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ACC 111 – Financial Accounting and Reporting
Topics:
ACCOUNTNG INFORMATION SYSTEM
ELEMENTS OF FINANCIAL STATEMENTS
ACCOUNTNG INFORMATION SYSTEM
Information System
- This a collection of people, procedures, software, hardware and data that works together
to provide information essential in running an organization
...

- A system that starts from the economic activities that are inputted to the systems and
transformed into a useful accounting information and keep the information for future use
...

Types of Accounting Information System
-

This will serve as the database of information of the entity
to record the transactions of the business
...

- Uses labor intensive and became inefficient in today’s complexity of accounting and
business environment
...

Database Accounting Information System
- The system is advanced in the since that in this system the information is processed in
an accounting software such as enterprise resource planning (e
...
SAP, Oracle,
QuickBooks and PeopleSoft
...


Stages of Data Processing
- This process follows the input-processing-output progression as the raw data are
transformed into summarized reports
...
Statement of Financial Position or Balance Sheet
2
...
Statement of Cash Flows
4
...
Notes to Financial Statements

The financial statements are composed of five elements
o
o
o
o
o

Assets
Liabilities
Owner’s Equity
Income
Expenses

Elements presented in the Statement of Financial Position or Balance Sheet
o
o
o

Assets
Liabilities
Owner’s Equity

Elements in the Statement of Comprehensive Income or Income Statement
o
o

Income
Expenses

Financial Position
Assets
- This is a present economic resource

In the definition it states about the three (3) aspects
1
...
g
...
g
...


2
...

3
...


Liability
- This is a present obligation of the entity to transfer economic resources as a result of
past transactions or events
...

a
...
The obligation is to transfer economic resources; and
c
...

The transfer of economic resources includes the following obligation:
a
...
To deliver goods or provide services;
c
...

d
...

e
...
The entity has already obtained economic benefits or taken an action; and
b
...


Equity
- This is the residual interest after deducting all the liabilities from the total assets
1
...
Partnership = Partner’s Equity
3
...
Cooperatives = Member’s Equity

Financial Performance
Income
- This increases in assets
- Decreases in liabilities
- An increase in equity

Expenses
- This decreases in assets
- increases in liabilities
- Decrease in equity



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