1. Accounting Overview John V. Balanquit johnthecpa.wikispaces.com

2. Objectives Student will be able to discuss: • The history of accounting • Accounting systems • The forms of business organization • The nature of business operations

3. Objectives Student will be able to : • Define accounting • Summarize the accounting process • Explain the needs of each user of financial information • Define and identify FS elements

4. History of Accounting Primitive Accounting • Bullae • Code of Hammurabi • Scribe

5. History of Accounting Middle Ages • Fra Luca Pacioli • Father of Accounting

6. History of Accounting Information Age (Modern) • Globalization • The world is becoming a small community due to the advancement of technology

7. Accounting Systems Manual Accounting System • A system that uses pen and paper only or any substitute to pen and paper

8. Accounting Systems Mechanical Accounting System • A system that uses simple computing machines in addition to pen and paper

9. Accounting Systems Electro-mechanical Accounting System • A system that uses advanced computing machines in addition to pen and paper

10. Accounting Systems Electronic Data Processing (EDP) System • A system that uses networks of computers and the internet in processing information • Still uses pen and paper

11. Forms of Business Organization • Sole proprietorship • Partnership • Corporation • Cooperative

12. Nature of Business Operation • Service • Merchandising • Manufacturing • Agri-business • Hybrid

13. Let’s have a one minute break so that we can absorb the concepts of the previous topic.

14. Definition of Accounting It is a service function which involves the processes of identifying, recording, summarizing and interpreting financial information relevant in decision-making.

15. Definition of Accounting • It is a science because it follows a process and it involves critical thinking • It is an art because it involves judgment and creative thinking • It is the language of the business

16. Accounting Process 1. Identifying

17. Accounting Process 2. Recording Journalizing Classifying (Posting)

18. Accounting Process 3. Summarizing Trial Balance Worksheet Financial Statement

19. Accounting Process 4. Interpreting Ratio Analysis Trend Analysis Benchmarking Horizontal and Vertical Analysis

20. Users of Financial Information • Owners/ Investors • Suppliers/ Trade Creditors • Lenders/ Other Creditors • Employees

21. Users of Financial Information • Customers • Government • Public

22. Elements of Financial Statements • Assets • Liabilities • Equity

23. Elements of Financial Statements • Income • Revenue • Gain • Expense • Expense • Loss

24. End of Lecture Thank You!

25. Quick Check 1. What purpose does the bullae serve during the primitive times?

26. Quick Check 2. What specific rule does the code of Hammurabi say regarding business transactions?

27. Quick Check 3. What is the contribution of Fra Luca Pacioli to accounting?

28. Quick Check 4. Provide the types of businesses according to ownership.

29. Quick Check 5. Provide the types of businesses according to nature of operations.

30. Quick Check 6. Provide the various accounting systems

31. Quick Check 7. Provide the processes of accounting.

32. Quick Check 8. Define the needs of the different users of financial information.

33. Quick Check 9. Enumerate the elements of financial statements.

34. Assignment 1 Whole Yellow Paper 15 Points • Provide the technical definition of the financial statement elements based on the Conceptual Framework for Financial Reporting. • Indicate your reference

35. Seat Work Answer the following questions by groups of 3. • Provide two instances where an EDP system is not appropriate in a business. • Why is it important for businesses to maintain pen and paper (Printed) reports?