Accounting Reviewer
*Business Ownership ( Sole Proprietorship / Partnership / Corporation
*Activities ( Service Concern / Merchandising (Trading) / Manufacturing
*Types of Business (Source of Income) ( Service & Merchandising / Trading {Sole Proprietorship}
*Functions of Accounting Work ( Recording / Classifying / Summarizing
*Accounting- “art of recording, classifying & summarizing in a significant matter and in terms of money; transactions and events w/c are in part at least of a financial character and interpreting the results thereof.” ( How?
(AICPA – American Institute of CPA)
*Science- existing body of knowledge that governs accounting practice (Accounting Theory) *Art- creative skill & ability
*4 Functions of Accounting 1. Recording- commit to writing (business transactions) *Business Transactions- quantifiable business events w/c can be expressed in terms of money. Exchange of values. ( What? *Books of Accounts (journals / ledgers) ( Where? *Chronologically & Systematically (accordance to procedures & established rules of acctg) ( How? 2. Classifying- similar & inter-related transactions of events *Account / Account Title- device used to classify *3 Broad Categories – Assets / Liabilities / Capital 3. Summarizing- preparation of financial statements / financial reports *Financial Statements- Balance Sheet, Income Statement, Capital Statement, & Statement of Cash Flow 4. Interpreting- quantitative & qualitative interpretation of information in financial statements *Significant Information- Profitability, Growth Potential, Managerial Effectiveness, Stability (ability of a business to pay its long term obligations), Liquidity (how much cash the business has), & Solvency (does the business meet its current debts or obligations [less than 1 year]
*Accounting- “service activity whose purpose is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to
*Activities ( Service Concern / Merchandising (Trading) / Manufacturing
*Types of Business (Source of Income) ( Service & Merchandising / Trading {Sole Proprietorship}
*Functions of Accounting Work ( Recording / Classifying / Summarizing
*Accounting- “art of recording, classifying & summarizing in a significant matter and in terms of money; transactions and events w/c are in part at least of a financial character and interpreting the results thereof.” ( How?
(AICPA – American Institute of CPA)
*Science- existing body of knowledge that governs accounting practice (Accounting Theory) *Art- creative skill & ability
*4 Functions of Accounting 1. Recording- commit to writing (business transactions) *Business Transactions- quantifiable business events w/c can be expressed in terms of money. Exchange of values. ( What? *Books of Accounts (journals / ledgers) ( Where? *Chronologically & Systematically (accordance to procedures & established rules of acctg) ( How? 2. Classifying- similar & inter-related transactions of events *Account / Account Title- device used to classify *3 Broad Categories – Assets / Liabilities / Capital 3. Summarizing- preparation of financial statements / financial reports *Financial Statements- Balance Sheet, Income Statement, Capital Statement, & Statement of Cash Flow 4. Interpreting- quantitative & qualitative interpretation of information in financial statements *Significant Information- Profitability, Growth Potential, Managerial Effectiveness, Stability (ability of a business to pay its long term obligations), Liquidity (how much cash the business has), & Solvency (does the business meet its current debts or obligations [less than 1 year]
*Accounting- “service activity whose purpose is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to