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INTRODUCTION
LEARNING OUTCOME
a. Business Entity
b. Going Concern
c. Monetary
d. Accounting Period
e. Matching
f. Historical Cost
g. Double Entry
h. Full Disclosure
i. Conservatism
j. Objectivity
Classifying
Bookkeeping Recording
Summarizing Accounting
Analysing
Interpreting
Bookkeeping Accounting
Bookkeeping is the initial step Involve all steps in accounting process.
in the accounting process.
Is a basic process involved Covering a wide field of bookkeeping.
debit and credit.
Bookkeeping is the process of Accounting is the process of
classifying, recording and classifying, recording and summarizing
summarizing business business transactions in monetary units
transactions and interpreting the financial data of
a business in order to assist
stakeholders in making decisions.
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PRINCIPLES OF ACCOUNTING FOR TOURISM & HOSPITALITY
CHAPTER 1_INTRODUCTION
1.Source
documen
t
2.Books
8.Financial of prime
Reports entry
3.Ledger
7.Financial s
Statements
4.Trial
6.Adjuste
Balanc
d Trial
e
Balance
5.Adjustment
b. Business owners
Owners contribute capital in the business and thus,
are exposed to maximum risk. Naturally, they are
interested in knowing the profit earned or loss
suffered by the business besides the safety of their
capital. The financial statements give the
information about profit or loss and financial position
of the business.
c. Current investors
Current investors need financial information about
the business’s liquidity position and finances, the
business’s prospects and ability to generate profit
and the ability of the management to handle the
business.
b. Employee unions
Employee union uses financial information to ensure
that their demands to the employer such as salary
increments and other benefits are reasonable
compared with the company’s financial ability.
c. Suppliers
Financial information enables suppliers to evaluate
the company’s ability to pay its debts.
d. Government
Government bodies for example the Lembaga Hasil
Dalam Negeri (LHDN) refers to accounting
statements and financial reports in order to
determine the amount of tax to be paid.
e. Creditors
For determining the credit worthiness of the
organization. Creditors according to the assessment
of their customers’ financial health set terms of
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PRINCIPLES OF ACCOUNTING FOR TOURISM & HOSPITALITY
CHAPTER 1_INTRODUCTION
g. Public
They want to see the business running since it makes
substantial contribution to the economy in many
ways, e.g., employment of people, patronage to
suppliers, etc. Thus, financial accounting provides
useful financial information to various user groups for
decision-making.
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PRINCIPLES OF ACCOUNTING FOR TOURISM & HOSPITALITY
CHAPTER 1_INTRODUCTION
INTRODUCTION
Accounting Cycle
1.Source
document
8.Financial 2.Books of
Reports prime entry
7.Financial 3.Ledgers
Statements
4.Trial
6.Adjusted Balance
Trial Balance
5.Adjustment
Internal users
Management
Business Owners
Current Investor
External users
Bank / Financial
Institution
Employee Union
Suppliers 7
Government
PRINCIPLES OF ACCOUNTING FOR TOURISM & HOSPITALITY
CHAPTER 1_INTRODUCTION – QUESTION REVIEW
Across Down
3. Users of financial information are informed of 1. all transactions are recorded at their
any facts necessary for the proper original cost
interpretation of the statements 2. a stable currency is used as a unit of
5. a business should generally use the same measure.
accounting methods from one period to the 4. to report the expenses incurred in the
next. same period as of the revenue is actually
7. This concept assumes that the business will earned because of these expenses.
continue to operate indefinitely 6. caution is used by recording losses when
8. Basic of an accounting recording system. It expected but gains when certain
must have debit and credit for every
transaction.
9. is the process of classifying, recording and
summarizing business transaction.
10. is each transaction must be recorded
based on objective evidence or verified and
unbiased information.
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PRINCIPLES OF ACCOUNTING FOR TOURISM & HOSPITALITY
CHAPTER 1_INTRODUCTION – QUESTION REVIEW
1. ______________________
1.Source
document
2. ______________________
2.
8.
3. ______________________
4. ______________________
3
7. 5. ______________________
6. ______________________
4.
6.
7. ______________________
5. 8. ______________________
i- ___________________
ii- __________________
iii- _____________________
iv- ___________________
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PRINCIPLES OF ACCOUNTING FOR TOURISM & HOSPITALITY
CHAPTER 1_INTRODUCTION – QUESTION REVIEW
a a
b b
C c
Activity
One day you have visited your friend Merlina who runs a grocery shop and casually
talked about the accounts he maintains of his business unit. You were surprised to
note that he did not maintain accounts. Enquire from other businesspersons you
know about their accounting records and about the uses and purposes of
accounting. Explain them to your friend Merlina to motivate her to maintain
accounts of his business unit.
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PRINCIPLES OF ACCOUNTING FOR TOURISM & HOSPITALITY
CHAPTER 1_INTRODUCTION – END OF CHAPTER 1
END OF CHAPTER 1
INTRODUCTION TO ACCOUNTING
Question 1:
Define bookeeping and accounting.
Solution:
Bookeeping______________________________________________________________________
__________________________________________________________________________________
_________________________________________________________________________________
Accounting_______________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Question 2:
Based on the situation in the box, explain the accounting concept that applied and
reason.
Situation 1:
If Jimmy Jones started a clothing retail store by investing RM 20, 000 cash into a
bank account in the business name and bringing in RM 8000 in value of clothing
inventories for resale, this is viewed as involving both the business Jones’ Clothing
Store and Jimmy Jones personally. The business now has RM 20 000 cash and RM
8000 in value of inventories that it now owns. An amount of RM 28 000 is owed by
the business to Jimmy Jones in a special account called ‘Capital’ (part of Equity)
which comprises the difference between the assets and liabilities of the business.
__________________________________________________________________________________
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PRINCIPLES OF ACCOUNTING FOR TOURISM & HOSPITALITY
CHAPTER 1_INTRODUCTION – END OF CHAPTER 1
Situation 2:
Accountants might recognize losses but not gains in certain situations. For example,
the company might write-down the cost of inventory, but will not write-up the cost
of inventory.
__________________________________________________________________________________
Situation 3:
1. An asset with a cost of RM 120000 is depreciated over its useful life of 10 years rather
than expensing the entire amount when it is purchased.
__________________________________________________________________________________
Question 3:
Identify the accurate date for the following accounting periods:
Duration Starting Date Closing Date
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