Asteris Knowledge

Training center
Accounting for-Non Accountant Seminar
By: Atty. Rheiner P. Mora,CPA
August 4, 2016 at Alpa City Suites
Hernan Cortes corner F. Cabahug Street,
Cebu City.
 Accounting for
Non
Accountants
ATTY. RHENEIR P. MORA
RESOURCE SPEAKER
MANAGING PARTNER, R. P. MORA & CO.

August 4, 2016 at Alpa City Suites

Hernan Cortes corner F. Cabahug Street, Cebu City.
 ACCOUNTING
A service activity whose function is to
provide quantitative information,
primarily financial in nature, about
economic entities, that is intended to be
useful in making economic decisions.

In general sense, ACCOUNTING is an

information system that provides reports
to stakeholders about economic activities
and condition of the organization.
Bookkeeping vs. Accounting
Accounting
Includes bookkeeping and so
much more
Record, organize, maintain,
analyze, communicate

Bookkeeping
The recording of economic
events. One part of accounting
 ACCOUNTING INFORMATION SYSTEM

Raw Data Process Informatio

n

ACCOUNTING
INFORMATION Financial
Statements
/ Reports
SYSTEM

Accounting
Summary
 Financia
l
Stateme
nts

Balanc Income Chang

Cash
e Statem es in Notes
Flow
Sheet ent Equity
 How we are going to use
this accounting information
as a tool?

Decision
Making
Financial
Statements
Organization
 USERS

Unaudite Managem
Financial d ent
Statemen
ts Stakehold
Audited
ers
 Why Accounting?
Accounting is
the tool for
providing
financial
information to
various
stakeholders
 Management

Financial
Statement is a
tool to measure
the Efficiency
and
Effectiveness of
management.
Management

Efficien Effectiven
cy ess
Exampl Expense
e
Revenue
s
If actual If actual
exceeds budget exceeds budget

FAVORABLE UNFAVORABLE
 Business
Business Stakeholders
Stakeholders
A business stakeholder is a person or entity
having an interest in the economic
performance of the business.
The
TheProcess
Processof
ofProviding
ProvidingInformation
Information
STAKEHOLDERS
Identify Internal: External:
1 stake-
holders.
Owners,
managers,
Customers,
creditors,
employees government

Assess stakeholders
2 informational needs.
 The
The Process
Process of
of Providing
Providing
Information
Information

Design the
Record accounting
economic Accounting
4 data about
business
Information
System
3 information
system to meet
stakeholders
activities needs.
and events.
 The
The Process
Process of
of
Providing
Providing Information
Information
STAKEHOLDERS
Internal: External:
Owners, Customers,
managers, creditors,
employees government
Prepare
accounting
5 reports for
stakeholders.
Accounting
Information
System
 Types of Businesses
Manufacturing
Manufacturing Business
Business

Product
Product
General
General Motors
Motors Cars,
Cars, trucks,
trucks, vans
vans
Intel
Intel Computer
Computer chips
chips
Boeing
Boeing Jet
Jet aircraft
aircraft
Nike
Nike Athletic
Athletic shoes
shoes and
and apparel
apparel
Coca-Cola
Coca-Cola Beverages
Beverages
Sony
Sony Stereos
Stereos and
and television
television
 Types of Businesses
Merchandising
Merchandising Business
Business

Product
Product
Wal-Mart
Wal-Mart General
General merchandise
merchandise
Toys R
Toys R Us
Us Toys
Toys
Circuit
Circuit City
City Consumer
Consumer electronics
electronics
Lands
Lands End
End Apparel
Apparel
Amazon.com
Amazon.com Internet
Internet books,
books, music,
music, video
video
retailer
retailer
 Types of Businesses
Service
Service Business
Business
Product
Product
Disney
Disney Entertainment
Entertainment
Delta
Delta Air
Air Lines
Lines Transportation
Transportation
Marriott
Marriott Hotels
Hotels Hospitality
Hospitality and
and lodging
lodging
Merrill
Merrill Lynch
Lynch Financial
Financial advice
advice
Sprint
Sprint Telecommunication
Telecommunication
There
There are
are three
three types
types of
of
business
business organizations
organizations
Proprietorship
Partnership
Corporation
A
Aproprietorship
proprietorship Advantages
isis owned
owned by
by one
one Ease in organizing
individual.
individual. Low cost of
organizing
Disadvantage
Joes Limited source of
financial resources
Unlimited liability
 Advantages
A
Apartnership
partnership isis More financial
owned
owned by
by two
two or
or resources than a
more
more individuals.
individuals. proprietorship.
Additional
management skills.
Joe and Martys Disadvantage
Unlimited liability.
 AAcorporation
corporation isis
organized
organized under
under state
state Advantage
or
or federal
federal statutes
statutes as
as aa The ability to obtain
separate
separate legal
legal entity.
entity. large amounts of
resources by issuing
stocks.
J & M, Inc. Disadvantage
Double taxation.
 Business
Business Strategies
Strategies
A business strategy is an integrated set of plans and
actions designed to enable the business to gain an
advantage over its competitors, and in doing so, to
maximize its profits.
Business
Business Strategies
Strategies
Under a low-cost strategy, a business designs and
produces products or services of acceptable quality
at a cost lower than that of its competitors.
Wal-Mart
Southwest Airlines
 Business
Business Strategies
Strategies

Under a differential strategy, a business

designs and produces products or services
that possess unique attributes or
characteristics which customers are willing
to pay a premium price.
Maytag
Tommy Hilfiger
Philippine
Philippine Financial
Financial
Reporting
Reporting Standards
Standards
(PFRS)
(PFRS)
The
The business
business entity
entity concept
concept
limits
limits the
the economic
economic datadata inin
the
the accounting
accounting system
system to to
data
data related
related directly
directly toto the
the
activities
activities of
of the
the business.
business.
The
The cost
cost concept
concept isis the
the
basis
basis for
for entering
entering the
the
exchange
exchange price,
price, or
or cost
cost
of
of an
an acquisition
acquisition in
in the
the
accounting
accounting records.
records.
 The
The objectivity
objectivity concept
concept
requires
requires that
that the
the accounting
accounting
records
records and
and reports
reports bebe based
based
upon
upon objective
objective evidence.
evidence.

The
The unit-of-measure
unit-of-measure
concept
concept requires
requires that
that
economic
economic data
data be
be
recorded
recorded in
in dollars.
dollars.
 Accounting Methods

Accounting methods dictate how the

company'stransactions are recorded in the
company's financial books
Cash-basis accounting companies record
expenses in financial accounts when the cash
is actually laid out, and they
bookrevenuewhen they actually hold the cash
Accrual accounting companies record
revenue when the actual transaction is
completed (such as the completion of work
specified in a contract agreement between the
company and its customer), not when they
receive the cash. Companies record any
expenses when they're incurred, even if they
 CASH BASIS ACCOUNTING
VS. ACCRUAL BASIS ACCOUNTING
CASH ACCRUAL
EVENT BASIS BASIS

1. VENDOR INVOICE RECEIVED IN DEC. 2016 2015

2015
(Paid in Jan. 2016)
2. CLIENT BILLED IN DEC. 2015 2016 2015
(Received cash in Jan. 2016)

3. INVENTORY RECEIVED IN DEC. 2015 2016 2015

(Paid in Jan. 2016)

4. PREPAYMENT RECEIVED IN DEC. 2005 2015 2016

(Services performed in Jan. 2016)
Basic Accounting Equation (HELLO)
 The
The Accounting
Accounting Equation
Equation
Assets = Liabilities + Owners Equity

The
The resources
resources
owned
owned by
by aa
business
business
The
The Accounting
Accounting Equation
Equation
Assets = Liabilities + Owners Equity

The
The rights
rights of
of the
the
owners
owners
 What are Assets?
Assets are resources owned by a business.
They are used in carrying out such activities
as production, consumption and exchange.
(1) it must be owned by the
organization, and
(2) it must have money value.
 Ownership and Money Value
OWNERSHIP is the exclusive right to
possess, use, enjoy, and dispose of
property.
MONEY VALUE exists if a buyer is
willing to pay money to a seller for
the
Cash
property.
Automob Rented Checks
Which of these
ile areApartme
assets?
nt
Computer Library Clothing Postage
Book On Stamps
Loan
 Excersice
Prepare a list of ten assets that you
personally own.
Prepare a list of ten assets that a business
organization would own
Types of Assets
Short Life (Current) vs. Long Life (Non-Current)
CURRENT ASSETS
Cash and other assists that can be turn into cash. (< 1yr)
INVESTMENTS
Assets not used on the operation of organization but have
value. (> 1yr)
PROPERTY, PLANT, AND EQUIPMENT
Long-term or long-life assets
INTANGIBLE ASSETS
No physical substance, but have value (long term)
 Examples of Assets
Cash
Receivables (Money people owe you)
Office Building
Furniture & Fixtures
Office Equipment
Office Supplies
Inventory
Vehicle
Bond Purchases
Copyright
Franchise
 Test your knowledge
1. What is the difference between office
supplies and office equipment?
2. A toner cartridge is considered an office
supply, even though it is an integral part
of the computer printer. why?
3. Will we replace a typewriter as frequently
as a typewriter ribbon? Why or why not?
4. What type of asset is a supply? (Short-life
or long-life?)
5. What type of asset is a computer? (Short-
life or long-life?)
 Recognizing Ownership
CAPITAL (EQUITY) is the
ownership of the assets of the
business by the proprietor.
Seed money
Machinery Purchased
Supplies
Cash
Furniture
 Example

Ms. Taylor began a business on

April I, 203, contributing to the
business the following assets:
Cash $3,000
Office Supplies $275
Office Equipment $700
Furniture and Fixtures $2,100
Ms Taylor Ownership is:
Hint: Assets = Capital
 Expressing Borrowed Assets
What if I borrow money to start my
business?
LIABILITY is defined as the ownership of
the assets of a business by its creditors.
A creditor claims against assets
Existing debts and obligations
No Debt:
Assets = Capital (Owners Equity)
Debt:
Assets = Liability + Owners Equity (Less
Capital)
 Examples of Liability (Debts)

Current Liabilities (less than 1 yr)

Accounts payable Invoiced bills
Accrued liabilities not yet invoiced
bills
Accrued wages compensation
earned but not yet paid.
Deferred revenue money not yet
earned.
Taxes Payable Taxes that need to
be paid
Long Term Liabilities
 Test your knowledge
A sole proprietor has $14,000 in
cash an borrows $6,000 more
from the local credit union to
start up a Child Care business.
How much cash does the sole
proprietor has?
Does that make him/her
richer?
Recording Investments and Drawings

Investments are the assets the owner puts

in the business increase owners equity
Purchase of a Car for the business
Initial public offering of a Corporation.
Investing in your Brothers Restaurant

Drawings are withdrawals of cash or other

assets by the owner for personal use .
Your Brother returns your investment with interest.
You take your car back from the company
 Revenues and Expenses
Revenues increases in owners
equity from business activities.
Sales receipts
Expenses decreases in owners
equity that result from operating the
business
Rent Payments
Administrative Expenses
Interest Expense
 How is Owners Equity
Affected?
INCREASES
DECREASES
Investments Withdrawals
by Owner by Owner
Owners
Equity

Revenues Expenses
 BALANCE SHEET
LIABILITIES:
ASSETS:
Current Liabilities:
Current Assets: Vendors Payables
Cash Loans and other Borrowings (<1
Accounts Receivable year)
Inventory Deferred Income
Prepaid Expenses Total Current Liabilities
Total Current Assets
Non-Current Liabilities:
Non-Current Assets: Loans and other Borrowings (>1
year)
Land
Building
TOTAL LIABILITIES
Leasehold
Improvements
Furniture & Equipment OWNERS EQUITY:
Total Fixed Assets Capital Stock Issued
Accumulated Earnings (Deficit)
TOTAL ASSETS TOTAL EQUITY
ASSETS = LIABILITIES + OWNERS EQUITY
NORMAL The sum of the increases in an
account is usually equal to or greater
BALANCE than the sum of the decreases in the
account. Thus, the normal balance of
an account is either a debit or a credit
depending on whether increases in
the account are recorded as debits or
credits.
DEBIT An accounting entry that
results in either an increase in
assets or a decrease in equity
or liabilities on a company's
balance sheet or in your bank
account.
CREDIT An accounting entry that either
decreases assets or increases
liabilities and equity on the
company's balance sheet.
JOURNAL
A Journal is a book in which transaction are
recorded in the order in which they occur
i.e. in chronological order.
A Journal is also called book of prime entry
because all transactions are entered first
in this book
The process of recording a transaction in
Journal is called a Journalizing
An entry made in Journal is called Journal
Entry
Journal
Book of original entry
Parts
Heading
Date column
Particulars
Folio or Reference
Debit
Credit

48
 LEDGER
Ledger is the principle book which contains all
accounts to which transactions recorded in the
book of original entry are transferred
The ledger is also called Book of Final Entry as
it is the ultimate destination of all transactions.
UTILITY OF LEDGER
It provides complete information of all accounts
in one book
It enables to ascertain what are the main items
of revenue
It enables to ascertain what are the main items
of expenses
It enables to ascertain which are the assets and
of what values
 FORMAT OF A LEDGER
(Name of the Account) Ledger
Folio No..
Date DEBIT
Particulars Folio Amount Date ParticularsCREDIT
Folio Amount
(Peso) (Peso)

POSTING
Posting is the process of transferring the
transactions recorded in the books of original
entry in the concerned accounts opened in
Ledger.
It may be done daily, weekly, fortnightly or
monthly according to the convenience and
requirements of the business.
Posting helps us to know the net effect of various
BALANCING
Balance of an account is the
difference between the total of
debit and total of credit appearing
in an account.
Balance signifies the net effect of
all transactions posted to that
account during a given period.
Normally, Personal and Real
accounts are balanced; Nominal
Accounts are closed by transferring
What is a business transaction?

A business transaction is an economic

event or condition that directly changes an
entitys financial condition or directly
affects its results of operations.
On June 1, 2015,
Clark Kent begins
a business that
will be known as
Superman Ent.
a. Clark
a. Clark Kent
Kent deposits
deposits P250,000
P250,000 in
in aa bank
bank account
account in
in
the name
the name of
of Superman
Superman Ent.
Ent.
Assets = Owners Equity
Cash Clark Kent, Capital
=
a. 250,000 250,000 Investment
by Clark Kent
b. Clark
b. Clark Kent
Kent exchanged
exchanged P200,000
P200,000 forfor land.
land.
frff
Assets = Owners Equity
Cash + Land Clark Kent, Capital
250,000 250,000
b. 200,000 +200,000 =
Bal. 50,000 200,000 250,000
c. During
c. During the
the month,
month, Superman
Superman Ent.
Ent. purchased
purchased
supplies for
supplies for P10,350
P10,350 and
and agreed
agreed to
to pay
pay the
the
supplier in
supplier in the
the near
near future
future (on
(on account).
account).
Owners
Assets = Liabilities + Equity
Accounts Clark Kent,
Cash + Supplies + Land Payable Capital
=
Bal. 50,000 200,000 250,000
c. + 10,350 + 10,350
Bal. 50,000 10,350 200,000 10,350 250,000
d. Supermam
d. Supermam Ent.Ent. provided
provided services
services to
to
customers, earning
customers, earning fees
fees of
of P7,500
P7,500 and
and
received the
received the amount
amount in in cash.
cash.
Owners
Assets = Liabilities + Equity
Accounts Clark Kent,
Cash + Supplies + Land Payable Capital
Bal. 50,000 10,350 200,000 = 10,350 250,000
d. + 7,500 + 7,500 Fees
earned
Bal. 57,500 10,350 200,000 10,350 257,500
e. Superman
e. Superman Ent
Ent paid
paid the
the following
following expenses:
expenses:
wages, P21,250;
wages, P21,250; rent,
rent, P8,000;
P8,000; utilities,
utilities,
P4,500; and
P4,500; and miscellaneous,
miscellaneous, P2,750.
P2,750.
Owners
Assets = Liabilities + Equity
Accounts Clark Kent,
Cash + Supplies + Land Payable Capital
Bal. 57,500 10,350 200,000 10,350 257,500
e. 17,500 2,250 Wages
=
8,000 Rent
4,500 Util.
2,750 Misc.
Bal. 40,000 10,350 200,000 10,350
240,000
f.f. Superman
Superman Ent.
Ent. paid
paid P6,350
P6,350 to
to creditors
creditors
during the
during the month.
month.

Owners
Assets = Liabilities + Equity
Accounts Chris Clark,
Cash + Supplies + Land Payable Capital
Bal. 40,000 10,350 200,000 = 10,350 240,000
f. 6,350 6,350
Bal. 33,650 10,350 200,000 4,000 240,000
g. At
g. At the
the end
end ofof the
the month,
month, the
the cost
cost of
of supplies
supplies
on hand
on hand isis P5,500,
P5,500, soso P4,850
P4,850 ofof supplies
supplies
were used.
were used.
Owners
Assets = Liabilities + Equity
Accounts Clark Kent,
Cash + Supplies + Land Payable Capital
Bal. 33,650 10,350 200,000 = 4,000 240,000
g. 4,850 4,850 Supplies
expense
Bal. 33,650 5,500 200,000 4,000 235,150
h. At
h. At the
the end
end of
of the
the month,
month, Clark
Clark withdrew
withdrew P20,000
P20,000
in cash
in cash from
from the
the business
business for
for personal
personal use.
use.

Owners
Assets = Liabilities + Equity
Accounts Clark Kent,
Cash + Supplies + Land Payable Capital
Bal. 33,650 5,500 200,000 = 4,000 235,150
h. 20,000 20,000 With-
drawal
Bal. 13,650 5,500 200,000 4,000 215,150
Effects
Effects of
of Transactions
Transactions on
on Owners
Owners Equity
Equity
Owners Equity

Decreased Increased
by by

Owners Owners
withdrawals investments
Expenses Revenues

Net
income
Accounting
Accounting reports,
reports, called
called
financial
financial statements,
statements,
provide
provide summarized
summarized
information
information to to the
the owner.
owner.
 Financial
Financial Statements
Statements
Income statementA summary of the
revenue and expenses for a specific
period of time.
Statement of owners equityA
summary of the changes in the owners
equity that have occurred during a
specific period of time.
Balance sheetA list of the assets,
liabilities, and owners equity as of a
specific date.
Statement of cash flowsA
 Superman Enterprises
Income Statement
For the Month Ended June 30, 2015
Fees earned P7 500 00
Operating expenses:
Wages expense P2 250 00
Rent expense 8 000 00
Supplies expense 4 850 00
Utilities expense 4 500 00
Miscellaneous expense 2 750 00
Total operating expenses 22 350 00
To
Tothe
the statement
statement
Net income (loss) (P14 850 00)
of
of owners
owners equity
equity
 Superman Enterprises
Statement of Owners Equity
For the Month Ended June 30, 2015
Chris Clark, capital, June 1, 2015 P 0
Investment on June 1 250 000 00
From
From the
the income
income
Net loss for June ( 14 850 00)
statement
statement 235 150 00
Less withdrawals 20 000 00
Increase in owners equity 215 150 00
Chris Clark, capital, June 30, 2015 To
Tothe
the P215 150 00
balance
balance sheet
sheet
 Superman Enterprises
Balance Sheet
From
From the
the
June 30, 2015 statement
statement of
of
Assets Liabilities owners
owners equity
equity
Cash P 13 650 00 Accounts Payable P 4 000 00
Supplies 5 500 00 Owners Equity
Land 200 000 00 Clark Kent, cap. 215 150 00
Total liabilities and
Total assets P219 150 00 owners equity P219 150 00

This balance sheet presented

using the account form
When
When thethe balance
balance sheet
sheet displays
displays
the
the liabilities
liabilities and
and owners
owners equity
equity
below
below thethe assets,
assets, the
the report
report form
form
isis being
being used.
used.
 Superman EnterprisesStatement of Cash Flows
For the Month Ended June 30, 2015

Cash flows from operating activities:

Cash received from customers P 7 500 00
Deduct cash payments for expenses
and payments to creditors (23 850 00)
Net cash flow from operating activities ( 16 350 00)
Cash flows from investing activities:
Cash payment for acquisition of land (200 000 00 )
Cash flows from financing activities:
Cash received as owners investment P250 000 00
Deduct cash withdrawal by owner ( 20 000 00)
Net cash flow from financing activities 230 000 00
Net cash flow and June 30, 2015 cash bal. P 13 650 00
Should
Shouldmatch
matchCash
Cashon
onthe
thebalance
balancesheet
sheet
 Statement
Statement of
of Cash
Cash Flows
Flows
Cash Flows from Operating ActivitiesThis section reports
a summary of cash receipts and cash payments from
operations.
Cash Flows from Investing ActivitiesThis section reports
the cash transactions for the acquisition and sale of relatively
permanent assets.
Cash Flows from Financing ActivitiesThis section reports
the cash transactions related to cash investments by the owner,
borrowings, and cash withdrawals by the owner.
Audited Financial Statement
San Miguel Corporation and Subsidiaries
Consolidated Financial Statements
December 31, 2011, 2010 and 2009
 Financial Position

2009 P 438,491 P 197,553 P 240,938

2010 P 829,800 P 562,975 P 266,825

2011 P 890,536 P 591,436 P 299,100

Financial Position
Analys
is
RETURN ON INVESTMENT

AVE.
YEAR NET INCOME ROI
INVESTMENT

2009 60,629 388,932 16%

2010 24,056 634,145 4%

2011 28,504 860,168 3%

 INTERNAL RATE OF
RETURN
Is the breakeven
rate of return
Minimum required
rate of return
Useful in making
decision whether to
accept or reject
some projects
If the IRR is higher
than the cost of
capital or ROI the
project is
INTERNAL RATE OF RETURN
Is the breakeven rate
of return
Minimum required
rate of return
Useful in making
decision whether to
accept or reject some
projects
If the IRR is higher
than the cost of
capital or ROI the
project is acceptable
INTERNAL RATE OF INTERNAL RATE OF
RETURN
Very important RETURN
Very important tool
tool in capital in capital
budgeting budgeting whether
whether to accept to accept or reject
or reject certain certain project.
project.
 Statement of Cash flows
Provide information about the
movement of cash with the
following 3 activities;
 Tools for Financial
Analysis and Interpretation
The
The ratio
ratio of
of liabilities
liabilities to
to owners
owners
equity
equity allows
allows owners
owners like
like Clark
Clark Kent
Kent
to
to analyze
analyze the
the firms
firms ability
ability to
to
withstand
withstand poor
poor business
business conditions.
conditions.

Ratio of Total Liabilities

liabilities to =
Total owners equity (or total
owners equity
stockholders equity)
Tools for Financial Analysis and Interpretation
Ratio of liabilities to P 4,000
=
owners equity P215,150
Ratio of liabilities to
= 1.86%
owners equity
Exercise
A. L. Brandon is the owner of the Brandon
Small Appliance Repair Shop. On January I,
2013, the assets, liabilities, and proprietor's
capital in the business were:
Cash, $2,000; Accounts Receivable S400;
Supplies, $5OO; Equipment $6,000;
Accounts Payable, S900; A. L. Brandon
Capital $8,000.
 January Accounting Events
1. Paid $3OO of the outstanding accounts
payable.
2. Received $100 on account (part payment) from
customers.
3. Purchased $250 worth of supplies on account
(on credit}.
4. Returned a defective piece of equipment that
was purchased last month and received a cash
refund of $1,200.
5. Borrowed $1,OOO from a supplier, giving word
to repay the loan in
thirty days.
6. Paid creditor $200 on account (part payment).
7. Purchased equipment for $800, giving $200
 INTERNAL CONTROLS SEGREGATION
OF DUTIES
OWNER BUSINESS
Customers: MANAGER/ACCOUNTANT
Send Invoices Customers:
Review Accounts Prepare and Post Invoices
Receivable Aging Prepare Accounts
Report Receivable Aging Report
Send Reminder Prepare Reminder Invoices
Invoices to Past-due to Past-due Customers
Customers Prepare Credits and
Approve Credits and Discounts
Discounts
Cash In: Cash In:
Open Mail/Receive Record Customers Deposits
Cash/Checks
 INTERNAL CONTROLS SEGREGATION OF
DUTIES

OWNER BUSINESS
Vendors/Cash Out: MANAGER/ACCOUNTAN
T
Approve Vendors
Invoices Vendors/Cash Out:
Sign Checks Record Vendors Bills to
Pay (accrual basis)
Prepare Checks
Mail Signed Checks
Bank Statements:
Bank Statements:
Prepare Statements
Review Bank (operating, payroll, etc.)
Statements
Reconciliation Disburse Petty Cash
Review Petty Cash Prepare Petty Cash
Reconciliation
 INTERNAL CONTROLS SEGREGATION OF DUTIES

OWNER BUSINESS
Employees: MANAGER/ACCOUNT
Sign Employee ANT
Contracts Employees:
Approve Employee Prepare Payroll Sheets
Time Sheets and Payroll Journals
Distribute Payroll Record Payroll
Checks Payments
Investment Investment
Securities: Securities:
Approve Securities Post Securities
Transactions Transactions
Review Securities Prepare Securities
 INTERNAL CONTROLS
BUSINESS
SEGREGATIONMANAGER/ACCOUNTANT
OF DUTIES
OWNER Insurance:
Insurance: Prepare Insurance
Reports
Review Insurance Financial
Reports Reports/Budgets:
Financial Post Entries to General
Reports/Budgets: Ledger
Give Inputs and Prepare Annual Budget
Review Annual With Owner Inputs
Budget Prepare Financial
Review Monthly Reports:
Financial Reports (P&L, balance sheets,
cash flow)
Give Inputs and
Prepare Revised Annual
Review P&L
 BUSINESS RECORDS LIST OF MAJOR
FILES
BUSINESS RECORD FILE
Vendors Invoices Alphabetically
Customers Files Alphabetically
Bank Statements, Cancelled Checks, Deposit By Month
Slips

Payroll Reports and Tax Payments By Month

By Quarter

Employee File Alphabetically

Insurance Files Alphabetically
Financial and Tax Reports By Year
Permanent Files Alphabetically
 10 COMMON CAUSES OF BUSINESS
FAILURE
1. Lack of Industry Experience and
Knowledge
2. Insufficient Start-up Money
3. Failure to Understand Market and
Customers
4. Poor Employee Management Skills
5. Wrong Location
6. Improper Pricing of Product or Service
7. Failure to Understand and React to
Competition
8. Incorrect Cash-Flow Estimates (Poor
Budgeting)
 References:
PFRS (Philippine Financial Reporting
Standard)
IFRS (International Financial Reporting
Standard)
Financial Reporting (Theory and
Practice) 2012 Edition Volume 1; Zues
Vernon B. Milan
Management Advisory Services 2012
Edition (Franklin Agamata)
www.sanmiguel.com.ph
 (032) 422-1119 GLOBE
(032)239-4339, 511-7582 PLDT
(Globe) 0917-634-2738Email
address:asterisknowledge@ymail.com

Thank you for your time

R. P. MORA & CO., CPAs

Telefax No: (032) 520-5814
(032) 412-4613
Email address: rheneir@rpmora.com
Website: www.rpmora.com
Address:
No.95 RCDC Centrum
Gorordo Ave., Cebu City