Name: _________________________________________________ Section: __________________

Professor: _______________________________________________ Date: _____________________

ACTIVITY 1: INTRODUCTION TO ACCOUNTING

Directions: Explain and answer the following questions

1. In your own understanding, what is accounting?

- When I hear accounting, The first word that comes to my mind is “Language of
Business” . It focuses on revenue, expenses, analyzing and recording.
2. Why is accounting important in your life? It will help you especially when you plan to
put up a business, you will have the knowledge on how to handle expenses, revenue, and
the process of a business. Same if you are still a student it will help you a lot to have more
knowledge about business. It's really helpful to us to be business minded at a young age.
3. To whom are the origins of accounting generally attributed? Justify your answer. To
Luca Pacioli he is recognized as the father of Accounting, he also wrote the first book that
described double-entry processes.
4. Enumerate the different users of financial information and explain their specific
needs.
-Customers = A person who buys goods or services from a business or store.
-Competitors = are other businesses who can offer the same or similar goods and services to
your customers.
-Employees = A person who is employed for wages or salary.
-Investors = A person that puts money into a financial plan, business, and property.
5. Elaborate Functions of Accounting - All monetary transactions are recorded and
managed in a journal. Different ledgers are used to classify the records.
6. Differentiate the Branches of Accounting -
- Financial accounting involves recording and clarifying business transactions along with
preparation and presentation of financial statements
- Managerial accounting provides information to a company's internal structure, namely
management.
- Cost accounting, considered a subset of management accounting, focuses on evaluating costs
- Auditing is a branch of accounting that is usually done internally and externally.
Externally-State or federal auditing takes place with an independent, outside auditor who
examines a company's financial statements for accuracy
Internal auditing identifies and prevents tax issues or prepares the business for an outside audit.
-Tax accounting follows state and federal tax rules during tax planning or in the preparation of tax
returns
-Fiduciary accounting handles the accounts entrusted to the person responsible for custody or
management of property.
-Project accounting falls under the project management umbrella. This accounting analyzes costs
and prepares reports at regular intervals to track a project's financial progress.
- Forensic accounting, also known as legal accounting, handles legal matters related to
bankruptcy, fraud or mismanagement
- Fund accounting works with non-profit organizations (NPO) to ensure the correct and accurate
allocation of funds.
- Government accounting oversees and records state and federal fund allocation and
disbursement.
- Political campaign accounting oversees the development and implementation of a political
campaign's finance systems.
- International accounting serves to learn laws and regulations in other countries in order to
conduct business honestly and fairly.