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26 Cards in this Set
- Front
- Back
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Is a process of identifying recording and communicating economic information that useful in making economic decision |
Accounting |
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3 essential elements of definition of accounting |
1.Identifying 2. recording 3.communicating |
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The accounting analyze each business transaction and identifies whether the transaction is an accountable even or non accountable even |
Identifying |
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Are recorded in the books of accounts |
Accountable events |
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Are not recorded in books of accounts |
Non accountable events |
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(Or 'economic events') are those that affect the asset, liabilities ,equity, income and expenses of a business sociological and psychological matters are outside the scope of accounting. |
Accountable events |
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The accountant recognize (i.e., records) the " accountable events" he has identified. this process is called journalism |
Recording |
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After journalizing the accountant then classifies the effects of the even on the "account" this process is called |
Postpaid |
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Is the base is a storage of information in accounting e.g., cash land. sales. and etc |
Account |
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At the end of each accounting period the accountant summarize the information received in the accounting system in order to produce meaningful reports. This is important because information processed in the accounting system is useless unless it is communicated to the users |
Communicating |
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Is communicated to interested users through accounting reports and the most common from which is the financial statement |
Accounting information |
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Accounting is a process with the basic purpose of providing information about economic activities intended to be useful in making economic decision |
Nature of accounting |
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Types of information provided by accounting |
1) Quantitative information 2) Qualitative information 3) Financial information |
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Information expressed in number quantities or units |
Quantitative information |
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Information expressed in words or descriptive form. this information is found in the notes to financial statements as well as on the face of others component of financial statement |
Qualitative information |
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Information express in money |
Financial information |
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______It is also quantitative information because monetary amounts are normally expressed in number |
Financial information |
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Accounting as science and art |
Social science Practical art |
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Accounting is a body of knowledge which has bean systematically gathered classified and organized |
As a social science |
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Accounting requires the use of creative skills and judgment |
As a practical art |
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Is the accounting report that are communicated to user |
Output |
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Accounting system the ____ accountable events in the process of recording classifying and summarizing |
Input |
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The inputs are the accountable events; the processes are recording classifying and summarizing and the output is the accounting report that is communicated to the users |
Accounting system |
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Although ______function is a part of accounting .. |
Bookkeeping |
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Refers to process of recording the accounts or transaction of an entity. normally ends with the preparation of the trial balance.. unlike accounting bookkeeping does not require the interpretation of significance of the information processed |
Bookkeeping |
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is considered the language of business because is essential in the communication of financial information |
Accounting |
