This document provides an introduction to basic accounting concepts. It defines accounting as the process of recording and reporting financial information. It categorizes accounts into assets, liabilities, owner's equity, expenses and revenues. Assets are economic resources owned and are classified as current or non-current. Liabilities represent amounts owed and are also current or long-term. Owner's equity represents the owner's claim. Revenues are increases in assets from main operations and expenses are decreases in assets or incurrences of liabilities from revenue generation activities. Financial statements and accounting information are important for decision making.

1. BASIC OF ACCOUNTING
1. Definition of accounting
2. The important of financial management
3. Categorization of Asset, Liabilities, Owner
Equity, Expenses & Revenue

2. Financial Statement
• Business financial affairs should be managed
efficiently and carefully.
• cash flow (money in and out) should be recorded.
• Significant accounting skills are needed to ensure
the flow of revenue and expenditure is recorded
in detail (the preparation of financial statements)
• Complete financial records will help financial
managers make decisions and prepare the budget
in the future.

3. What is Accounting?
• The process of providing information about the
financial position and results of the operations of an
entity to assist the interested parties to make a
decision.
• Involves the process of identifying, measuring,
recording, classification, summarize, collecting,
reporting and analysing
• Accounting is to provide decision makers with useful
information about economic activities, such as
managing business, making investments or deciding
how to spend the money.

4. Accounting …
• Accounting also provides both information :
- about current activities, and
- forecast of what may happen in the future.
• All types of decision makers (managers, investors,
and consumers) use accounting information as a
basis for making economic decision.

5. User of Accounting Information :
1. Shareholders of the company
2. Employee group
3. Management team
4. Bankers
5. Trade creditors and suppliers
6. The analyst / adviser
7. Government body

6. The Important of Accounting Information
To give a view of picture regarding to :
- the financial performance,
- the financial position and
- the liquidity of the company cash flows.

7. The purposes of recording and analyzing
accounting information :
1. The memory of human is limited. As a result, record of the
business transactions will be easy for the future reference.
2. To ensure the financial position of an organization in order to find
out whether the company is in profit / loss situation.
3. Management responsibility are keep on complicated (especially
in a large organization).
If the business transactions do not properly recorded, the
financial report will not give a true and fair view to the users of
accounting information.

8. The Important of Financial Management
• To ensure the company goals can be achieved
- maximizing shareholders wealth, maximize profits and
minimize costs.
• To achieve financial objectives
- Managing current assets and current liabilities as well
- cash flow meet the company’s vision and goal
- Plan financial suit with the company’s funds
- Planning budget

9. The Important of Financial Management
• Sources of financial can be used as best as possible
- Control the flow of business financial resources and
expenses as well as possible.
• Find alternative investments that promise high
returns and reduce risk of loss.
- Obtain the higher rate of return on investments and
profits from an investment made.
• Accelerate return on capital
- Having the chance to speed up the cycle of business
capital

10. Categorization of Asset, Liabilities,
Owner Equity, Expenses and Revenue
Assets Account
• Account used to record the economic resources or property
owned by a business entity.
• Asset account is divided into two, current assets and non-
current assets.
• Current assets are assets that are easily converted into cash.
Examples of current asset account such as cash accounts,
bank accounts, stock/inventory accounts, accounts
receivables, accounts revenue receivable and accounts
prepaid expenses.
• While non-current assets are assets that take time to be
converted into cash. For example, machine account, vehicle
account, furniture account, building account, equipment
account and investment account.

11. Categorization of Asset, Liabilities,
Owner Equity, Expenses and Revenue
Liability Account
• Account used to record the amount of business debt to
external parties.
• Liability account is divided into two, current liabilities
and long-term liabilities.
• Current liabilities are liabilities that can be solved in the
short term or less one year. Example of current liability
accounts are accounts payables, bank overdrafts,
accounts expenses payable, and prepaid revenue
account.
• While long-term liabilities are liabilities or the debt that
will take more than a year to complete, such as loans and
mortgage accounts.

12. Categorization of Asset, Liabilities,
Owner Equity, Expenses and Revenue
Capital Account (Owner Equity)
• Account used to record business debt to business
owners such as initial capital.
Revenue Account
• Account used to record the amounts received or
receivable from the sale of goods or services (the main
activity of the entity) in one accounting period.
• Examples of revenue such as sales revenue account,
accounts receivable, rent account and received
commission account.

13. Categorization of Asset, Liabilities,
Owner Equity, Expenses and Revenue
Expenses Account
• Account used to record the expenses involved or
used to derive the above revenue.
• Examples of expense accounts such as rental
expense accounts, travel expenses account,
commission expenses, advertising expenses,
insurance expenses, utility expenses (telephone,
water and electricity) and expenses of wages and
salaries.

14. THANK YOU…
ANY QUESTIONS?