Accounting is "the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events

which are, in part at least, of financial character, and interpreting the results thereof.

ACCOUNTING is primarily a system of measurement and reporting of economic events based upon the accounting equation for the purpose of decision making. Generally, when someone says "accounting" they are referring to the department, activity or individuals involved in the application of the accounting equation.

MANAGERIAL ACGT

MANAGERIAL ACCOUNTING is a system using financial accounting records as basic data to enable better business decisions in the areas of planning and control.
The process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals. The key difference between managerial and financial accounting is that managerial accounting information is aimed at helping managers within the organization make decisions. In contrast, financial accounting is aimed at providing information to parties outside the organization
Managerial accounting is concerned with providing information to managers - that is, people inside an organization who direct and control its operation. Managerial accounting provides the essential data with which the organizations are actually run. Managerial accounting is also termed as management accounting or cost accounting.

Managerial accounting activities include some or all of the following: recognizing and evaluating transactions and economic events; quantifying and estimating the value of those events; recording and classifying appropriate transactions and events; and analyzing the reasons for, and relationships between, the transactions and events. Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet. A field of accounting that treats money as a means of measuring economic performance instead of as a factor of production. It encompasses the entire system of monitoring and control of money as it flows in and out of an organization as assets and liabilities, and revenues and expenses. FINANCIAL ACCOUNTING is the area of accounting concerned with reporting financial information to interested external parties

Financial accounting gathers and summarizes financial data to prepare financial reports such as balance sheet and income statement for the organization's management, investors, lenders, suppliers, tax authorities, and other stakeholders.

ACCOUNT TITLES
ASSETS
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y y

Cash: This is used for physical currency (money in hand, check from a customer or a bank, or money transferred to a bank account) was exchanged Accounts Receivable: This name is used for money that the company is supposed to collect later on but can be recorded now. For example, suppose our car repair shop changes the tires of a customer, performs a tune-up, installs new brakes, and changes the whole muffler system (and the customer had agreed to all these repairs). When presented with the invoice of $850, suppose the customer does not have the whole amount. The customer and the business can make an arrangement that the customer would pay part of it, such as $500. The rest would be paid at a later date. This rest ($850 - $500 = $350) is recorded as Accounts Receivable Supplies: This account can be used for accessories that a company purchases. This can include garbage can, cell phone, computer paper, toilet paper, table cloth, hard hats, etc Equipment: This is for a machine used by the business. This can be a tire rotating machine, a car, a computer, a printer, etc

y y y y y y y y

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Cash - the most liquid item in the balance sheet can be subdivided into cash on hand, cash in bank and/or cash funds (petty cash, sinking fund, payroll fund) Investments in stocks - are ownership of shares of a certain corporation Marketable securities - financial assets that are highly liquid and are held for re-selling mainly capitalizing on short-term price fluctuations. Accounts receivable - claims arising from the sale of goods and services on a credit basis. Notes receivable - almost the same as accounts receivable, the only difference is the fact that Notes receivable are evidence by a non-negotiable promissory note. Merchandise inventory - products that are acquired by a trading type of business with the primary purpose of re-selling them within the operating cycle. Prepaid expenses - right to receive benefits from expenses paid in advance. Furnitures and fixtures - as the term suggests, these are ofice equipment that doesn't necesarilly acquired for usage in normal operations rather furnitures and fixtures are acquired for office improvements and is deemed useful for succeeding years to come. Franchises - right to use a certain brand, design, technology and/or privileges belonging to a so-called franchisor (intangible assets) Accrued revenue receivable - right to collect income (usually income that is yet to be billed) that is already earned but not yet collected.

LIABILITIES
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y y y y y

Accounts payable - is an obligation of the entity to pay a sum amount of money, that arises from the buying of goods and services on credit terms in the ordinary course of the business. Loans payable - obligations of an entity that arises from the borrowing of money from a lender. Unearned revenues - obligations to supply goods and services that is a result of advance payments of customers. Notes payable - almost the same as accounts payable, the only difference however is the fact that the liability is evidenced by a non-negotiable promissory note. Mortgage payable - obligations for long term borrowing in which a fixed asset, usually a land or building is use as a collateral. Salaries and wages payable - are obligations to employees to pay an agreed just compensation for rendering services for the entity.

Per accounting standards the account title accrued expense payable can be re-classified as; accrued utilities payable, accured rent payable, accrued salaries payable so on and so forth. Other examples are as follows; Taxes payable, customer's refundable deposits, advances from clients, loans payable to partners, loans payable to associates, interest payable.

OWNER S EQUITY
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Capital - the investment of the owner(s) whether initial or additional. Drawing - personal withdrawals of the owner(s) that decreases the value of equity.

1. Assets * Cash * Short-term marketable securities * Trade notes and accounts receivable * Inventories * Long-term investments * Property and equipment * Intangible assets * Deferred charges 2. Liabilities

* Demand notes * Trade accounts payable * Accrued expenses * Long-term debt * Other long-term liabilities 3. Revenue # Sales revenue from product A # Sales revenue from product B (and so on for each product you want to track) # Interest income # Income from sale of assets # Consulting income 4. Capital * Preferred stock * Common stock * Additional paid-in capital * Retained earnings * Accumulated other comprehensive income * Treasury stock 5. Expenses # Salaries and wages # Telephone # Electric utilities # Repairs # Maintenance # Depreciation # Amortization # Interest # Rent