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Accounting - I. Introduction To Accountancy, Business and Management
Accounting - I. Introduction To Accountancy, Business and Management
ACCOUNTANCY,
BUSINESS AND
MANAGEMENT 1
Dr. Mark D. Dublin
Lyceum of the Philippines University Manila
Senior High School Department
What is
accounting?
language of
financial performance.
provides
– Physical resources (Facilities, Supplies)
– Financial (Capital and Loans)
information – Intellectual or Human Resources (higher
management to rank &file)
• the means employed to finance those
resources
– Marketing/Selling of Products or Services
• the results achieved through their use
– Income from sale of products/service
– Dividends (investors)
Debit and • DEBIT
– an entry recording an amount owned,
Credit listed on the left-hand side or column of an
account.
– A debit is an accounting entry that either
increases an asset or expense account, or
decreases a liability or equity account.
– Value Received (Napala)
• CREDIT
– A credit is an accounting entry that either
increases a liability or equity account, or
decreases an asset or expense account.
– Value parted (kapalit)
DR CR
(debere) (credere)
Assets - are resources or things of value that Liabilities – are obligations and it is reported
are owned by a company. on a company's balance sheet. A common
example of a liability is accounts payable.
A=L+E
Assets Liabilities
DR CR
Cash = 100,000.00 Notes payable = 100,000.00
(from the bank) (loan from bank)
_______________________ _______________________
TOTAL = 200,000.00 TOTAL =200,000.00
A=L+E
We know Accounting is the systematic recording of
Nature of financial transactions and presentation of the
• Adjusted Entries
• Closing Entries
– are based on the account balances in an adjusted
trial balance. Temporary accounts include:
Revenue, Income and Gain Accounts.
• Post Closing Trial Balance
– is prepared after closing entries are made and
posted to the ledger.
• Financial Statements
– reports on a company's assets, liabilities, and
owners equity at a given point in time.
• Accounting is an art of recording,
Accounting classifying, summarizing and finalizing
is an art the financial data.
• The word ‘art’ refers to the way of
performing something. It is a behavioral
knowledge involving certain creativity
and skill that may help us to attain some
specific objectives.
• Accounting is a systematic method
consisting of definite techniques and its
proper application requires applied skill
and expertise. So, by nature accounting is
an art.
• Accounting finds out the financial
Accounting results and position of an entity and
is means the same time, it communicates this
information to its users.
and not an • The users then take their own decisions
end on the basis of such information.
Accounting • Accounting records the financial
transactions and date after classifying the
deals with same and finalizes their result for a
financial definite period for conveying them to their
information users.
• So, from starting to the end, at every
and stage, accounting deals with financial
transactions information.
• Only financial information is its subject
matter. It does not deal with non-
monetary information of non-financial
aspect.
• Accounting is recognized and
Accounting characterized as a storehouse of
is an information.
• This discipline of knowledge has been
information evolved out to meet the need of financial
system information required by different
interested groups.
Accounting is concerned with
Functions of Communication of the results of the
Accounting recorded transactions in the form of Final
Accounts consisting of the Profit and Loss
Account with different sections and the
Balance Sheet with a number of reports
and statements affixed at the end.
Function
managerial staff to carry out the operations
of the business efficiently.
• Accounting is an advisory service function
and is concerned with furnishing such
information to the management as will
facilitate efficient planning, operational
control and coordination of future activities
of the enterprise.
• So we see that Accounting helps in Budgetary
Control, Cost Control, Material Control and
Operational Control and also in minimizing
wastage, losses and errors and frauds.
History of • Luca Pacioli (1494), first described the system of
14 and
th merchants in his Summa de Arithmetica,
15 Century
Geometria, Proportioni et Proportionalita.
th
• Of course, businesses and governments had been
recording business information long before the
Venetians.
Century
• Center of Commerce shifted from
Italy to Spain to Portugal and then
to Northern Europe. In 1673,
France adopted its first official
accounting code.
19 th Century • The industrial revolution catapulted England
into an unrivaled prosperity. By the middle
of the 19th century, Great Britain led in
production of coal iron and cotton textile.
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