ACCOUNTIN

G PLUS
Accounting: its
Environment, History
and Emerging Trends

Module I
TIMOLEON S. LIANZA
 Accounting: Its Environment,
History & Emerging Trends
LEARNING OUTCOMES:
Describe the meaning
1 of business

Compare and contrast

2 types and forms of
business organizations
Digest the meaning of

3 accounting and why it is

called a language of
business
Categorize users of
4 information and their

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needs
 Accounting: Its Environment,
History & Emerging Trends
LEARNING OUTCOMES:
Identify the different
5 branches of accounting
including bookkeeping
6
Digest the basic
principles in accounting
Describe the meaning
1 of business
Pre-assessment Activity: Identify a company
and describe its operations (products/services
offered/location/years of existence)
What is
BUSINESS

7 Appreciate the history

of accounting
Gather information
8 regarding the trends in

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business and accounting

 Aspects of a
Business
The term “business”
means a systematized
Aspect 01 It is systematically established.
effort of persons to create
something and trade
A s p e the
ct 02 It provides goods or services.
same to earn a profit
which in the endAwill
spect 03 It earns profits.

satisfy the community

Aspect 04
or
It satisfies the customers
the society

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(Pride, W. M., et.al 2014)
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 Compare and contrast
2 types and forms of
Ty p e s o f B u s i n e s s
Organizations
business organizations

Service

a business that provides work

performed through the
expertise by individual or team
for the advantage of its
customers or clients.

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 Compare and contrast
2 types and forms of
Ty p e s o f B u s i n e s s
Organizations
business organizations

Merchandising

a business that acquires

finished goods and resells the
same to consumers.

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 Compare and contrast
2 types and forms of
Ty p e s o f B u s i n e s s
Organizations
business organizations

Manufacturing

an entity that converts raw

materials into finished goods
and sells them to consumers.

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 Compare and contrast
2 types and forms of
business organizations
Sole Proprietorship
1 the daily operations of the
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Forms of Business
Organizations
is an entity or business
organization that is owned by one
person. The owner manages,
controls and makes decision about
enterprise or business and perhaps
other matters.
Examples: Ana’s Sari-sari store,
Knitted Recipes, Lego Accounting
Firm, Danna’s Flower Shop, etc.
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 Compare and contrast
2 types and forms of
Forms of Business
Organizations
business organizations

another form of business Partnership

enterprise whereby at least two
or more persons agreed to
combine their businesses or 2
assets and are willing to share
or divide the profit between or
amongst them.

Examples: SGV, Navarro and

Ampher, Santos and Lucia Law

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firm, etc.
 Compare and contrast
2 types and forms of
Forms of Business
Organizations
business organizations
is a very complex form of business
Corporation organization. In the eyes of the law
it is considered a legal entity. An
entity that is distinct from its owners.
As a consequence, it enjoys the
3 right of succession, responsibilities
and other rights just like that of
individuals possess. It can be sued
and it can also sue entities or
individuals.

Examples: SMC, Aboitiz, Nestle, etc.

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 Digest the meaning of What is
3 accounting and why it is
called a language of
ACCOUNTING?
business ASC – Accounting Standards
Council
It is a service • Service Activity
activity.

The accounting • Quantitative

function is to Information
provide quantitative
information, • Financial in
primarily financial Nature
ASC in nature, about
economic entities,
• Economic
that is intended to be Entities
useful in making

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• Economic
economic decision.
Decision
 Digest the meaning of
3 accounting and why it is
called a language of
What is
business Accounting?
AICPA – American Institute of
Art of recording, Certified Public Accountants
classifying and • Recording Phase
summarizing in a
significant manner
and in terms of • Classifying
money, Phase
transactions and • Summarizing
AICP events which are in
A part at least of a Phase
financial character • Interpreting
and interpreting Phase

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the results thereof.

 Digest the meaning of
3 accounting and why it is
called a language of
What is
business Accounting?
AAA – American Accounting
Association
Process of
identifying, • Identifying
measuring and
communicating
economic • Measuring
information to
permit informed • Communicating
AAA
judgment and
decision by users
of the

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information.
 Digest the meaning of ACCOUNTING as the
3 accounting and why it is
called a language of
LANGUAGE of Business
business

Accounting has its own set of

terminology

A means of communicating
information about a business

difficult
Like any other language, it is
to understand unless you

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have studied it
 Categorize users of Users of Accounting
4 information and their Information
needs

Primary Users Other Users

Employees
Investors
Government
Lenders/Creditors
Public

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Management
 Categorize users of Accounting Information
4 information and their Needed by the Users
needs

• they are concerned with the risk

inherent in investing and the
returns.
Investors • assess the feasibility of making
investments in the company,
• they need to analyze before they
provide any financial resources to
the company.
• They need information such as
the sales, profit, return of
investments, stability and

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continuity of the company

 Categorize users of Accounting Information
4 information and their Needed by the Users
needs
• determine the credit worthiness
of the business.
• The credit terms and standards
are set on the basis of the
Lenders/ financial health of a business, so,
it helps them to analyze by using
Creditors the accurate information
accordingly.
• Creditors include suppliers and
lenders of finance, such as banks.
• They need information such as
the ability to pay of the company.

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 Categorize users of Accounting Information
4 information and their Needed by the Users
needs

• Employees use the accounting

information to find out the
Employees financial health, amount of sales
and profitability of business to
determine their job security, the
possibility of future
remuneration, retirement benefits
and employment opportunities.
• They need information such as
the stability and profitability of
the company.

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 Categorize users of Accounting Information
4 information and their Needed by the Users
needs

• The accounting information is

needed for them to ensure that it
Government is in accordance with the rules
and regulations and that it
protects the interests of the
stakeholders who rely on such
information.
• They need information to collect
taxes and other fees due to them.
(Taxable Income)

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 Categorize users of Accounting Information
4 information and their Needed by the Users
needs
• a source of education for students
of accounting and finance.
• a source of valuable data for
those researching on
Public organizational impacts on
individuals and economy as a
whole.
• a source of information for the
people looking for job
opportunities.
• a source of information about the
future of a particular enterprise.

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 Categorize users of Accounting Information
4 information and their Needed by the Users
needs
• develop long-term strategies and
set organizational goals. To make
projections and decisions.
• helps management monitor
Management costs, identify cost-saving
opportunities, and control
expenses.
• analyzes financial data to assess
the expected return on
investment (ROI) and make
informed choices.
• to meet legal obligations and

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maintain good corporate

governance.
THANK YOU