2. LEARNING OBJECTIVES
• AAccounting – A I f
ti An Information system
ti t
• History of accounting
• UUsers of A
f Accounting I f
ti Information
ti
• Role of accounting
•TTypes of accounting
f ti
3. Accounting
g
- a process of identifying,
recording, summarizing, and
di i i d
reporting economic
information to decision
makers.
makers
3
4. ACCOUNTING –
THE LANGUAGE OF BUSINESS
Accounting is the information system that...
measures business activities,
processes data into reports, and
communicates results to decision makers.
4
5. The primary objective of
accounting is to p
g provide
useful information for
decision
d i i makers.k
7. A HISTORY OF ACCOUNTING
Account records date back to the
ancient civilizations of China,
Babylonia, Greece, and Egypt.
y gyp
The rulers of these civilizations used
accounting to keep track of the cost of
labour and materials used in building
structures like the great pyramids.
7
8. Accounts Table
with Cuneiform
Script,
S i t
circa 2400 BC
by Mesopotamian
y p
Bookkeeper
8
9. A HISTORY OF ACCOUNTING
Accounting developed further as a result of the
g p
information needs of merchants in the city-states of Italy
during the 1400s.
The
Th monk Luca Pacioli, a mathematician and friend of
kL P i li th ti i df i d f
Leonardo da Vinci, published the first known description
of double-entry bookkeeping in 1494.
9
10. A HISTORY OF ACCOUNTING
In the Industrial Revolution of the nineteenth
century, the growth of corporations spurred the
development of accounting.
The corporation owners—the shareholders—
were no longer necessarily the managers of their
business.
Managers had to create accounting systems to
report to the owners how well the company was
h h ll h
performing
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11. HISTORY OF ACCOUNTING IN MONGOLIA
1911 . Governing by Bogd Khan
1924 -1964.Memorial order
1964-1990 . Journal order
1993 . Law of “Accounting “.
13. Types of accounting
f
Financial Cost and Tax accounting
accounting g
management
accounting
14. DIFFERENCE
Financial Management
accountingg accounting
g
Primary users External users Internal users
Purpose of
p Helpp Help managers
p g
information information plan and control
users make business
decision operations
Timing Information Information
about past
p about future
performance performance
Type of report Financial Internal reports
statements
t t t not regulated by
t g l t db
regulated by GAAP
GAAP
15. Users of Accounting Information
• investors
investors
• creditors
creditors
di
• regulators
regulators
• customers
EXTERNAL USERS
• customers
competitors
competitor
s
15
16. Users of Accounting Information
• investors
• Creditors
C di
• Regulators
EXTERNAL USERS • Customers
• owners
Owners
INTERNAL USERS • managers
Managers
• employees
Employees
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17. GAAP- Generally accepted accounting p
y p g principles
p
The FASB currently sets accounting standards.
IAS -40 standards
IFRS-8 standards
Laws in Mongolia in field of accounting:
Accounting law
Audit law
Tax laws
T l
18. Organizations That constitute the body of GAAP in
g y
Mongolia.
Ministry of Finance
Mongolian Institute of Certified Public
Accountants
19. FORMS OF BUSINESS ORGANIZATION
Sole proprietorship
p p p
Partnership
Corporation
