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The Business Environment2

The document discusses the different branches of accounting including financial accounting, management accounting, government accounting, auditing accounting, tax accounting, cost accounting, accounting education, and accounting research. It also discusses the users of financial information, separating them into internal users which include investors/owners/stockholders, management, and employees, and external users which include financial institutions/creditors, government, and potential investors/creditors. Financial accounting deals with principles and concepts related to preparing financial statements, while management accounting provides information to various management levels. Government accounting records all financial transactions incurred by the government.

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Roqui M. Gonzaga
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33 views26 pages

The Business Environment2

The document discusses the different branches of accounting including financial accounting, management accounting, government accounting, auditing accounting, tax accounting, cost accounting, accounting education, and accounting research. It also discusses the users of financial information, separating them into internal users which include investors/owners/stockholders, management, and employees, and external users which include financial institutions/creditors, government, and potential investors/creditors. Financial accounting deals with principles and concepts related to preparing financial statements, while management accounting provides information to various management levels. Government accounting records all financial transactions incurred by the government.

Uploaded by

Roqui M. Gonzaga
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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The Business Environment

* THE DIFFERENT BRANCHES OF


ACCOUNTING

* USERS OF FINANCIAL INFORMATION


THE DIFFERENT BRANCHES OF ACCOUNTING

Financial Accounting
1. FINANCIAL ACCOUNTING
deals with the theoretical framework covering accounting
principles and concepts relative to measurement and
valuation as applied to assets, liabilities, stockholder’s
equity, retained earnings, revenue, and expense accounts
in relation to the preparation and presentation of financial
statements.
 rervenues
 expenses
 assets
 liabilities
1. FINANCIAL ACCOUNTING

It also involves the basic accounting process


recording
classifying
summarizing
Interpreting
1. FINANCIAL ACCOUNTING
recording
 writing down of business transactions chronologically in the books of
account as they transpire.
classifying
 sorting similar and related business transactions into the three categories
assets, liabilities and owners equity.
 Assets
 Resources owned by a company
 liabilities
 debts and obligations of a business
 Owners equity- owners share of the assets of a business.
1. FINANCIAL ACCOUNTING
Summarizing
preparing the financial statements from the transactions
recorded in the books of account that are designed to meet the
information needs of its users.

Interpreting
 qualitative and quantitative financial information about business
transactions.
 determine the financial standing of the company
2. MANAGEMENT ACCOUNTING
The IMA defines management accounting as a profession that
involves partnering in management decision making, devising
planning and performance management systems, and providing
expertise in financial reporting and control to assist manage in the
formulation and implementation of an organization’s strategy.
is the branch of accounting designed to provide information to
various management levels in the hospitality operation for the
purpose of enhancing controls.
3. GOVERNMENT ACCOUNTING

Section 109 of Presidential Decree No. 1445 states that


government accounting encompasses the process of analysing,
classifying, summarizing, and communicating all transactions
involving the receipt and disposition of government funds and
poverty.
3. GOVERNMENT ACCOUNTING

refers to the process of recording and the management of all


financial transactions incurred by the government which includes
its income and expenditures.
4. AUDITING ACCOUNTING

 branch of accounting involved in reviewing and evaluating


documents, records, and control systems. Auditing may be
external or internal.
 is the examination and review of accounting reports in order to
ascertain their fairness, propriety, and reliability.
5. TAX ACCOUNTING

 Tax services provided by accountants include the preparation of


monthly value added tax, percentage tax, expanded withholding
tax returns, quarterly and annual tax returns, and any other taxes
applicable to business.
6. COST ACCOUNTING

includes the collection, determination, allocation, assessment,


interpretation, and control of cost data, particularly the cost of
production in a manufacturing concern.
7. ACCOUNTING EDUCATION

involves planned grading and formal teaching in an educational


institution. The professional accountant imparts knowledge to
students
8. ACCOUNTING RESEARCH

involves conducting a careful and diligent study aimed at discovering


and interpreting facts, revising accepted theories in the light of new
facts, or the practical application of such new or revised theories for the
generation of a new knowledge.
USERS OF FINANCIAL INFORMATION

INTERNAL USERS
AND
EXTERNAL USERS
USERS OF FINANCIAL INFORMATION

INTERNAL USERS
Investors/ Owners/ Stockholders
Management
Employees
USERS OF FINANCIAL INFORMATION

EXTERNAL USERS
Financial Institutions/ Creditors
Government
Potential Investors/ Creditors
INTERNAL USERS

Internal users are the primary users of financial


information who are inside the reporting entity and are
directly involved in managing the company’s daily
operations.
INTERNAL USERS

1.Investors/ Owners/ Stockholders


These parties provide the financial resources to
keep the business going. They decide whether to
invest or not depending on the estimated amount of
income on the investment.
INTERNAL USERS
2. Management
Organizational managers use financial information to set goals
for their companies.

3. Employees
Although the employees are not directly involved in the
decision making of the company, they are nonetheless
interested in the financial information of the company to
determine if they have a future in the company.
USERS OF FINANCIAL INFORMATION

EXTERNAL USERS
Financial Institutions/ Creditors
Government
Potential Investors/ Creditors
EXTERNAL USERS

External users are secondary users of financial


information who are parties outside the company.
EXTERNAL USERS

1. Financial Institutions/ Creditors


Before extending credit, financial institutions use
financial information to determine the capacity of the
business organization to pay its obligations and their
interests at the appropriate
EXTERNAL USERS

2. Government
Financial information is important for tax purposes and in
checking of compliance with Securities and Exchange
Commission (SEC) requirements
EXTERNAL USERS

3. Potential Investors/ Creditors


Institutional investors, such as pension funds, mutual funds, unit
investment trusts, endowments, insurance companies and
others looking for diversification or to match liabilities can use
these securities to help ensure their investment goals are met
and to protect the value of their investments.
THANK YOU FOR
LISTENING!

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