Refresher Course
1.1.9 Code of Ethics for Philippine CPAs
1.1.9.1 Distinguishing Characteristics of a Profession
1.1.9.2 Basic Requirements to meet the Objectives on the Accountancy Profession
1.1.9.2.1 Credibility
1.1.9.2.2 Professionalism
1.1.9.2.3 Quality of Services
1.1.9.2.4 Confidence
1.1.9.3 Fundamental Principles/Prerequisites to Achieve the Objectives of the Accountancy
Profession
1.1.9.3.1 Objectivity
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1.1.9.3.2 Professional Competence and Due Care
1.1.9.3.3 Confidentiality
1.1.9.3.4 Professional Behavior
1.1.9.3.5 Technical Standards
1.1.10 The Accounting Profession
1.1.11 Professional Organization-PICPA
1.2.11.1 Objectives
1.1.12 Core Competencies for Accountants
1.1.12.1 General knowledge
1.1.12.2 Organizational and Business Knowledge
1.1.12.3 Information Technology Knowledge
1.1.12.4 Accounting Knowledge
1.1.12.5 Skills
1.1.12.6 Values
1.1.13 Business Ethics
1.1.14 International Accounting Standards
1.2
Specialized Accounting Services
1.2.1 Auditing
1.2.2 Cost Accounting
1.2.3 Financial Accounting
1.2.4 Internal Auditing
1.2.5 Government Accounting
1.2.6 Tax Accounting
1.2.7 Management Consulting
1.2.8 International Accounting
1.3
Forms of Business Organization
1.3.1 Sole Proprietorship
1.3.2 Partnership
1.3.3 Corporation
1.4
Activities Performed by Business Organizations
1.4.1 Service concern
1.4.2 Merchandizing
1.4.3 Manufacturing
1.4.4 Agriculture
1.5
Definition of Accounting
1.6.1 Phases of Accounting
1.6.1.1 Recording
1.6.1.2 Classifying
1.6.1.3 Summarizing
1.6.1.4 Interpreting
1.6
Bookkeeping and Accounting
1.7
Fundamental Concepts
1.8.1 Entity Concept
1.8.2 Periodicity Concept
1.8.3 Stable Monetary Unit Concept
1.8
Users and their Information Needs
1.8.1 Investors/ Owner
1.8.2 Employers / Labor Union
1.8.3 Lenders
1.8.4 Suppliers and other trade creditors
1.8.5 Customers
1.8.6 Government and their Agencies
1.8.7 Public
2. THE ACCOUNTING EQUATION AND
THE DOUBLE ENTRY SYSTEM
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
Accounting Information System
Elements of Financial Statements
2.2.1 Real Accounts
2.2.2 Nominal Accounts
The Account
2.3.1 Account – Definition
2.3.2 Typical Account titles Used
The Accounting Equation
The Double Entry System-Debits and Credits
The Rules of Debit and Credit
Accounting Events and Transactions
Effects of Transactions
Typical Account Titles Used
Analyzing Business Transactions
2.10.1 Use of Financial Transaction Worksheet
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2.10.2 Use of T-Account
3. ACCOUNTING FOR A SERVICE BUSINESS
3.1
Introduction of the Accounting Cycle
3.1.1 Identifying transactions to be recorded
3.1.2 Journalizing of transactions in the general journal
3.1.3 Posting of journal entries in the general ledger
3.1.4 Trial Balance preparation
3.1.5 Journalizing adjusting entries
3.1.6 Worksheet preparation
3.1.7 Financial statements preparation
(Web site: com.profile/income/sales)
3.1.8 Closing entries
3.1.9 Preparation of the Post Closing Trial Balance
3.1.10 Preparation of the Reversing Entries
3.2
Transaction Analysis
3.2.1 Identifying the transactions from the source documents
3.2.2 Indicate the accounts—either assets, liabilities, equity, income or expense affected by the transaction
3.2.3 Ascertain whether the account is increased or decreased by the transaction
3.2.4 Using the rules of debit and credit
3.3
Journalizing Transactions
3.3.1 Journalizing-definition
3.3.2 The Journal
3.3.3 Contents of the General Journal
3.3.4 Types of Journal Entries
3.3.4.1 Simple Entry
3.3.4.2 Compound Entry
3.4
Posting
3.4.1 Posting-definition
3.4.2 The Ledger-definition
3.4.3 Types of Ledger
3.4.3.1 General Ledger
3.4.3.2 Subsidiary Ledger
3.4.4 Type of Accounts in the General Ledger
3.4.4.1 Permanent Accounts
3.4.4.2 Temporary Accounts
3.4.5 Procedures in posting journal entries to ledger
3.4.6 Chart of Accounts
3.4.7 Normal Balance of an Account
3.4.8 Ledger Accounts After Posting
3.4.8.1 Footing
3.4.8.2 Account Balance
Trial Balance
3.5.1 Definition
3.5.2 Procedures in Preparing the Trial Balance
3.5.2 Locating Errors
3.5
3.6 Preparing the Worksheet
3.6.1 6-column worksheet
3.7 Preparation of Financial Statements
3.7.1 Statement of Recognized Income and Expenses
3.7.2 Statements of Changes in Owner’s Equity
3.7.3 Statement of Financial Position
3.8 Preparation of Closing Entries
3.9 Preparation of Post-Closing Trial Balance
3.10 Adjusting the Accounts
3.10.1 Periodicity Concept
3.10.2 Revenue Recognition Principle
3.10.3 Expense Recognition Principle
3.10.4 The Need for Adjustments
3.10.5 Deferrals and Accruals
3.10.5.1 Deferrals
3.10.5.1.1 Prepaid
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Expense
3.10.5.1.2 Precollected Income
3.10.5.3 Depreciation
3.10.5.2 Accruals
3.10.5.2.1 Accrued Expense
3.10.5.2.2 Accrued Income
3.10.5.2.3 Accrual for Bad Debts
3.10.6 Effects of Omitting Adjustments
3.11 Worksheet with Adjusting Entries
3.11.1 8-column worksheet
3.12
3.13
3.14
3.15
Preparation of Financial Statements
Closing Entries
Post-Closing Trial Balance
Reversing Entries
4.0 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
4.1 Definition
4.2 Criteria for General Acceptance of an Accounting Principle
4.3 Generally Accepted Accounting Principles
5.0 FRAMEWORK FOR THE PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS
5.1 Underlying Assumptions
5.1.1 Accrual Basis
5.1.2 Going Concern
5.2 Qualitative Characteristics of Financial Statements
Threshold Quality – materiality
Relating to Content
Relating to Presentation
5.3 Constraints on Relevant and Reliable Information
6.0 ACCOUNTING FOR A MERCHANDISING BUSINESS
6.1 Comparison of Income Statements Between Service and Merchandising
6.2 Operating Cycle of a Merchandising Business
6.3 Source Documents
6.3.1 Sales Invoice
6.3.2 Bill of Lading
6.3.3 Statement of Account
6.3.4 Official Receipt
6.3.5 Deposit Slips
6.3.6 Check
6.3.7 Purchase Requisitions
6.3.8 Purchase order
6.3.9 Receiving Report
6.3.10 Credit Memorandum
6.4
Inventory System
6.4.4 Periodic Inventory System
6.4.5 Perpetual Inventory System
6.5
Terms of Transactions
6.5.4 Trade Discounts
6.5.5 Cash Discounts
6.5.5.1.1
Purchase Discount
6.5.5.1.2
Sales Discount
6.5.6 Credit Term
6.5.7 Discount Period
6.6 Transportation Cost
6.6.1 Transportation In/Freight In
6.6.2 Transportation Out/Freight Out
6.6.3 FOB Shipping Point
6.6.4 FOB Destination
6.6.5 Freight Prepaid
6.6.6 Freight Collect
6.6.7 Determination of Ownership of Merchandise
6.7 Accounting Procedures for Purchase/Merchandising Transactions
6.7.1 Net Sales
6.7.1.1 Gross Sales
6.7.1.2 Sales Returns and Allowances
6.7.1.3 Sales Discounts
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6.7.2 Cost of Goods Sold
6.7.2.1 Merchandise Inventory,
Beginning
6.7.2.2 Purchases
6.7.2.3 Purchase Returns and
Allowances
6.7.2.4 Purchase Discounts
6.7.2.5 Freight In
6.7.2.6 Goods Available for Sale
6.7.2.7 Merchandise Inventory, End
6.7.3 Gross Profit
6.7.4 Expenses
6.7.5 Net Income / Net Loss
6.7.6 Other Income
6.7.7 Finance Cost
6.7.8 Need for Physical count
6.7.9 Merchandise Inventory Valuation
6.8 Worksheet
6.8.1 10-column worksheet
6.9 Adjusting Entries
6.10 Financial Statements
6.11 Closing Entries
6.12 Post-Closing Trial Balance
7.0 SPECIAL JOURNALS
7.1 Control Accounts and Subsidiary Ledgers
Special Journals (www.greatplains.com/accounting/productinfo.asp)
7.2.1 Advantages of Using Special Journals
7.2.2 Types of Special Journals
7.2.2.1 Sales Journals
7.2.2.2 Cash Receipts Journal
7.2.2.3 Purchases Journal
7.2.2.4 Cash Disbursements Journal
7.3 General Journal
7.4 Proving the Ledgers
7.5 Flexibility of Special-Purpose Journals
8.0 VOUCHER SYSTEM
8.1 Voucher
8.2 Voucher Register
8.3 Unpaid Voucher Files
8.4 Check Voucher Files
8.5 Paid Voucher Files
8.6 Special Problems in a Voucher System
9.0 CASH
9.1 Nature, Valuation and Classification
9.2 Internal Control Over Cash
9.3 Petty Cash Fund (Imprest Method)
9.4 Checking Account/Current Account
9.5 Preparing the Bank Reconciliation Statement (Adjusted Balance Method)
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Grading System:
For Board Exam Subjects: the cut-off score is 70%. The highest possible grade is ninety-nine (99); the lowest passing
grade is seventy-five (75); and the lowest failing grade is sixty-five (65).
Grade requirement for Accountancy Students: At least 85
First grading Class standing = 70 % ; Exam = 30 %
Midterms
Class standing = 60 % ; Exam = 40 %
( Tentative Midterm Grade x 2 + First Grading ) / 3 = Midterm Grade
Finals
Class standing = 50 % ; Exam = 50 %
( Tentative Final Grade x 2 + Midterm Grade ) / 3 = Final grade
TEXTBOOK:
Ballada, Win Lu and Ballada, Susan (2011).
Bookstore.
Basic Accounting. Manila: Dom Dane Publishers and Made Easy
REFERENCES:
Lopez, Rafael M. Jr. (2009-10) Fundamentals of Accounting 2009 Millennium Edition. MS Lopez Printing & Publishing.
Valencia, Edwin, et al. (2009) Basic Accounting 2009-2010 Edition, Valencia Educational Supply.
Edmonds, Olds,et.al. (2007) Fundamental Financial and Managerial Accounting Concepts 2007 Edition. McGraw Hill
Companies, Inc.
Weygandt, Kieso, et.al., (2005) Hospitality Financial of Accounting, John Wiley & Sons, Inc.
Jagels, Martin G., et.al. (2005) Hospitality Management Accounting, 9th Edition. John Wiley & Sons, Inc.
Guenther, David (2005) Financial Reporting and Analysis. Boston: McGraw Hill Companies, Inc.
Warren, Reeve et.al. (2005) Accounting 21st Edition. Thomson Asian Publishing.
www.careers-in-accounting.com
www.accounting.rutgers.edu.raw
com.profile/income/sales
www.greatplains.com/accounting/productinfo.asp
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