Reference:

Accounting Essentials I
Veron Anastacio

Accounting is a service activity. Its

function is to provide quantitative
information, primarily financial in nature,
about economic entities that is intended to
be useful in making economic decisions
in making reasoned choices among
alternative courses of action.

The 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 in interpreting the results
thereof.

Accounting is the process of identifying,

measuring and communicating economic
information to permit informed judgment
and decision by users of the information.

 Identifying

The

process of
recognizing events

recognizing

or

not

Measuring

The process of determining the monetary

value of the accounting elements

Communicating

The delivery of the accounting reports to

potential users of the accounting information

 Keeps track
Provides

of profits

framework by which profit can

be planned, monitored and controlled

 Whether

or not the business generates

profits or incurs losses

Whether

or not the business is growing

Whether

or not the business is on the verge

of bankruptcy

Whether

or not the business can pay its

liabilities as they fall due

 Auditing
Tax

Accounting
Management Consulting
Cost Accounting
Financial Accounting
Accounting Systems
Government Accounting
Budgeting
Accounting Education

 Public

practice

Commerce

and industry

Government
Education

 Accounting

covers a wider scope than

bookkeeping

Bookkeeping

refers to the
dimension of the accounting

Accounting

clerical

involves not only the

recording aspect of the accounting but
also
the
preparation
and
the
interpretation of financial reports

 Financial

Accounting

The

accounting process that starts with the

accumulation of accounting information and ends
with the preparation of the financial statements.

Financial

Reporting

The process of communicating financial accounting

to interested users of such information. It involves

supplying them with additional financial quantitative
and qualitative information to facilitate informed
decisions.

 Financial

Accounting

Serve the information needs of decision makers

outside the firm like government authorities and

creditors.
Managerial Accounting

Serve the information needs of decision makers

within the firm like shareholders and directors

or managers.

 Accounting

focuses on cost of the past

rather than current values
Accounting
does not capture nonfinancial items like opportunities and
threats,
management
strengths,
weaknesses, strategies and risks, human
resources and their knowledge and skills
which
all
impact
the
business
performance

 FRSC

Established in 2006 by the Board of Accountancy

(BOA)
of
the
Professional
Regulation
Commission (PRC)
Funded by the Philippine Institute of Certified
Public Accountants (PICPA)
It was established with main function of
promulgating accounting standards and the
generally accepted accounting principles in the
Philippines.

Investors
Employees
Lenders
Suppliers and other trade creditors
Customers
Government
Public

External Users those persons or entities who

are outside the business enterprise and who are
not involved in the day-to-day operations of the
enterprise.
Internal Users individuals from within the
business enterprise.