Presented By:

Mrs. Lorna C. Quebrar

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 Accounting
Business (Corp)
Regulation

Data Rules/Regulation

Accounting
(Bookkeeping)
Financial
Accounting Management
(FS) Accounting
Reports

Outside Inside

•Investors
•Managers
•Loan Officers
(Hired or own the
•Banks
company)
•BIR (Gov’t)
•Employees
•Others (SEC)
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These Managers design and monitor the
information control to ensure confidentiality of
information; so that information will not “leak”
which will give outsiders advantage.

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 Financial Statement - annual to outsiders
- monthly to insiders

External
External Auditors
Auditors –– assures
assures that
that reasonable
reasonable representation
representation ofof the
the status
status of
of
the
the business
business
Consultants
Consultants –– (usually
(usually Accountants
Accountants also)
also) who
who particitate
particitate in
in the
the
information
information process.
process.
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 Financial Assets and
Owners/
Creditors
FINANCING Resources OPERATING Other
(Cash) Inventories

BOTH INVOLVES COMPUTATION

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2 Kinds of Accounting

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Ex: Acquired asset on account to be paid in Oct.

Accrual - Asset
Accounts Payable –Toyota
Cash Basis- No entry

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 Basic Financial Statements

1. Income Statement
(Indicator of business growth)
Users:
Managers/Employees – Availability of resources
for additional compensation.
Creditors/Stockholders – Interests/dividends

2. Balance Sheet
(Provides information about assets, how they are acquired
and interest of the owner.)
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 Basic Financial Statements

Assets = Liabilities and Capital (income)

3. Income Statement
(Assess the credit worthiness of the business, whether the
company can pay debts as they come due. )

Net increase/decrease during the year /mo. XX

Cash at the beginning of the mo./year XX
Cash at the end of the mo./year XX

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 Procedures that transform the business activities
into a Financial Statement
1. Gathering of documents (Purchase Order, Cash register tapes, Invoices)
2. Analysis (Accounts and Amounts)
• Books :
• Disbursement Books (Payments)
• Cash Receipts Book (Collections)
• Journal
• Included here:
• General Ledger
• Subsidiary Ledger (Control Account) – Accounts
Receivable/Payable
3. Journalizing/Posting
4. Adjustments (Errors)
5. Preparation of FS

VERY IMPORTANT: ACCOUNTABILITY AND CONTROL SHOULD BE

OBSERVED.
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1. Managers, Officers and Employees operate within their assigned
responsibilities and accountabilities.
2. Act for the good of the business.

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Expected Outcome:
Early detection
Unintentional error will be discovered.
Accountability to the overage or shortage
in relation to cash error or fraud.

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