11/6/21, 12:35 PM Conceptual Framework and Accounting Standards By Valix, Peralta, and Valix - Chapter 1 Flashcards | Quizlet

Social Science / Economics / Finance

Conceptual Framework and Accounting Standards By Valix, Peralta, and

Valix - Chapter 1
Terms in this set (55)

Accounting Is a service entity.

Is the art of recording, classifying, and summarizing in a significant manner

Accounting and in terms of money, transactions, and events which are in part at least of
a financial character and interpreting the results thereof.

Is the process of identifying, measuring, and communicating economic

Accounting information to permit informed judgment and decisions by users of the
information.

To provide quantitative information, primarily financial in nature, about

Accounting Function economic entities, that is intended to be useful in the making of economic
decisions.

Transactions Economic activities of an entity are referred to

External transactions Economic events involving one entity and another entity.
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Internal Transactions Those economic activities involving one entity only.

Examples of Internal Transactions Production and Casualty

This accounting process is the recognition and nonrecognition of the

Identifying
business activities as accountable accounts.

This accounting process is the assigning of peso amount to the accountable

Measuring
economic transactions and events.

It is the original acquisition cost and the most common measure of financial
Historical Cost
transactions.

Current Value It includes fair value, value in use, fulfillment value and current cost.

The accounting process of preparing and distributing accounting reports to

Communicating
the potential users of the information.

Communicating The reason why accounting is called as universal language of business.

The process of systematically maintaining a record of all economic business

Recording or Journalizing
transactions after they have been identified and measured.

Is the sorting or grouping of similar and interrelated economic transactions

Classifying
into their respective classes.
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A group of account which are systematically categorized into asset account,

Ledger liability account, owner's equity account, revenue account, and expense
account.

The preparation of financial statements which include the statement of

Summarizing financial position, income statement, statement of comprehensive income,
statement of changes in equity and statement of cash flows.

Measures business activities, process information into reports and

Accounting as Information System
communicates the reports to decision makers.

To provide quantitative financial information about a business that is useful

Overall Objective of Accounting to statement users particularly owners and creditors in making economic
decisions.

To supply financial information so that the statement users could make

Accountant's Primary Task
informed judgment and better decisions.

The law regulating the practice of accountancy in the Philippines. The law is
Republic Act No. 9298
known as Philippine Accountancy Act of 2004.

The body authorized by law to promulgate rules and regulations affecting

Board of Accountancy
the practice of the accountancy profession in the Philippines.

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Composed of individual practitioners, small accounting firms and large

multinational organizations that render independent and expert financial
Public Accounting or Public Accountancy
services to the public.

The examination of financial statement by independent certified public

Auditing accountant for the purpose of expressing an opinion as to the fairness with
which the financial statements are prepared.

Services includes the preparation of income tax returns and determination

Taxation
of tax consequences of certain proposed business endeavors.

Generally to refer to services to clients on matter of accounting, finance,

Management Advisory Services business policies, organization procedures, product costs, distribution and
many other phases of business conduct and operations.

Major Objective of Private Accountant To assist management in planning and controlling the entity's operations.

Includes maintaining the records, producing the financial reports, preparing

Private Accounting
the budgets and controlling and allocating the resources of the entity.

Encompasses the process of analyzing, classifying, summarizing, and

Government Accounting communicating all transactions involving the receipt and disposition of
government funds and property and interpreting the results thereof.

Focus of Government Accounting The custody and administration of public funds.

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The law mandating and strengthening the continuing professional

Republic Act No. 10912 development program for all regulated professions, including the
accountancy profession.

It refers to the inculcation and acquisition of advanced knowledge, skill,

Continuing Professional Development proficiency, and ethical and moral values after the initial registration of the
CPA for assimilation into professional practice and lifelong learning.

It is procedural and largely concerned with development and maintenance

Bookkeeping
of accounting records.

Bookkeeping It is the "how" of accounting.

Accountancy It refers to the profession of accounting practice.

Generally Accepted Accounting Principles It represents the rules, procedures, practice and standards followed in the
(GAAP) preparation and presentation of financial statements.

Process of Generally Accepted Accounting It is political process which incorporates political actions of various
Principle interested user groups as well as professional judgment, logic and research.

To identify proper accounting practices for the preparation and

Purpose of Accounting Standards
presentation of financial statements.

It creates a common understanding between prepares and users of financial

Accounting Standards
Conceptual Framework and Accounting Standards
statements particularlyBy
the Valix, Peralta,
measurement and
of assets Valix - Chapt...
and liabilities.

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The accounting standard setting body created by the Professional

Regulation Commission upon recommendation of the Board of
Financial Reporting Standards Council (FRSC)
Accountancy to assist the Board of Accountancy in carrying out its powers
and functions provided under R.A. Act No. 9298.

To establish and improve accounting standards that will be generally

Main Function of FRSC
accepted in the Philippines.

It is promulgated by the Financial Reporting Standards Council constitute

Accounting Standards the "highest hierarchy" of generally accepted accounting principles in the
Philippines.

It is composed of 15 members with a Chairman who had been or is presently

Financial Reporting Standards Council (FRSC)
a senior accounting practitioner and 14 representative.

It was formed by the FRSC in August 2006 and has replaced the
Philippine Interpretations Committee (PIC) Interpretations Committee or IC formed by the Accounting Standards
Council in May 2000.

To prepare interpretations of PFRS for approval by the FRSC and to provide

Role of Philippine Interpretations Committee timely guidance on financial reporting issues not specifically addressed in
current PFRS.

It is an independent private sector body, with the objective of achieving

International Accounting Standards Committee
uniformity in the accounting principles which are used by business and
(IASC)
other organizations for financial reporting around the world.
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International Accounting Standards Board It replaces the International Accounting Standards Committee or IASC.
(IASB)

International Accounting Standards Board Publishes standards in a series of pronouncements called International
(IASB) Financial Reporting Standards or IFRS.

It includes in the correct order research, discussion paper, exposure draft

IASB standard-setting process
and accounting standard.

It is primarily concerned with the recording of business transactions and the

Financial Accounting
eventual preparation of financial statements.

It is the accumulation and preparation of financial reports for internal users

Managerial Accounting
only.

It is the area of accounting that emphasizes reporting creditors and

Financial Accounting
investors.

It is the area of accounting that emphasizes developing accounting

Managerial Accounting
information for use within an entity.

It focuses on general purpose reports known as financial statements

Financial Accounting
intended for internal and external users.

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