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This document outlines the fundamentals of financial accounting and its significance in business, including the evolution of accounting practices and the impact of ASEAN on accountancy in the region. It covers essential concepts such as accounting definitions, principles, the importance of ethics, and career opportunities for accountants. Additionally, it discusses the historical development of accounting and the establishment of ASEAN, highlighting its goals and frameworks for economic integration and professional recognition.
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0% found this document useful (0 votes)
29 views19 pagesBFAR
This document outlines the fundamentals of financial accounting and its significance in business, including the evolution of accounting practices and the impact of ASEAN on accountancy in the region. It covers essential concepts such as accounting definitions, principles, the importance of ethics, and career opportunities for accountants. Additionally, it discusses the historical development of accounting and the establishment of ASEAN, highlighting its goals and frameworks for economic integration and professional recognition.
Uploaded by
luxphireCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
/ 19
Basic Financial Accounting & Reporting
Accounting and Its Environment
Learning Objectives:
After studying this chapter, you should be able to:
1, Define accounting and explain its role in business.
2. Have a fair knowledge of the evolution of accounting and find how it
affected accounting pedagogy, policy and practice.
3. Discuss the basics of ASEAN and recognize how it will affect accountancy
practice in the region.
4, Describe the fundamental business model and find how it is applied to the
various types of businesses.
5. Distinguish between the different forms and activities of business
organizations.
6. Explain the importance of the purpose and phases of accounting.
7. Ascertain the need to adapt Fra Luca Paciol’s system for the modern times,
8. Explain the fundamental accounting concepts and principles.
9. Understand the income tax of entities per TRAIN Law and CREATE Act.
10. Summarize the salient features of the Accountancy Act of 2004, the Core
Competencies Framework and the Code of Ethics for Professional
‘Accountants and harness them to attain professional advancement.
11. Explain why ethics are crucial in accounting
12. Identify and discuss the career opportunities open to accountants,
Dennis Rodman, a retired NBA player, is born in Dallas, USA and deserted by his father (who is
incidentally residing here in the Philippines) at age three. His mother, Shirley, raised Rodman in a
housing project. At 20, he was working as a janitor at the Dallas Airport for $5.0 an hour, but 3
year later he was arrested there for stealing fifty watches; the charges were dropped when the
‘authorities were able to recover the goods. Rodman had given them to friends.
‘Then, when he was 21, a local junior college basketball scout suggested that Rodman, who had
grown a good half-foot since high school, to try basketball, He tried and falled at first try but on.
second try at Southeastern Oklahoma State, he made All-American an. the grades required to
stay in school. Rodman was 25—ancient for a rookie—when he finally landed in the National
Basketball Association (NBA),
Though Rodman proved his talent as a pivotal member of the two-time champion Detroit
Pistons, it tok him along time to catch up in the salary game. He has long been one of the ton by Prof WIN Ballads
2 | scion ecurting on Reporting 2023
ers, rabing an average of 15 boards 3 G37, BUT Unt 1997,
lesa’ bes rebound 5 here
eee tore than $25 malin nasil eo
co 2 dy of (tat tine he’ paying for the San Antonis
Tis tchen pondering is nancial woes with Marley. Maney i yl
ree acc wech ics oaelt l
Th gett S240 Fern pve
tend andar Ss acnrg. Ard to make mates worse,» halfilion aoe ey
ssc pra hane ers ears Pad gone unpaid for et ee
ret Thre re stil eter dues Alto geg?
edt $745 000 eluting re
cnin de. Turnr 0s ed, he i iy, I Ned you tame
ine up Rodman in autograph Sessions for $50 per signature
anted to ae a
Mare’ fist move was
tegotited wit Romans creo tellng ther
redo be placed by Maley on $1,000 weeky allowance. He exchanged
American Epes cad fora debt card nthe mist of Roi's Finacial makeover sat
ety ek Rosman was ded to the Chicago al te was
Marte convned Resin tat playing with Michal Jordan and Scotle Papen ws the be
fess
‘the 996 NBA seeson, Rian had Olin in the bank, a chunk fit from te
us he ened for ping the Bul make thei way to the NBA Championship He
52.0 milion bythe ed ofthe year. ls, he now has a sizable investman
ling incest in $10 millon in sas excavaton
In Ostley—maker ofthe sungases he wears “every damn day"
tn 997, zr the Chg res ran ned an $0 millon deal wth he Bul. He
hasexdonement dels wth Kaa, ores and Cas among ater, Hedi oe we
‘en amare in predcton and mre spt than he ch
{20 fonevances in MTV andinwesting.Romenicepodes wth Madonna, Carmen Eee
naar celebrities. Radman, who spends $100 to change his hair fram blue to orange to white
now of he NB rca earlier he's cme very
he ns bcos of gs tet cup Acad th staat
Famous Money Book By Cosy endothe roar, a
st ena kerennren er,
endorsement deals. Manley needed and relied on accounting
irropucTioN
‘Accounting has evolved, as Inthe case of medicine and law, In response tothe sci
and economic needs of society. As business and society Become more complex,
ing develops new concepts and twehnigues to mest the ever nereaing Needs
for financial information. without seh information, many complex economic
Sevelopments and social programs may nevar have been undertaken,
In & market economy, information helps decision-makers make informed choices
to make wel-informed decisions, resources ate allocted in a way that better
‘meets the needs and goal of those within the market.
‘Accounting i relevant in all walks of Ife, anit is absolutely essential inthe word of
business. Accounting isthe system that measures business activites, processes that
Information into reports and communicates the results to decision-makers. Accounting
reason, accounting elle the language
of business. The task of leering accountng i very similar tothe task of learning a new
language; thus, the need fortis book which teaches the Basics of Accounting in a very
conceptual manner
"No business could operate very long without knowing how much it wes earning and how
much it wat spending. Accounting provides the business with thse information and
scorekeepers of business
‘more. So, accountants canbe called
2 business count function optimal
“whether is making 2 profit of not, ane
sound understanding ofthis language bout 2 etter management of the
ning, education expenses, car
financial aspects of
amortization, business. loa taxes and investments are based oy the
Information syster hat we call accounting.
DEFINITIONS OF ACCOUNTING
Statements of Business Enterprises"
formation system that measures, processes and communicates
ent of Fnancal Accounting Concepts
erprses" (Norwalk, Cann Financial EVOLUTION OF ACCOUNTING
the ort of recording, classifying and summar
oney, transactions and events which at
interreting the results thereof (Amer
Review and Resume", Accounting Terminology Bu
Boor, Statement No
les UndeivingFinancal Statements of Bune
0)
‘Accounting history is important to acountng pedagogy, polly and practice. tt makes
better understand our present and to forecast our future, Accounting
he “study ofthe evolution in account
thought, practices and
titutlons
response to changes inthe environment and societal needs. I also considers the eet
that ths evolution has worked on the e
Primitive Accounting
ct, were the
the tokens. Some experts conser the stage of ecrd eeping the Beh
‘api along the rade routes an took old trough
which 3
ast keep records. The tokens were often sealed inlay
ich were broken on delivery se the shipment could be checked against
: ions mlntsined various types of ecards of
Daring the 1" dynasty of Babylon (2286-2242 8
Impressed on wet
the Commit, ecunting Reve, supplement to VY
Accounting ends Enivonment | 5
ee
ng on of our eldest hls. The east colections of undestandble wring
tack how many bushel of gain came int the kin’ warehoe, Tablets recorded ho
uc) the King tock shir share. Even nthe ety dvs, tax
seven peconon othe emergence ct
systematic bootacepng
The Art of Writing, see boolheesng reco
Iechaical rpect of tookeepirg cont ofa seauerc of sng
aeons) sine there would be mous to take ary record whatever
Te nc Emre, which spanned the west cost of South Amerie throughout the 2° 8
centuries, sed noted corso ferent lense and oor cled qui fo esp accountng
Development of tt te merchant and
Doubler bookteeping is at a elicvery of sin
to meat the chagiogneesses of Vode Garman
The Decline of the West (124) tat the Ineenzan of dvole-etry BookKeeDg Was the
ecive event in European economic sory
ine Approach
ance lorena markets were a fst
sof ltertine socal. Tother, ding busiest 3d
2s conducted on ogi ends ut
‘as wel 34 emotional. AEcount books were not
ffendeip in an was ‘Accounting ands Emronrent | 7
ton develope in conan
the reign of Lo
bookteepng provisions
idea, nd beyond.
“To Napeloonc Coe o Cade Napoléon the French
comm r
£8 | bos rman Accounting ond Reporting 202 ton by Prof WN Balad
(8 Bei Ranch Ace a,
Industial Revolution, Corporate Organization, allroad, United States Steel
dates fom antiguity but the formation of an scouting
i of» medarn nd olen Brain
sacs erarged soul, bu by the early deca of
reflecting
Dofesson was cll ed tote
{8 century, The neo for aco
the 29 cenurya fry of textbooks and handbooks on accounting had app
theimpat
“he revolution, which acured i England fom the mid to the mi 19 century,
change the method of preducing commercl goods fom the handeaft method tothe
factory system. ith ths charge cama the problem of costing for 9 large volime of
products. The specialized Tels of cost accounting emerged to meet ths need forthe
Daly of vaous costs.
‘Te caponded business operations inated by the lndatiol Revolution. reuied
Increasingly lage aunt of unde to build factories and purchase machinery.” Ths need
resuted to the development of the corporate frm of organization, The: growth of
spurred the development of accounting. Corporate owners, the shareholders,
ess. Managershad to create accounting systems
sate 28 the 1830s. Men then
not ony made simple accounts Bata ou
encaged in ace
Ralroods, heavy wer
ive. balance
capaaty and needed to be replaced
Desert 2 financial reporting problem snc It was never ecar when the weet an
took pace Ao, hares the problem of matehing a revenues and expense.
jgement to caunterfuctustions in pr
erection charges were made. Bod Years sno provision ar an ind
Conn 12,1903,
75% ofthe US
‘Accounting ond ts Evironment | 9
—_ EEE
tn the eaty 18205, Professor Schmaenbach was fistrated
‘a the put
the foundation forall subsequent developments It arm
Wah th book, he
‘iso Became the Sais for eoesponding efforts in other
accounting In Germany
Sehmalenach csi that important information could be ied rom 3 fens acount.
“The resus of on’ fim shoud show tiveugh-lows move well than balanars. What he
lary prepare ae pesnted, $9
and interna efflencles could be gauged. necfim comparisons
witoling asthe oly way to eallect om igh tat cates to fund Word Wi
| Phitosine! Bureau of Internal Revenue (BR) was created though the posaee of
ation Act No 189 dated Jy 2, 2904, On August 2 2504, the GR wae formally
‘orgnied and made operational unde the Secretary of Finance.
| Financial accounting Ie consenave and Xs aout matching sfots and resus. Tax
coun, in um, abou improving the amount an timing of co 10 | nove nancial Accounting and hepating 2023 ton by Prof. Batada
2 Bes nance cet ee a,
ston wrote Vilcale for the Apple U, the
portant business sppeavon for the pes
fecent years, Task thor are Ume-