History-OF- Accounting PDF

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HISTORY OF ACCOUNTING  -

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PRIMITIVE ACCOUNTING Accounting has been traced since a long time ago. On 8,500 BC, the archeologist found a certain clay, tokens (such as cones, disks, spheres, and pellets) in Mesopotamia (Iraq) This tokens were often sealed with Clay Balls called BULLAE, which were be broken on the delivery so shipment could have checked against the invoice. BULLAE was the 1st Bills of Lading. MIDDLE AGES In 1494, the art of Systematic Bookkeeping appeared in Venice Where, FRA LUCA PACIOLI was called the Father of Accounting or Father of Double Entry System. He made. In 15th Century, BENEDETTO CONTRUGLI, made a book that provides the description of Recordkeeping.

DEFINITION OF ACCOUNTING 

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Is a system that measures business activities, processes that information into reports and communicated the results to the decision maker (LANGUAGE OF BUSINESS) ACCOUNTING STANDARD COUNCIL (ASC) o Accounting is a service activity. Its function is to provide quantitative information, primary financial in nature, about economic entities, that is intended to be useful in making economic decision. AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANT (AICPA) o Accounting 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 and interpreting the results thereof. AMERICAN ACCOUNTING ASSOCIATION (AAA) o Accounting is the process of Identifying, Measuring, and Communicating economic information to permit informed judgement and decision by the user of the information.

ACCOUNTANTS   

Storekeeper of the business The one who is recording business transactions and making financial statements. Role is to safeguard the assets of the business.

ACCOUNTING IN THE PHILIPPINES 

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Philippine Accountancy was recognized as a profession on MARCH 17, 1928, when ACT NO. 3105 was approved by the 6th Legislature. DON VICENTE FABELLA was the 1st Filipino CPA and founder of Jose Rizal University BELEN ENRILE – GUTIERREZ was the 1st Filipina CPA

PRIMARY USERS OF ACCOUNTING  -

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INTERNAL USERS they use accounting information in planning, directing and controlling business. This person who are within the business organization. o Managers o CEO, Pres, VP EXTERNAL USERS They use accounting information about the business to evaluate the business in different aspects. These persons are those outside the business organization. o Investors – uses accounting information to determine whether they should buy, hold or sell their investments. o Employees – uses accounting information about the stability and profitability of their employer. To be able to know if the company can still provide their salaries or benefits. o Lenders/Creditors – uses accounting information to determine whether the loans or debts will be paid when due. o Governments – uses accounting information in determining whether the company is complying with the standards and preparing/filing correct income tax return. o Customers – uses accounting information in order to determine the continuance of an enterprise, and to determine if the company can still supply the materials needed by customers o Public – uses accounting information to know about the trends and recent development in the prosperity of the enterprise and the range of its activities.

BRANCHES OF ACCOUNTING 

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PUBLIC ACCOUNTING – professional services rendered by the Certified Public Accountant and his employees to the public. PRIVATE ACCOUNTING - accounting services done in private enterprise. GOVERNMENT ACCOUNTING – concerned with the identification and proper allocation of national fund consistent with the provision of city, municipality, national law. FINANCIAL ACCOUNTING – focused on the preparation and presentation of financial statements for general user or EXTERNAL USERS. MANAGEMENT ACCOUNTING – focused on the preparation and presentation of financial statement for the use of MANAGEMENT or INTERNAL USERS. COST ACCOUNTING – deals with the collection, allocation and control of the cost of producing specific products and services. It also deals with the control of business expenses and pricing of business products. TAX ACCOUNTING – concerned with the preparation and filing of tax return and determination of compliance with the tax laws. AUDITING – is the independent examination of financial statements that ensures the fairness and reliability of the reports o INTERNAL AUDITING – deals with the review of existing accounting system and determination of compliance and examination of FS by the concerned employees. o EXTERNAL AUDITING – examination of financial statement and to give informed judgement by the external entity. ACCOUNTING EDUCATION – ACCOUNTING RESEARCH – gathering of information and data for the development of accounting professions.

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GOVERNMENT AGENCIES AND ACCOUNTING ORGANIZATIONS 

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CLASSIFICATIONS OF BUSINESS ORGANIZATION BUSINESS ORGANIZATION – any association that operates for commercial or for creating profits 

AS TO NATURE OF BUSINESS/ AS TO ACTIVITY/ AS TO INCOME o SERVICE BUSINESS  Primary source of income is by rendering services to the customers o MERCHANDISING/TRADING BUSINESS  Primary source of income is that the business buys goods/products

that are ready for sale and then sell it to customer (buy and sell). o MANUFACTURING BUSINESS  Primary source of income is that the business buys raw materials and then convert it into finished products. AS TO OWNERSHIP o SOLE PROPRIETORSHIP – ownership vested upon only one person called Proprietor/Owner o PARTNERSHIP – According to the Philippine Civil Code; ARTICLE 1767 By the contract of partnership, two or more person bind themselves to contribute money, property or industry into a common fund with the intention of dividing profits among themselves. Owners called Partners o CORPORATION – Corporation Code of the Philippines(Batas Pambansa bilang 68) – a juridical or artificial being or business owned by 5 or more person. The maximum life of a corporation is 50 years.  Incorporators – person who originally formed the corporations  Corporators/Stockholders/Shareh olders – person who buys shares or stock of a corporation.  Board of Directors – person who management of the affairs of the corporation.

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PROFESSIONAL REGULATION COMMISSION (PRC) o A government agency who administers the licensing of all professional in the Philippines and promulgates ethics and standards for different professionals BOARD OF ACCOUNTANCY (BOA) o Body under the PRC who administers the Licensure examination for Certified Public Accountant (CPA) FINANCIAL REPORTING STANDARDS COUNCIL (FRSC) o A body under the BOA who assist BOA in developing and promulgating GAAP in the Philippines. PHILIPPINE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANT (PICPA) o A private accounting association who monitors and improve the quality of professional service of CPA. It is the umbrella organization of all CPA....