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Introduction To Accounting and Business: Nama: Nisa Aulia Firnanda (DB) Matkul: PA 1 NIM: 151910613067

This document provides an overview of key accounting concepts: 1) It defines accounting as an information system that reports on a business's economic activities and condition. 2) It explains that an accounting information system collects, stores, and processes financial data for internal and external users of a company. 3) It describes generally accepted accounting principles (GAAP) as the standards and concepts used to prepare financial statements according to the FASB in the US and IASB internationally.

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45 views

Introduction To Accounting and Business: Nama: Nisa Aulia Firnanda (DB) Matkul: PA 1 NIM: 151910613067

This document provides an overview of key accounting concepts: 1) It defines accounting as an information system that reports on a business's economic activities and condition. 2) It explains that an accounting information system collects, stores, and processes financial data for internal and external users of a company. 3) It describes generally accepted accounting principles (GAAP) as the standards and concepts used to prepare financial statements according to the FASB in the US and IASB internationally.

Uploaded by

nisa aulia
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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Nama : Nisa Aulia Firnanda(DB)

Matkul : PA 1
NIM : 151910613067

Introduction to Accounting and Business

Nature of Business
A business is a regular process of earning a profit by satisfying
consumer's needs through manufacturing of goods, reselling of products,
providing services.

Role of Accounting in Business


Accounting can be defined as an information system that provides
reports to users about the economic activities and condition of a
business.

Accounting Information System


Accounting information system is a system that collects, stores and
processes financial and accounting data that is used by decision makers.
The accounting information system is very much needed for external(ex:
investors, creditors, customers, government) and internal(ex: managers
and employees) accounting users of a company's organization.

Role of Ethics in Accounting and Business


Accountants must behave in an ethical manner so that the information
they provide and, thus, useful for decision making users will be
trustworthy Ethics are moral principles that guide the conduct of
individuals.

Opportunities for Accountants


Accountants who work in a company that aims to make a profit or a
non-profit organization are called private accounting. accountants and
their staff who work in providing accounting services to the public are
called public accounting. Public accountants who have met a state's
education, experience, and examination requirements may become
Certified Public Accountants (CPAS).

Generally Accepted Accounting Principles


Generally accepted accounting principles are the principles and concepts
used by accountants in preparing financial statements.Financial
accountants follow generally accepted accounting principles (GAAP) in
preparing reports Within the U.S., the Financial Accounting Standards
Board (FASB) has the primary responsibility for developing accounting
principles. The Securities and Exchange Commission (SEC), an agency
of the U.S. government, has authority over the accounting and financial
disclosures for companies whose shares of ownership (stock) are traded
and sold to the public Many countries outside the U.S. use generally
accepted accounting principles adopted by the International Accounting
Standards Board (IASB).

Business Entity Concept


An accounting entity is an organization that stands alone as a separate
economic unit. The determination of an entity is based on identifying
individual economic units whose economic data are needed. If the entity
has been determined, the accountant will be able to determine which
economic and activity data should be analyzed, recorded, and
summarized in the report.

Cost Concept
amounts are initially recorded in the accounting records at their cost or
purchase price.
The cost concept also involves the objectivity and unit of measure
concepts.

The Accounting Equation


The Accounting Equation is an equation that shows that the sum of all
assets or sources listed on the left is from creditors and owners listed on
the right hand side. Conversely, the amount of contributions from
creditors and owners must equal the amount company assets. Resources
owned by a business expressed in units of money are called assets.
Creditors' rights are business debts and are called liabilities. Owner
rights to company assets are called owner's equity. Asset Equation =
Liabilities + Owner's Equity is called an accounting equation.

In Transaction:
 Account payable is the responsibility made by the purchase in the
account.
 Cash in advance is items such as inventory that will be used in
business in the future, which are assets.
 Businesses make money selling goods or services to their
customers. This amount is called income.
 Revenue from providing services is recorded as fees earned.
 Revenue from the sale of merchandise is recorded as sales.
Other examples of revenue include rent, which is recorded as rent
revenue, and interest, which is recorded as interest revenue.
 An receivable account is a claim against a customer which is an
asset
 Expenses are assets that are used to spend cash or use other assets
in the process of earning income

Financial Statements
After transactions have been recorded and summarized, reports are
prepared for users. The accounting reports providing this information
are called financial statements. I Description of Statement
1. Income statement : A summary of the revenue and expenses for a
specific period of time, such as a month or a year. The income
statement reports the revenues and expenses for a period of time,
based on the matching concept.
2. Statement of owner's equity : A summary of the changes in the
owner's equity that has occurred during a specific period of time,
such as a month or a year. The statement of owner's equity reports
the changes in the owner's equity for a period of time.
3. Balance sheet : A list of the assets, liabilities, and owner's equity
as of a specific date, usually at the close of the last day of a month
or a year.
4. Statement of cash flows : A summary of the cash receipts and
cash payments for a specific period of time, such as a month or a
year. The cash flows from operating activities section reports a
summary of cash receipts and cash payments from operations.

Liabilities to Owner's Equity


The ratio of liabili
ties to owner's equity is useful analyzing the ability of a company to pay
its creditors. The ratio of liabilities to owner's equity is computed as
follows:
ratio of liabilities to owner's equity = Total Liabilities/ Total Owner's
Equity(or Total Stockholders' Equity)

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