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53 Cards in this Set
- Front
- Back
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Financial Statements
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Reflect the financial standing and economic activities of the business. |
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What are the five components of Financial Statements? |
1. Statement of Financial Position 2. Income Statement 3. Statement of Changes in Equity 4. Statement of Cash Flows 5. Notes |
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Outputs of the accounting process. |
Financial Statements |
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Business Transactions |
Interactions between businesses and other stakeholders. |
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Statement of Financial Position also refers to what? |
Balance Sheet |
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Income Statement also refers to what? |
Financial Performance and Statement of Liabilities and Assets |
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What does AAA stand for? |
American Accounting Association |
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What does AICPA stand for? |
American Institute of Certified Public Accountants |
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What does ASC stand for? |
Accounting Standards Council |
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According to AAA, what is the definition of Accounting? |
The process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by users of the information. |
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According to the AICPA, what is the definition of Accounting? |
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. |
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According to the ASC, what is the definition of Accounting? |
A service activity with the function of providing quantitative information, primary financial in nature, about economic entities, that is intended to be useful in making economic decisions. |
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In nature, accounting is a process. What does this mean? |
It is a systematic series of actions directed towards a particular outcome. Performs specific actions and follows logical steps. |
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In nature, accounting is an art. What does this mean? |
It refers to the design of how something can be performed. A behavioral knowledge involving creativity, skill, and expertise. |
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In nature, accounting is a service activity. What does this mean? |
It is concerned with providing the service of ensuring that financial statements are made available to users. |
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In nature, accounting is an information system. What does this mean? |
It is a set of interrelated components that work together to achieve a common purpose. |
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In nature, accounting is a repository. What does this mean? |
It is a basin of financial information. |
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In nature, accounting is a means. What does this mean? |
While accountants give financial statements at the end of the accounting process, it is in the users hands to make decisions out of the information. |
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What is the Stewardship Function? |
The business should be transparent on its performance and standing to its stakeholders. |
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What are the three functions of Accounting in business? |
1. To fulfill the Stewardship Function of the management (owners) 2. To help interested users come up with informed decisions 3. To support daily operations of the business |
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Based on the three functions of Accounting, in can be said that Accounting is the __________ |
Language of Business |
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What is the main difference between Bookkeeping and Accounting? |
Accounting is broader and encompasses bookkeeping. Bookkeeping is just confined with the recording of monetary transactions (only one part of the accounting process). |
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Who is the Patron Saint of Accounting? |
Matthew, one of the 12 apostles. |
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Who are the two famous tax collectors mentioned in the New Testament? |
1. Matthew, one of the 12 apostles. 2. Zacchaeus, the one who climbed the sycamore tree to see Jesus. |
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Accounting is a ________ of history. |
Witness |
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Who introduced the Florentine approach to reporting? |
Amatino Manucci |
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Who introduced the Venetian approach to reporting? |
Andrea Bargarigo |
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What does the Florentine approach refer to now? |
Journal Entries |
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What does the Venetian approach refer to now? |
Ledger Postings |
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Who is the Father of Modern Accounting? |
Luca Pacioli, a mathematician and tutor. |
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What is Luca Pacioli's famous paper? |
Summa de Arithmetica, Geometria, Proportioni et Proportionalita |
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What does Summa de Arithmetica, Geometria, Proportioni et Proportionalita translate to? |
Everything About Arithmetic, Geometry, Proportion, and Proportionality |
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How many pages was Luca Pacioli's treatise on bookkeeping? |
24 |
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True or False: The objective of financial statements is to provide information about the financial position, financial performance, and cash flows of a business that is useful to specific users so that they can make sound decisions. |
False. (General Users) |
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The management or owners report on how well they run the business. What function of accounting does this primarily refer to? |
To fulfill the stewardship function of the management. |
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Pacioli mentioned that several merchants kept books of debits. What did they mean? |
"He owes." |
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Pacioli mentioned that several merchants kept books of credits. What did they mean? |
"He trusts." |
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With the records from Pacioli's study on merchants from Venice, Florence, and Milan, what were born? |
Primitive income and balance sheet statements. |
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When was Pacioli's famous paper published? |
November 1494 |
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When was the first income tax law in the Philippines enacted? |
1913 |
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When was the first Accountancy Law in the Philippines passed? |
1923 |
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What was the first Accountancy Law in the Philippines? |
Republic Act No. 3105 |
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What has the first Accountancy Law evolved to now? |
Republic Act No. 9298 |
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What happened in 1400? |
The Italian trading period saw sophisticated accounting systems developed in banking houses.
Double-entry bookkeeping was discovered. |
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Pacioli became the tutor of who? |
The three sons of the rich merchant, Antonio de Rompiasi. |
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What is environmental scanning? |
The ability to turn a need into an opportunity to undertake a business. |
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True or False: Accounting is only applicable to businesses rendering services because accounting is a service activity. |
False. (It could also pertain to services rendering manufactured goods or resold products) |
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The oldest double-entry books were entitled ___________ |
Massari (Treasure Officials) Ledgers of Commune of Genoa |
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When were the Massari Ledgers of Commune of Genoa written? |
1340 |
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The Massari Ledgers of Commune of Genoa is simplified in modern day as __________ and ___________ |
T-account and Ledger |
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When were early books from the commune of Genoa which displayed an early form of bookkeeping found? |
1327 |
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What was Pacioli's 24-page treatise on bookkeeping called? |
Particularis de Computis et Scripturiz |
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What does Particularis de Computis et Scripturiz translate to in English? |
Details on Calculation and Recording |
