ACCOUNTING - 1

is the process of recording financial transactions pertaining to a business.

includes analyzing, recording, summarizing, financial transactions or events over an accounting period, and reporting these transactions in the form of financial statements to government’s regulatory, and tax collecting agencies.

Income Statement, Balance Sheet, Capital Statement and Statement of Cash Flows

main accounting principles and guidelines

a sole proprietorship and its owner are considered to be one entity, but for accounting purposes they are considered to be two separate entities.

only transactions that can be expressed in Philippine pesos are recorded.

assumes that it is possible to report the complex and ongoing activities of a business in relatively short, distinct time intervals.

the amounts shown on financial statements are referred to as historical cost amounts.

If certain information is important to an investor or lender using the financial statements, that information should be disclosed within the statement or in the notes to the statement.

assumes that a business will continue to exist long enough to carry out its objectives and commitments and will not liquidate in the foreseeable future.