systematic process of measuring and reporting relevant financial information

expressed in monetary terms

accounting as art of recording,classifying and summarizing

accounting as a service activity; function to provide quantitative info

Four Aspects of Accounting

writing down of business transactions

sorting similar with three categories: assets liabilities and owners equity

preparing the financial statements

representing the quantitative and qualitative

Parties Interested in the Financial Information

provide financial resources to keep business

tax purposes and compliance with Securities and Exchange Commission(SEC)

to determine capacity of business to pay it’s obligations

organizational managers use financial information

provide information on company stability

3 types of business organizations

3 types of Business Operations

engaged in rendering of services

engaged in selling and buying

production of items to be sold

Fundamental Concepts

enterprise as separate

enterprise for specified time periods

accounting period classified into:

business will continue to operate indefinitely

Basic Principles

duly supported by verifiable evidence

must recorded at original acquisition cost

should be recognize at the time it is earned

affect the financial statements must be indicated

financial reporting is only concerned with information

uniformly employed from period to period