Thanks to visit codestin.com
Credit goes to www.scribd.com

Scribd
Upload
6 views1 page

Introduction

The document provides an overview of financial accounting and reporting concepts, including definitions from various accounting authorities and principles such as matching, measurement bases, and general features of financial statements. It highlights the roles of regulatory bodies in the Philippines and outlines the key features of Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Additionally, it addresses important financial metrics like liquidity and solvency.

Uploaded by

jannahabigael.sumalinog
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
6 views1 page

Introduction

The document provides an overview of financial accounting and reporting concepts, including definitions from various accounting authorities and principles such as matching, measurement bases, and general features of financial statements. It highlights the roles of regulatory bodies in the Philippines and outlines the key features of Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Additionally, it addresses important financial metrics like liquidity and solvency.

Uploaded by

jannahabigael.sumalinog
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

INTRODUCTION TO FINANCIAL ACCOUNTING Conceptual Framework – summary of terms &

AND REPORTING concepts


Matching Principles:
Accounting Definitions: 1. Cause & Effect Association Principle –
expense is recognized when revenue is
1. From Accounting Standards Council (ASC)
recognized
 Accounting is a service activity.
a. COGS
 Provides quantitative (financial)
b. Bad debts expense
information about economic entities
c. Warranty expense
that are useful in making economic
d. Sales commission
decisions
2. Systematic & Rational Allocation –
2. From American Institute of Certified Public
expense is allocated over the periods
Accountants (AICPA)
benefited
 Art of recording, classifying,
a. Depreciation
summarizing and interpreting results
b. Amortization
of financial transactions and events
c. Prepayments
3. From American Accounting Association
3. Immediate Recognition Principle – expense
(AAA)
is recognized outright
 Process of identifying, measuring, and
a. Advertising expense
communicating economic information
b. Administrative expense
c. Losses from sale
Controller is the highest accounting officer
in a business activity.
Measurement Bases:
1. Historical cost – purchase price at time of
Authorities and Regulatory Bodies: acquisition
2. Current cost – current price if purchased
1. Professional Regulation Commission (PRC)
now
– conducts CPA board exam and issues
3. Realizable value – current price if sold now
licenses
4. Present value – discounted value/future
2. Board of Accountancy (BOA) – promulgate
exchange price
rules and regulations affecting the practice
of accountancy profession in the
Philippines
General Features:
3. Philippine Institute of Certified Public
Accountants (PICPA) Follow the acronym FaGAMOFreCoCo
4. Financial Reporting Standards Council – 1. Fa – Fair presentation & compliance w/
accounting standard setting body created PFRS
by PRC to assist BOA in carrying out its  Completeness
powers & functions per RA 9298  Neutrality
 Free from error
2. G – Going concern
RA 9298 (Philippine Accountancy Act of 3. A – Accrual basis
2004) is an act regulating the practice of 4. M – Materiality & aggregation
accountancy in the Philippines. 5. O – Offsetting
6. Fre – Frequency of reporting
7. Co – Comparative information
GAAP – conventions, rules, procedures, practice & 8. Co – Consistency of operation
standards followed in the preparation of financial
statements (more general)
Additional Notes:
IFRS – set of principles-based international Liquidity – ability to meet short-term
accounting standards how particular types of obligations
transactions and other events should be reported Solvency – ability to meet long-term
in the financial statements (specific to each obligations
transaction)

You might also like