Is a service activity Its function is to provide quantitative information primarily financial in nature about economic activities?

 Definition of Accounting

o Accounting is a service activity. Its function is to provide

quantitative information, primarily financial in nature,

about economic entities, that is intended to be useful in

making economic decision. (SFAS #1)

o Accounting is the art or recording, classifying and

summarizing in a significant manner and in terms of

money, transactions and events which are in part at least

of a financial character and interpreting the results

thereof. (AICPA)

o Accounting is the process of identifying, measuring and

communicating economic information to permit informed

judgment and decision by users of the information. (AAA)

 Accounting (AAA)

o Identifying

 Recognition of accountable or non accountable event.

1) Internal

2) External

o Measuring – Assigning of peso amounts to accountable

events

o Communicating

 Recording

 Classifying

 Summarizing

 Prohibition in the Practice of Accountancy

o No person shall practice accountancy in this country, or

use the title "Certified Public Accountant", or use the

abbreviated title "CPA" or display or use any title, sign,

card, advertisement or other device to indicate such

person practices or offers to practice accountancy, or is a

certified public accountant, unless such person shall have

received from the Board a certificate of

registration/Professional license and be issued a

professional identification card or a valid

temporary/special permit duly issued to him/her by the

Board and the Commission. (Section 26, R.A. 9298)

 Qualifications of Applicant for Examinations

o Any person applying for examination shall establish the

following requisites to the satisfaction of the Board that

he/she:

1) Filipino citizen;

2) Good moral character;

3) Holder of the degree of Bachelor of Science in

Accountancy conferred by the school, college,

academy or institute duly recognized and/or

accredited by the CHED or other authorized

government offices; and

4) Not been convicted of any criminal offence involving

moral turpitude.

 Scope of Examination

o The licensure examination for certified public accountants

shall cover, but are not limited to, the following subjects:

1) Theory of Accounts

2) Business Law and Taxation

3) Management Services

4) Auditing Theory

5) Auditing Problems

6) Practical Accounting Problem I

7) Practical Accounting Problem II. (Section 15, R.A.

9298)

 Rating in the Licensure Examination

o To be qualified as having passed the licensure examination

for accountants, a candidate must obtain a general

average of seventy five percent (75%), with no grade lower

than sixty-five percent (65%) in any given subject. In the

event a candidate obtains the rating of seventy-five

percent (75%) and above in at least a majority of subjects

as provided for in this Act, he/she shall receive a

conditional credit for the subjects passed: Provided, That a

candidate shall take an examination in the remaining

subjects within two (2) years from preceding examination:

Provided, further, That if the candidate fails to obtain at

least a general average of seventy-five percent (75%) and a

rating of at least sixty-five percent (65%) in each of the

subjects reexamined, he/she shall be considered as failed

in the entire examination. (Section 16, R.A. 9298)

 Rating in the Licensure Examination

o To passed:

1) General average of 75% and above

2) No grade lower than 65%

o Conditional:

 Does not meet both requirements to passed but

majority of the subjects has a rating of 75% and

above.

o Failed:

 Does not meet both requirements to passed and

majority of the subjects has a rating of less than 75%.

 Scope of Practice

o The practice of accountancy shall include, but not limited

to, the following:

a) Practice of Public Accountancy

b) Practice in Commerce and Industry

c) Practice in Education/Academe

d) Practice in Government. (Section 4. R.A. 9298)

 Accounting vs. Auditing

 Accounting vs. Bookeeping

 Accounting vs. Accountancy

 Financial Accounting vs. Managerial Accounting

 Generally Accepted Accounting Principle (GAAP)

o Generally accepted accounting principles encompass the

conventions, rules and procedures necessary to define

what accepted accounting practice is.

o It represents the rules, procedures, practice and standards

followed in the preparation and presentation of financial

statements.

o Basis

 Experience

 Reason

 Usage

 Customs

 Practical necessity

What is the service activity that provides quantitative information which is financial in nature?

Is a service activity Its function is to provide quantitative information?

What is the basic purpose of accounting A to provide quantitative financial information about economic activities?

Why is accounting primarily financial in nature?