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    FABM 1 - Quiz 1 Reviewer

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    FABM 1 - Quiz 1 Reviewer

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    schoolfilesnitina0977
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    FABM 1_ Quiz 1 Reviewer

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    6 views2 pages

    FABM 1 - Quiz 1 Reviewer

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    schoolfilesnitina0977

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    © All Rights Reserved
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    Introduction to Accounting most common form of which is the financial

    statements.
    Accounting - Financial Statements - summarization of infos
    - process of identifying, recording and
    communicating economic information that is useful - Communicating is done at the end of each
    in making economic decisions. accounting period.

    Elements of the Definition of Accounting Nature of Accounting


    1. Identifying - Accounting is a process with the basic purpose of
    - the accountant analyzes each business transaction providing information about economic activities
    and identifies whether the transaction is an intended to be useful in making economic decisions.
    “accountable event” or “non-accountable event”.
    Types of Information Provided by Accounting
    - Accountable Events - recorded in the books 1. Quantitative Information
    of accounts. 2. Qualitative Information
    - pinopost sa journal 3. Financial Information
    - business transaction on paper
    Functions of Accounting in Business
    Accounts Recievable - katunayan na may 1. To provide external users with information that is
    babayaran or may binayaran (under assets) useful in making investment and credit decisions

    Accounts Payable - babayaran mo ( under 2. To provide internal users with the information
    liabilities) that is useful in managing the business.

    - Non-accountable Events - not recorded in Brief history of accounting


    the books of accounts. - Accounting can be traced as far back as prehistoric
    times, perhaps more than 10,000 years ago.
    2. Recording -
    - Journalizing - the accountant recognizes (the - Archaeologists have found clay tokens as old as
    records) the “accountable events” he has identified. 8500 B.C. in Mesopotamia which were usually
    - writing all the accountable events cones, disks, spheres, and pellets.
    - These tokens correspond to commodities
    - Posting - the accountant classifies the effects of like sheep, clothing or bread.
    the event on the “accounts”. (after journalizing) - They were used in the Middle West to keep
    - classifies the effects of the events records.
    - After some time, this tokens were replaced
    3. Communicating - by the wet clay tablets.
    - the accountant summarizes the information - During this time, experts concluded this to
    processed in the accounting system in order to be the start of the art of writing.
    produce meaningful reports.
    - Double entry records first came out during 1340
    - Accounting information is communicated to A.D. in Genoa.
    interested users through accounting reports, the
    - In 1494, the first systematic record-keeping
    dealing with the “double entry recording system”
    was formulated by Fra Luca Pacioli – a Franciscan
    monk and mathematician. The “double entry
    recording system” was included in Pacioli’s book
    titled “Summa di Arithmetica Geometria
    Proportioni and Proportionista:” published on
    November 10 1494 in Venice.

    - The concept of “double entry recording” is being


    used to this day.
    - Fra Luca Pacioli is considered the father
    of modern accounting.

    Common Branches of Accounting

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