Accounting and

Its Environment
Chapter 1
Fundamental Business Model
Type of Businesses
1. Services
2. Trader
3. Manufacturer
4. Raw Materials
5. Infrastructure
6. Financial
7. Insurance
Forms of Organizations
1. Sole Proprietorship
2. Partnership
3. Corporation
Activities in Business Organization
1. Financing Activities
2. Investing Activities
3. Operating Activities
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 a financial character, and interpreting the results thereof.
Purpose and Phases of Accounting
Fundamental Concepts
Basic Principles
1. Objectivity Principle
2. Historical Cost
3. Revenue Recognition Principle
4. Expense Recognition Principle
5. Adequate Disclosure
6. Materiality
7. Consistency Principle
Fundamental Principles
1. Integrity
2. Objectivity
3. Professional Competence and Due Care
4. Confidentiality
5. Professional Behaviour
Branches of Accounting
1. Auditing
2. Bookkeeping
3. Cost Bookkeeping, Costing, and Cost Accounting
4. Financial Accounting
5. Financial Management
6. Management Accounting
7. Taxation
8. Government Accounting
Prepare for a quiz by 08PM.
 Announcement for next meeting:
Memorize the Definition of Accounting discussed & highlighted on our
discussion tonight which is also found in our previous slide. Prepare
for an oral recitation.