Accounting 9 Introduction of Acc.

ACCOUNTING 9
Prepared By:
Ms. Joselle L. Cueto
2
PAIR ACTIVITY: LET ME WRITE

YOU!
• On a piece of paper write words
that is related to ACCOUNTING,
the student who got the more
words will have an additional 5
points on the first quiz.
INTRODUCTION
TO
ACCOUNTING
4
OBJECTIVES
At the end of the lesson students are expected to:

1. define accounting;
2. describe the nature of accounting;
3. explain the functions of accounting in business;
4. narrate the history/ origin of accounting.
IS ACCOUNTING
IMPORTANT TO
YOU/US?
6
ACCOUNTING
• Accounting is a system that provides
quantitative information about finances and
preparing the financial reports of an entity.
• It is the art of recording, classifying and
summarizing in a significant manner and in
terms of money, transactions and events which
are, in part at least of financial character,
interpreting the results thereof.
7
FINANCIAL STATEMENTS(FS)
-are one of the most important documents in starting
your own business.
-are the outputs of the accounting process
-it helps the STEWARD FUNCTION of the owners and
managers.
Means that the business should be transparent on the

performance and standing of the business to its
stakeholders.
OBJECTIVES OF FINANCIAL 8
STATEMENTS
- Provide information about the financial position,
financial performance, and cash flows of a business that is
useful to key personalities who are making economic
decisions.
- To meet this objective, financial statements (FS) provide
information about a business’ ASSETS, LIABILITIES,
EQUITY, INCOME, EXPENSE, contributions to owner in
their capacity as owners in their capacity as owners AND
CAH FLOWS
TERMS RELATED TO ACCOUNTING
9
ASSETS
10
ASSETS
• An asset is a resource with economic value that an individual, a
company, or a country owns or controls with the expectation
that it will provide a future benefit.
EXAMPLE:
Personal assets can include a home, land, financial securities,
jewelry, artwork, gold and silver, or your checking account.
Business assets can include such things as motor vehicles,
buildings, machinery, equipment, cash, and accounts receivable, as
well as intangibles like patents and copyrights.
11
LIABILITIES
12
LIABILITIES
• Liabilities are debts or obligations a person or company owes to
someone else.
EXAMPLE:
Loans, tax obligations, and accounts payable.
13
EQUITY
14
EQUITY
• The equity meaning in accounting could also refer to its market
value. This is based on current share prices, or a value
determined by the company’s investors. With this secondary
meaning, it’s usually called shareholders’ equity or net worth. If
all of the company’s assets are liquidated and debts paid off, the
shareholders’ equity represents the amount of money remaining
that would be distributed to the business shareholders.
15
INCOME
16
INCOME
• Accounting income is the money that an individual or
organisation receives in return for their services or goods.
Income can have a variety of definitions, which often depend on
the specific context. That context may change depending on
economic analysis, financial accounting, or taxation.
EXAMPLES:
Form of wages and salaries, the return on their investments,
pension distributions, and other receipts.
17
EXPENSE
18
EXPENSE
• refers to any cost that contributes to a

company's overall cost of doing business.
That is, any costs incurred as a result of a
company's attempted or successful revenue
production. Expenses may include cash, cash
equivalents, and depreciation.
19
CASH FLOW
20
CASH FLOW
• Refers to the money that goes in and out of a

business. Businesses take in money from sales as
revenues (inflow) and spend money on expenses
(outflow). They may also receive income from
interest, investments, royalties, and licensing
agreements and sell products on credit.
21
ACCOUNTING IS THE PROCESS OF

IDENTIFYING, RECORDING, AND
COMMUNICATING EVENTS OF AN
ORGANIZATION TO INTERESTED USERS.
22
IDENTIFYING
• This involves selecting economic events that

are relevant to a particular business
transaction.
23
TRANSACTION
• Is an agreement between a buyer and a seller to
exchange goods, services or financial instrument.
EXAMPLES:
-sales of bread and other bakery product.
-purchases of flour that will be used for baking.
-purchases of trucks needed to deliver the product.
24
RECORDING
• This involves keeping a chronological diary of

events that are measured in pesos. The diary
referred to in the definition are the journals
and ledgers which will be discussed in the
future chapters.
25
COMMUNICATING
• Occurs through the preparations

and distribution of financial and
other accounting reports.
COMPLETE SET OF FINANCIAL 26
STATEMENTS(FS)- (IN ORDER/ BY STEP)
1. Income statement- An income statement is a financial report detailing a
company's income and expenses over a reporting period
2. Statements of changes in Equity- the reconciliation between the
opening balance and closing balance of shareholder's equity.
3. Statements of Financial Position(aka before Balance Sheet)-serves
as a snapshot, providing the most comprehensive picture of an
organization's financial situation. It reports on an organization's assets
(what is owned) and liabilities (what is owed).
4. Statements of cash flow-is a financial statement that provides
aggregate data regarding all cash inflows that a company receives from its
ongoing operations and external investment sources. It also includes all
cash outflows that pay for business activities and investments during a
given period.
5. Notes to Financial Statements-disclose the detailed assumptions made
by accountants when preparing a company's: income statement, balance
sheet, statement of changes of financial position or statement of retained
earnings.
27
THE NATURE/ FEATURES OF

ACCOUNTING
Accounting is a systematic recording of financial

transactions and the presentation of the related
information to appropriate persons.
28
BASIC FEATURES/ NATURES

OF ACCOUNTING
- Accounting is a service activity.

- Accounting is a process.
- Accounting is both an art and
discipline.
- Accounting deals with financial
information and transactions.
- Accounting is an information system.
29
3 FUNCTIONS OF
ACCOUNTING IN BUSINESS
1 To fulfil the STEWARDSHIP

FUNCTION of the management(or
owner).
2. To help interested users come up with
informed decisions.
3. To support daily operations of the
business.
30
ANY QUESTION?
THANK
YOU!

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ACCOUNTING 9

PAIR ACTIVITY: LET ME WRITE

At the end of the lesson students are expected to:

Means that the business should be transparent on the

• refers to any cost that contributes to a

• Refers to the money that goes in and out of a

ACCOUNTING IS THE PROCESS OF

• This involves selecting economic events that

• This involves keeping a chronological diary of

• Occurs through the preparations

THE NATURE/ FEATURES OF

Accounting is a systematic recording of financial

BASIC FEATURES/ NATURES

- Accounting is a service activity.

1 To fulfil the STEWARDSHIP

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