Bulacan Polytechnic College San Rafael Campus First Semester S.Y. 2017 - 2018 Fundamentals of Accountancy, Business and Management 1 Instructor: Ms. Ma. Irene G. Gonzales, LPT To all my GAS 12 students, here is a copy of my presentation in Introduction to Accounting. You may click the DOWNLOAD button and PRINT the document for your personal copy. Thank you. Reference: Fundamentals of Accountancy, Business and Management 1 Joselito G. Florendo Rex Book Store

1. Introduction to Accounting
Ms. Ma. Irene G. Gonzales, LPT

2. Do you agree?
Numbers is the language of business.

3. Try to ponder!
How will the manager know if the company is doing
well?
How can she know if additional investment is needed
in a particular segment of the company?

4. Accounting is the answer!

5. What comes to your
mind when you hear
the word
ACCOUNTING?

6. What is Accounting?
• Involves the following processes:
–Identifying
–Recording
–Communicating
• Financial information
to internal and external users

7. What is Accounting?
• Helps quantify data for easier
interpretation
• Data are used as a guide for
future decision-making

8. ACCOUNTING
• A system that helps businesses track
events that affect them.
–Identifying the events that affect a
business
–Recording these events
–Communicating the summarized
results of all events within a particular
period to interested parties

9. ACCOUNTING (cont.)
• The accounting process aids in
improving businesses
• It can identify potential problems
encountered by the company
• Consolidated records can be used
to attract potential investors

10. The Accounting Process
1. Identification of
economic events
relevant to a business
a. Sale of Toyota cars
b. Provision of services by
a hospital
c. Payment to suppliers
d. Purchase of equipment
for the manufacturing of
Bench shirts

11. RELEVANT ECONOMIC EVENT
TAKE NOTE!
To be identified as a relevant economic event,
there should be…
TRANSFER OF THINGS WITH VALUE

12. The Accounting Process
2.Recording of relevant economic
events
History of financial activities

13. The Accounting Process
Should be done systematically
and chronologically for easier
tracking and interpretation

14. The Accounting Process
Records of events are inputted in
accounting books

15. The Accounting Process
3. Summarizes all the recorded economic
events into accounting reports
 Provides meaningful and presentable
information
 Makes information understandable to other
parties
 Financial statements – most popular
accounting reports

16. Nature of Accounting
1. Accounting is a process.
 A process is composed of multiple
steps that lead to a common end goal.
 Accounting is a process because it
performs the functions of identifying,
recording, communicating economic
events with the end goal of providing
information to internal and external
parties.

17. Nature of Accounting
1. Accounting is a process.
Process
• Accounting
steps
• IRC economic events
End goal
• Provide information to EI users

18. Nature of Accounting
2. Accounting is an art.
 Art refers to a way of performing something.
 It entails creativity and skills to help us
attain some objectives.
 Accounting is the art of recording,
classifying, summarizing, and finalizing
financial data.
 Accounting is a combination of techniques
and its application requires skill and
expertise.

19. Nature of Accounting
3. Accounting deals with quantifiable
financial information and
transactions.
 Non-financial transactions are NOT the
focus of the accounting process.
 However, non-financial data may be
used to interpret and better estimate
some financial data.

20. Nature of Accounting
4. Accounting is a means and not an
end.
 It is a TOOL to achieve specific
objectives.

21. Nature of Accounting
5. Accounting is an information
system.
 Storehouse of information
 Meets the need of financial
information required by different
interested groups

22. Group Activity
• Think of at least two types of business
belonging to different industries (e.g., Petron
from the oil industry and Jollibee from the
food industry).
• Give five examples of economic events that
each company identifies and records in its
respective accounting books.
• Discuss why these events or transactions
are recorded in the accounting books.

23. Functions of Accounting
A. Keeping systematic record of
business transactions
B. Communicating results to various
parties in or connected with the
business
C. Meeting legal requirements
D. Protecting properties of the business

24. Keeping systematic record of business
transactions
 Records should be systematic
enough to enable easy
understanding of readers
 “No matter how comprehensive the
records are, if they are not produced
systematically, then they provide
little to no value.”

25. Communicating results to various parties in
or connected with the business
 Used by the management in their
decision-making function
 External users (e.g., potential
investors, government agencies)
 Enable well-informed decisions

26. Meeting legal requirements
 To protect the public b providing
them the necessary information to
make sound decisions

27. Protecting properties of the business
 Records serve as the evidence that
properties of a business do exist or
how much of a particular resource
does a company have
 Helps in preventing employee fraud
and misappropriation of company
resources

28. HISTORY OF ACCOUNTING
 Ancient Mesopotamia
 people followed a system of writing
and counting money
 Its development may be related to
the taxation and trading activities of
temples

29. HISTORY OF ACCOUNTING
 Reign of Emperor Augustus (63 BC – 14 AD)
 The Roman government kept detailed
financial information of the deeds of
Emperor Augustus regarding the
stewardship of Roman sources
 Its development may be related to
the taxation and trading activities of
temples

30. HISTORY OF ACCOUNTING
 Suetonius and Cassius Dio
 Recorded that Augustus prepared an
account which listed public revenues,
the amounts of cash in the treasury, in
provincial tax officials, and in the
hands of the public contractors

31. HISTORY OF ACCOUNTING
 Luca Pacioli
 Disseminated the double-entry bookkeeping in
Italy during the fourteenth century
 Acknowledged as the father of modern
accounting
 Review of Arithmetic, Geometry, Ratio and
Proportion – first book printed with a treatise on
bookkeeping

32. HISTORY OF ACCOUNTING
 Double-entry bookkeeping system
 Bookkeeping system that has a debit and a credit
for each transaction
 System being used to this very day

33. HISTORY OF ACCOUNTING
 Chartered Accountant (modern profession)
 Chartered – fully qualified as a professional
 Chartered accountant - fully qualified
accountant: an accountant who has passed the
examinations of a governing professional body
that has been granted a royal charter
 Originated in Scotland during the 19th century
 Queen Victoria granted a royal charter to the
Institute of Accountants in Glasgow

34. HISTORY OF ACCOUNTING
 Accounting Standards at present
 PRFS
 Philippine Financial Reporting Standard
 PAS
 Philippine Accounting Standards

35. Seatwork # 1: Write the letter of the correct answer.
1. What is the title of the first book written with a treatise on
bookkeeping?
a. Review of Algebra, Geometry, Statistics and Probability
b. Review of Arithmetic, Geometry, Statistics and
Probability
c. Review of Arithmetic, Geometry, Ratio and Proportion
d. Review of Algebra, Geometry, Ration and Proportion

36. Seatwork # 1: Write the letter of the correct answer.
2. Which of the following DOES NOT belong to the group?
a. manager
b. supervisor
c. potential investors
d. chief executive officer

37. Seatwork # 1: Write the letter of the correct answer.
3. Which of the following is NOT a step in the accounting
process?
a. Communication
b. Verification
c. Identification
d. Recording

38. Seatwork # 1: Write the letter of the correct answer.
4. Who is considered as the father of modern accounting?
a. Cassius Dio
b. Suetonius
c. Augustus
d. Luca Pacioli

39. Seatwork # 1: Write the letter of the correct answer.
5. Which is NOT a nature of accounting?
a. Accounting entails creativity.
b. Accounting consists of steps.
c. Accounting is a storehouse of information.
d. Accounting is the end goal or objective.

40. Seatwork # 1: Write the letter of the correct answer.
6. Which is NOT an example of an ECONOMIC EVENT?
a. payment to dealer of school supplies
b. agent attended to customer’s concern
c. purchase of new iPhone 7Plus stocks
d. sales of diapers and baby wipes

41. Seatwork # 1: Write the letter of the correct answer.
7. What does PFRS stand for?
a. Philippines Financial Reporting Standard
b. Philippines Financier Results Standard
c. Philippines Financial Results Standard
d. Philippines Financier Reporting Standard

42. Seatwork # 1: Write the letter of the correct answer.
8. Who granted the royal charter to the Institute of
Accounting in Glasgow?
a. Queen Margareth
b. Queen Victoria
c. Quenn Elizabeth
d. Queen Rebecca

43. Seatwork # 1: Write the letter of the correct answer.
9. Which nature of accounting emphasizes that accounting
requires creativity and skills?
a. Accounting is an art.
b. Accounting is a process.
c. Accounting is an information system.
d. Accounting is a means and not an end.

44. Seatwork # 1: Write the letter of the correct answer.
10. What is the end goal of accounting?
a. To record all financial information every quarter
b. To collect all financial information every quarter
c. To detect potential problems of the company
d. To provide information to internal and external parties