Anything that has to do with commerce, producing, trading, dealing of goods and services. Primary motive is PROFIT.

Provides for the satisfaction of peoples needs an wants Creates jobs Provides for the government funds thru taxes Helps the government for economic development

When the owner gets back his initial capital Return of Capital When the owner gets more than what he invested Return on Capital

Through

ACCOUNTING.

The language of business. A service activity that analyzes, measures, summarizes , reports and interprets economic activity of a business whose

primary function is to provide basis for decision making.

Financial Reports/Financial Statements/ Financial Information/Accounting Information/ Accounting Reports: INCOME STATEMENT CAPITAL STATEMENT/STOCKHOLDERS EQUITY BALANCE SHEET CASH FLOW STATEMENT


1.

2.

Person/s interested in the business. Internal Owner/s, Manager, Employees External Government, Creditors, Suppliers, Customers

1.
2. 3.

4.
5.

Sole Proprietorship - focus for Prinac 1 Partnership Corporation Cooperatives Not-for-profit Organizations

1.
2. 3.

4.

Service focus for Prinac 1 Merchandising/Trading Manufacturing Hybrid/Combination

Effective communication Skills Interpersonal Skills Intellectual Skills creative & critical thinking analytical thinker problem solver decision-maker

Understandability Relevance Materiality Reliability Faithful representation Neutrality Comparability Consistency Substance over form

Broad laws or rules adopted as guides in identifying, measuring and reporting financial information. Pronounced by PICPA through its Accounting Standards Council called Financial Reporting Standards Council.

1. 2. 3. 4. 5. 6. 7. 8.

9.

Cost concept Business entity concept Going concern concept Reporting period Objectivity concept Disclosure concept Unit of Measure Prudence Accrual

Shows the result of business operation for a given period of time. Contains Revenues/Income and Expenses. Single step form for service business. Functional form for merchandising and manufacturing business.

REVENUES are income earned by the business by rendering service, whether cash is received or not. Service Income, Tuition Fee, Agency Fee EXPENSES are costs incurred necessary in generating income, whether cash is paid or not. Rent Expense, salaries exp., utilities exp.

Revenues : Agency Fee/Income Expenses: Rent Expense Salaries Expense Utilities Expense Documentations Exp. Transportation Exp. Total Net Income

P300,000 P50,000 70,000 30,000 20,000 5,000 175,000 P125,000

Shows movements in the Capital Account for a given period of time. Beginning Capital, Net income or loss, Additional investment and Drawings/Personal Capital or Owners Equity is the interest or claim of the owner over the business after creditors have been paid. Partners Equity for Partnership Stockholders Equity for Corporation

Gonzales, Capital 1/1 Net Income Gonzales, Drawing Gonzales, Capital 12/31

P 600,000 125,000 ( 50,000) P 675,000

Shows the financial position or condition of the business as of a particular cut-off date. Contains ASSETS, LIABILITIES AND OWNNERS EQUITY Maybe Account format or Report format