Beruflich Dokumente
Kultur Dokumente
Learning objectives:
At the end of this chapter, students should be able to:
Give definition, history and development of
accounting
Know the functions, objectives and uses of the
financial statements
know the main user groups of financial statement
Know the types of business
differentiate between bookkeeping and accounting
Definition
Accounting: as the art of recording, classifying and
summarizing of business transaction and interpreting
the results.
Recording – where transactions are recorded in the
books of the business
Classifying – which involves sorting out the mass of
accounting data into orderly & meaningful categories
Summarizing – where periodically the accounting data
are summarized.
Interpreting – where the financial data are analyzed &
used to assist in more effective decision making.
History & development
1) 7,000 years ago
- which are early civilization of Egypt, Babylon, Greece and
Rome.
2) 15th century (renaissance period)
- bookkeeping was introduced & 1st published work on
double-entry bookkeeping was produced by Luca Pacioli in
1494.
3) Modern & present
- Rapid technological advances led to formation of
companies, and result to the rise of more specialized
aspects of bookkeeping & accounting.
Existing laws were required a detailed financial statement to
presented to shareholders.
Function & objectives of financial
statement
Manager must be able to supervise others, who are
collecting, recording and summarizing accounting
data.
For decision making because it tells where, when,
how and why money has been spend
To evaluate performance of the company @ choose
project
To ensure the smooth-running of all organizations.
Users & Uses of Accounting
Information
*To evaluate the *To evaluate the *To determine the
firm’s ability to pay taxable income of
financial status *To determine the wages &other
of the biz. the biz.
firm’s ability to benefits.
*To evaluate their *To make better
repay loans *To get an idea of
Interest in the biz. their employment financial decisions
prospects. for the co.
Advantages Disadvantages
1. Low cost 1. Unlimited liability
2. Ease of formation 2. Limited life of organization
3. Difficulty of transferring
ownership
4. Difficulty of raising large
amounts of capital
3) Companies
Have many owners called shareholders or
stockholders
Companies Act 2016
Two type of companies:
1) Private company
2) Public company
Private company Public company
1. Must end with the word 1. Must end with the word
“sendirian berhad” “berhad”
2. Max number 50 2. No limit
3. Cannot issue share to the 3. Can issue share to the
public. public in order to rise the
capital.
Accounting VS bookkeeping
Bookkeeping
Accounting
Refers to the mechanical aspect
is the bigger picture.
of accounting, such as recording,
Relate with the system that
keeps track of the data, including classifying and summarizing
people, and records the transaction
transaction by taking the Is a part of accounting
information from bookkeeping is the tedious part of the
involve analyse the results financial affairs of a business.
Give a reports and information It involves the systematic
needed for management to recording of the:
make decisions 1) Amounts
2) Dates
3) sources of each revenue and
expense transaction.
Bookkeeping is concerned with
the systems that enable the
financial information to be
extracted in the transactions.
THANK YOU