Unit 1Introduction to Accounting1.Definition of Accounting2.Users and classifications of Accounting3.Accounting Assumptions and Principles4.Financial Statements
Unit 1 Introduction to Accounting 1.Definition of Accounting 2.Users and classifications of Accounting 3.Accounting Assumptions and Principles 4.Financial Statements
What is Accounting?Bean-counting? Hero of action?Art ? Technique?Youranswer?Early accounting & modern accounting2025/12/3
2025/12/3 2 What is Accounting? ◼ Bean-counting? Hero of action? ◼ Art ? Technique? ◼ Your answer? ◼ Early accounting & modern accounting
What is Accounting?Accounting is an information systemthat identifies,records,and communicates the economic events(transactions)ofanorganizationtointerestedusersforthe purpose of decision-making.Primary dataAccountinginformationinputoutputProcess202
2025/12/3 3 What is Accounting? Accounting is an information system that identifies, records, and communicates the economic events (transactions) of an organization to interested users for the purpose of decision-making. Process Primary data input Accounting information output
Process of accountingRecordingIdentificationCommunicationAccountingReportsVISA'MastercardSOFTBYTEAnnulReportRecord, classifySelecteconomiceventsand summarize(transactions)2025/12/3
2025/12/3 4 Process of accounting Identification Select economic events (transactions) Recording Record, classify and summarize Accounting Reports SOFTBYTE Annual Report Communication
Users and ClassificationUsersInternal usersExternalusersManagersOwnersEmployeesInvestorsUnionsCreditorsCustomersTaxauthorities2025/12/3
2025/12/3 5 External users Internal users Users and Classification ◼ Owners ◼ Investors ◼ Creditors ◼ Customers ◼ Tax authorities ◼ . ◼ Managers ◼ Employees ◼ Unions ◼ . Users
Ouestionsaskedbyinternal usersSWhat is the cost of manufacturingIs cash sufficient to pay bills?each unit of product?Can we afford to give employeeWhichproduct lineis themost62025/12/3profitable?pay raises this year?
2025/12/3 6 Questions asked by internal users Is cash sufficient to pay bills? What is the cost of manufacturing each unit of product? Can we afford to give employee pay raises this year? Which product line is the most profitable?
Ouestionsasked byexternalusersHow does the company compare insize and profitability with otherIs itsprofit true?Does itcompanies?pay sufficient tax?Will the company be able to pay their debts as they come due?2025/12/3
2025/12/3 7 Is its profit true? Does it pay sufficient tax? Will the company be able to pay their debts as they come due? How does the company compare in size and profitability with other companies? Questions asked by external users
ClassificationFinancialManagerialaccountingaccountingThe preparationofProvideinformationtofinancial reports andinternal managementfor decision-making,statementsfor usersmainly outsidethepredicting, planning.businesscontrolling andevaluation2025
2025/12/3 8 Managerial accounting Financial accounting Classification ◼ The preparation of financial reports and statements for users mainly outside the business Provide information to internal management for decision-making, predicting, planning, controlling and evaluation
Accounting assumptionGAAP is a set of standards and rules recognized asageneral guideforfinancialreporting.MonetaryUnitAssumptionEconomicEntityAssumptionTime Period AssumptionGoingConcern Assumption2025/12/3
2025/12/3 9 Accounting assumption GAAP is a set of standards and rules recognized as a general guide for financial reporting. Monetary Unit Assumption Economic Entity Assumption Time Period Assumption Going Concern Assumption ★ ★ ★ ★
MonetaryUnitAssumptionOnly transaction data that can be expressed in terms of money beincluded in theaccounting records.HiringanemployeePayingNumberofemployeesanemployeeRecordDonotrecord$102025/12/3
2025/12/3 10 Only transaction data that can be expressed in terms of money be included in the accounting records. Monetary Unit Assumption Hiring an employee Number of employees Do not record Record Paying an employee