INTRODUCTION TO

ACCOUNTING
FMCC110 – PRINCIPLES OF ACCOUNTING

JOANN MARIE U. REVILLA

ACTIVITY 1. WHAT’S IN THE DATA?
The data presented below pertains to a Sari-sari Store owned by Tina
Go. Make a short report (any kind of report that you can think of) out of
the data.

• Cost of assorted grocery items sold, P18,275

• Transportation for buying grocery items , P 450
• Payment for plastic bags used in selling grocery items, P200
• Payment for store helper , P1,500
• Payment for CASURECO, P1,200
• Allowance “baon” given to Tina’s son, Junjun , P1,000
• Sold assorted grocery items, P31,875
Accounting
is responsible for making sense of these
business records through the reports.
DEFINITION OF
ACCOUNTING
Accounting is 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
financial character, and interpreting the results thereof.”
– American Institute of Certified Public Accountants (AICPA)
“Accounting is the process of identifying, measuring and
communicating economic information to permit informed
judgment and decision by users of the information.”
– American Accounting Association (AAA)
“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 decision.”
– Accounting Standards Council (ASC), succeeded by Financial
Reporting Standards Council (FRSC).
ACCOUNTING
PROCESS
1. Identifying
- recognition or non-recognition of business activities as
accountable events.
2. Measuring
- the assigning of peso amounts to the accountable events
and economic transactions.
3. Communicating
- is the process of preparing and distributing accounting
reports to potential users of accounting information.
This process includes the following phases:
➢Recording
➢Classifying
➢Summarizing
➢Interpretation
NATURE OF
ACCOUNTING
1. Accounting is a process
2. Accounting is an art
3. Accounting is a means and not an end
4. Accounting deals with financial information
and transactions
5. Accounting is an information system
FUNCTIONS OF
ACCOUNTING
The main functions of accounting are as follows:

1. Measurement
2. Forecasting
3. Decision Making
4. Comparison and Evaluation
5. Control
6. Government regulation and Taxation
HISTORY OF ACCOUNTING
2500 BC – 400 BC

“auditor”
1300-1400

Luca Pacioli Double Entry Bookkeeping

 1500-1700

Financial Management
Accounting Accounting
1700-1800

Industrial Revolution
1900-PRESENT

IAS to IFRS
MODERN DAY – CLOUD ACCOUNTING
Questions?