BUSINESS- It is run on relationships, realized through transactions and exchanges,

aimed at increasing the value of business.

MANAGEMENT- It is the organization and coordination of the activities of a business
to achieve defined objectives. IDENTIFYING-This involves selecting economic events
that are relevant to a particular business transaction. RECORDING This involves
keeping a chronological diary (journals and ledgers) of events that are measured in
pesos. MEASUREMENT-is an integral part of recording as this is the part of the
process in which the
financial nature and aspects of transactions are officially recorded
COMMUNICATING-These are the outputs of the process
THREE WIDELY ACCEPTED DEFINITION OF ACCOUNTING
1.) American Accounting Association (AAA)- accounting is the process of identifying
measuring, and communicating economic information.
2. American Institute of Certified Public Accountants (AICPA)- defines accounting
as the art of recording, classifying, and summarizing in a significant manner.
3.)Accounting Standards Council (ASC)-sees accounting as a service activity.
NATURE OF ACCOUNTING
Accounting is a service activity,
-Accounting is a process.
-Accounting is both an art and a discipline.
-Accounting deals with financial information and
transactions.
-Accounting is an information system.
FUNCTIONS OF ACCOUNTING IN BUSINESS
1. To fulfill the stewardship function of the management (or owners.
2. To help interested users come up with informed decisions
3. To support daily operations of the business
FRATER LUCA BARTOLOMES PACIOLI
wrote Summa de Arithmetria, Proportioni et Proportionalita (Everything About
Arithmetic, Geometry, Proportion, and Proportionality) which was published in
Venice in November 1494
Born in Borgo San Sepolcro
Lived in Venice
⚫Tutor of the 3 sons of a rich merchant, Antonio de Rompiasi
FATHER OF MODERNACCOUNTING
DOUBLE ENTRY SYSTEM-(the forerunner of
"debits" and "credits"), the merchants had a way of tracking their business
affairs.
PUBLIC ACCOUNTING The accountant performs or offers to perform any activity that
will result to the issuance of an official report that is in accordance with
professional standards.
EXTERNAL AUDITING- the auditor critically examines the accounting records of the
client to check if the business transactions have been properly recorded
TAX PREPARATION AND PLANNING SERVICES-In this branch of public accounting, the
accountant is a tax specialist MANAGEMENT ADVISORY SERVICES -Management consulting
is an area in public accounting that involves financial planning and control, and
the development of accounting and computer systems.
PRIVATE ACCOUNTING-aaccountant is a salaried employee who deals with the company's
day-to-day accounting needs. FINANCIAL ACCOUNTING- this branch of private
accounting provides economic and financial information for investors. creditors,
and other external users
COST ACCOUNTING- focuses on accumulating manufacturing costs for financial
reporting and decision-making purpose.The primary role this accountant is to
determine the inventory cost for financial reporting purpose.
BUDGETING- This branch of private accounting tracks the financial details of the
firm, including the money taken in and the money spent by the company and the
staff.
ACCOUNTING INFORMATION SYSTEM-collects and process transaction data
TAX ACCOUNTING- It deals with the preparation of various tax returns and doing tax
planning for the business
INTERNAL AUDITING This branch of private accounting reviews the business operations
to check if they are complying to management policies.
GOVERNMENT ACCOUNTING It is the systematic process of collecting, recording,
classifying summarizing and intpreting the financial transactions relating to
revenues and expenditures of government offices
ACCOUNTING EDUCATION -responsible for training future accountants, it engages in
teaching accounting, financial management. taxation, and other related business
course.
CPA'S IN SPECIALIZED AREAS
FORENSIC ACCOUNTING -Accountant provide the detective work needed to investigate
and examine evidence of white-colat fnancial crimes such as stealing and fraud
INFORMATION TECHNOLOGY SERVICES -Business often seeks individuals who can design
and implement customized software system.
ENVIRONMENTAL ACCOUNTING-Accountants determine how companies can be both profitable
and environmentally responsible. INTERNATIONAL ACCOUNTING CPAs who work on this
area are often travel abroad and can speak and understand diffferent languages