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101

Accounting: Concepts and

Principles

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Concept, Objectives and Functions of
Accounting
1 Accounting Definition

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:business entity

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....
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:.
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()2 :
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System

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Accounting Information

:System
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:
( )1 :Inputs
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( )2 :Processing
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( )3 Outputs:
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( )4 :Feedback
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:Information System
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( )1 :data
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( )2 :processing
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:

:
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( )3 :information
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:Accounting Information System

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( )1 :financial data
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( )2 : accounting processing
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( )3 :financial information
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2 :Objectives of Accounting
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:

1 result
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2 financial position

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:
1 net cash flows

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2 .
3 .

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: Functions of Accounting

:measurement
( )1 :recognition
transactions .
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financial
transactions .

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( )2 quantitative measurement:

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( )3 recording:

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( )4 classification:


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( )5 summarizing:

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communication

: disclosure

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.financial reporting

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4 Decision system:
.Decision System
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Decision system

Accounting system

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5 :
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:scientific


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: :Accounting

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:practical

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: : Bookkeeping

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Users of Accounting Information

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Internal Users of Accounting Information

External Users of Accounting Information

:Internal Users of Accounting Information

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:
1Management:

personnel:

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:External Users of Accounting Information

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-1() Owners
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-2 :Potential Investors

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-3 :Lenders

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-4 :Suppliers
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-5 :Governmental Agencies
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-6 :Customers

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-7 : General Public

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Branches of Accounting

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1 Financial Accounting:

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. financial reporting

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2 : Managerial Accounting

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3 :
- :Cost Accounting

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- Governmental Accounting:


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- :Tax and Zakaat Accounting

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- :Auditing

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- : Accounting System
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Basic Accounting Glossary

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1 :Business entity
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2 () : Assets

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() : Fixed Assets

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() : Current Assets

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3 : Liabilities

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:

() :Fixed Liabilities

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():Current Liabilities

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Owner's Equity

Capital retained

:
.earnings
5 : Revenues
( )
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6 :Expenses
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7 :Account
( )

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Financial Statements

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:
1 Income Statement.
2 () Financial Position Statement (Balance
).Sheet
3 .Statement of Cash Flows

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Income Statement:

2 ()

Financial Position Statement (Balance

):Sheet

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:Statement of Cash Flows

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Characteristics of Accounting Information

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-1 :Relevance

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-2 : Timeliness
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-3 : Verifiability

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-4 () ): Objectivity (Freedom of Bias

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-5 : Accuracy

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-6 :Quantifiability
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)Generally Accepted Accounting Principles (GAAP
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-1 :Accounting Entity
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-2 :Monetary Unit

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-3 :Historical Cost

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-4 : Going Concern

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-5 () :Accounting Period
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-6 :Matching

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- 7 () :Revenue Recognition

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- 8 () :Consistency


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-10 ( ) :Conservation
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-11 :Materiality

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-12 :Disclosure

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