Sei sulla pagina 1di 34

Week 1

ORIENTATION &
ACCOUNTING BASICS
COURSE OVERVIEW
A. Course No.: IT200
B. Course Title: Accounting Information System
C. No. of Units: 3 units
D. Semester Offered: 1st Semester
E. Lecturer: Mylene S. Caballero
F. Consultation Hours: Tuesday 12:30 2:30
G. Linkage with Subsequent Courses: This course is not a
prerequisite to any of the major subjects of the BSIT program.
H. Schedule:
A. IT3B 8:00 11:00am lab. Tues.
B. IT3B 4:10 5:40pm lec. Tues. & Thurs.
C. IT3A 1:00 4:30pm lab. Tues.
D. IT3A 1:00 4:05pm lec. Thurs.
COURSE OVERVIEW
Course Description This course introduces Computer
Science and Information Technology majors to the
basic accounting concepts and principles underlying
financial statements of business enterprises. This
course provides a theoretical basis for understanding
accounting and system concepts as an introduction of
Accounting Information Systems. The course contains
in-depth coverage on transaction processing systems
organized by cycles (Revenue, Expenditure,
Conversion, and Financial Cycles). The course shows
on how to use database theory and tools to build
functional accounting systems per accounting
transaction cycles.
OBJECTIVES
Values to be integrated This course aims
to develop the critical thinking skills of the
students as they try to portray the role of a
systems analyst particularly in accounting
information systems. They are expected
to become good development planners
equipped with the proper knowledge and
values as they try to formulate humane
decisions and solutions to real-world
issues.
TEXTBOOKS/REFERENCES
1. Basic Accounting by Win Lu Ballada
2. Basic Accounting by Edwin G. Valencia &
Gregorio F. Roxas, 3rd edition 2009-2010
3. Fundamentals of Accounting by Rafael M.
Lopez, Jr., Millennial edition 2007-2008
4. Accounting Information Systems by James
Hall
5. Building Accounting Systems Using Access
2000 by James Perry & Gary Schneider, 2001
edition
COURSE REQUIREMENTS
Assignments
Projects
Exams
THE GRADING SYSTEM
CLASSROOM POLICIES
Pray before and after the class.
COURSE OUTLINE
1 Accounting basics
2 The accounting equation & the double-entry system
3 Recording business transactions
4 Adjusting the accounts
5 Worksheet & financial statements
6 Completing the accounting cycle
7 Merchandising operations
8 Overview of accounting information systems
9 Accounting Information Cycles Revenue Cycle,
Expenditure Cycle, Conversion Cycle, Financial Cycle
LEARNING OBJECTIVES
Discuss & differentiate forms of business
organizations
Activities performed by business organizations
Define terms use in accounting
Explain & differentiate phases of accounting
Differentiate the difference between
bookkeeping & accounting
Discuss different fundamental concepts
What is an IT
(INFORMATION TECHNOLOGY)?
Data placed in a meaningful and useful context for an
INFORMATION end user.

Data in its various forms (business data, voice conversations,


still images, motion pictures, multimedia presentations,
and other forms).

End user Anyone who uses an information system or the


information it produces.

The scientific method and material used to


TECHNOLOGY achieve a commercial or industrial objective.

The study, design, development, implementation,


Method used: support or management of computer-based
information systems.
Material used: Computer Hardware and software application
To create, convert, store, exchange, protect,
Commercial or process, transmit, and securely retrieve and use
Industrial objective:
information in its various forms:
What is an IT?
Information technology (IT), is "the study,
design, development, implementation, support
or management of computer-based information
systems, particularly software applications and
computer hardware to create, convert, store,
exchange, protect, process, transmit, and
securely retrieve and use information in its
various forms (business data, voice
conversations, still images, motion pictures,
multimedia presentations, and other forms) for
anyone who uses an information system or the
information it produces.
Why do IT needs Accounting?
Accounting is called the language of business.

Is the medium Bridging Motive is


of communication through profit.
communication Financial Information
or Financial IT is a
Statements business.
Why do IT needs Accounting?
Accounting is called the language of business.
Business Bridging communication Various users
through Financial (decision makers)
Statements

Two-way communication

Legal Forms of Internal user Management Group


Business (own, manage & control the business
Organizations (Sole entity)
proprietorship,
Partnership, External users Financing Group and
Corporation, Public Group (do not own, manage &
Cooperative) control the business entity)
LEGAL FORMS OF BUSINESS
ORGANIZATION

1.Sole Proprietorship
2.Partnership
3.Corporation
4.Cooperative
Various Users (Decision Makers)
Users of Accounting Information

INTERNAL USERS EXTERNAL USERS


FINANCING GROUP
MANAGEMENT GROUP
Investors, potential investors, trade
Sole proprietors, partners, board
creditors or suppliers, potential
of directors or stockholders,
creditors, lenders or banks & other
officers, managers, supervisors
financing institutions.
PUBLIC GROUP
Government regulatory agencies,
taxing authorities, labor unions,
employees, retirees, economic
planners, customers
ASSIGNMENTS

1. What are the 2. Give at least


legal forms of 10 users of
business
Financial
organization?
Differentiate them
Statements.
and state the What decision
name of the they have to
owner. make?
Why do Accounting needs IT?
Information Technology's Role Today
1. All businesses need Computers
2. One of the first and largest applications of
computers is keeping and managing business
and financial records.
3. Large databases are managed by computer
programs.
4. All the information companies need to do
business involves the use of computers and
information technology.
What is Accounting?
Accounting is the system that measures activities, processes that
information into reports, and communicates the results to
decision-makers.
1) measures 2) Processes that 3) Communicates
business activities information into the results to
reports, and decision-makers.
Measures
through monetary Processes Communicates
value Accounting process By means of Financial
through accounting Statements
Business activities cycle
Results
Servicing,
Merchandising, information Of Financial Statements
Manufacturing, Financial information
Agriculture Decision makers
Reports To Various users
Operating, investing &
financing activities Balance Sheet, Income Statement
ACTIVITIES PERFORMED BY
BUSINESS ORGANIZATIONS
SERVICING MANUFACTURING

Perform services Raw materials into


for a fee finished products

MERCHANDISING
AGRICULTURE
Buy & sell
finished products Plant, sell in raw
or finished form
WHAT IS ACCOUNTING?
Accounting is the art of recording, classifying,
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.
As an art, accounting demands critical thinking and creative
Art skills. Accountants gather relevant data and convert them into
organized financial reports.
WHAT IS ACCOUNTING?
Accounting is the art of recording, classifying,
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.
May be occasional to the business such as losses due to theft,
Event calamity and decline in market value of inventory.

Is sourced from ordinary business activities, such as


Transaction selling, purchasing and producing.

In terms of Before the effects of transactions can be recorded, they


money must be measured and expressed in terms of a
common financial denominator---money.

Are all business events and transactions accountable?


PHASES OF ACCOUNTING

5. Adjusting Profitability How


1. Identifying 3. Posting to the
journal entries much is the
transactions and ledger general
increase in capital
events source ledger 6. Preparing the as a result of
documents worksheet business
4. Trial balance operation?
2. Journalizing preparation 7. Preparing
financial Liquidity Are there
transactions the
statements available funds to
journal
finance the
8. Closing business
entries operation?

NOTE: Steps 1 to 10 is 9. Post-closing Solvency Can the


trial balance business pay its
the ACCOUNTING long-term
CYCLE. 10. Reversing obligations to
entries others?
BOOKKEEPING & ACCOUNTING
(are two related processes.)

BOOKKEEPER ACCOUNTANT
BOOKKEEPING & ACCOUNTING
(one is useless without the other)

BOOKKEEPING ACCOUNTING
(how accounting is done) (why accounting is done)

1. Refers to the mechanical aspect. 1. Refers to the analytical and


interpretative aspects of
2. The process of recording accounting.
systematically the business
transactions in a chronological 2. Requires complete and accurate
manner. bookkeeping records necessary to
the performance of its
Systematic it follows procedures responsibility.
and principles.
Chronological the transactions
are recorded in order of the date
of occurrence.
BOOKKEEPING & ACCOUNTING
(one is useless without the other)

BOOKKEEPING ACCOUNTING
(how accounting is done) (why accounting is done)

3. An accounting support function. 3. Functions at a higher level or


degree than bookkeeping.
4. Bookkeeper uses the accounting
4. Accountant designs the
information system the accountant
accounting information system that
designs.
the bookkeeper will use.
5. Bookkeeper is under the
supervision of an accountant. 5. Accountant supervises the work
of bookkeepers.
6. Alone could not arrive at the
desired result of the entire 6. Could not reach at this final
accounting process. point without first passing through
the bookkeeping process.
Other definition of Accounting
It 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 decisions.
It is the process of identifying, measuring and
communicating economic information to permit
informed judgments and decisions by users of
the information.
All of the above and previous definitions touch the most important
points of accounting as:
1. Accounting is about quantitative information.
2. The information is of financial in character.
3. Usefulness of information in decision making.
ACCOUNTING CONCEPTS OR ASSUMPTIONS

Are important assumptions or ideas


which accountants observe in recording
business transactions in the books of
accounts.
1. Entity concept or accounting entity
concept
2. Periodicity concept or time periods
concept
3. Stable monetary unit concept or
monetary unit concepts
Accounting Entity Concept

State that accountants regard a business


enterprise as a separate and distinct entity
from the person or people who own and run it.
Business and personal transactions of the
owner should not be merged.

BUSINESS 1 BUSINESS 2 OWNER

Keep its own record Keep its own record Keep its own record

Transactions of different entities should be


accounted for together.
Periodicity or Time Period Concept

An entitys life can be meaningfully subdivided


into equal time periods for reporting purposes.
This concept allow the users to obtain timely
information to serve as a basis on making
decisions about future activities.

CALENDAR YEAR FISCAL YEAR INTERIM PERIOD

A 12-month period (Jan. to Composed of 12 A business period within


Dec. 31 of the accounting months but starts acx accounting period
period). from any month other (weekly, monthly, quarterly,
than January. or semi-annual)

When a financial report is prepared, it is importrant to indicate


the date when it was prepared and the time period it covers.
Monetary or Stable Monetary Unit Concept
The Philippine peso is a reasonable unit of measure
and that its purchasing power is relatively stable. It
has the same purchasing power as any other peso at
any time.
This is the basis for ignoring the effects of inflation in
the accounting records.

QUANTIFIABILITY PESO STABILITY


ASSUMPTION ASSUMPTION
Accountants use a common Accountants assume that the
unit of measurement that is, monetary unit retains its purhcasing
money. power regardless of fluctuation in
money value.
With the adoption of IAS and IFRS, some accounting
elements are measured at their fair market value.