 Process of identifying, measuring, and recording of business transactions and business events in monetary term and communicating the financial information.

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 Process of identifying, measuring, and recording of business transactions and business events in monetary term and communicating the financial information to the interested parties. (Frank Wood & Alan Sangster)  Concerned with the provision of information – useful to those who directly or indirectly connected with an organization.

 To record and control the business transactions  To maintain accuracy in recording  To meet the requirement of the law  To present final accounts to the owners of the business  To facilitate the efficient allocation of resources

 2 categories; - Internal – those who work in the organization; owners, managers & employees - External – those who indirectly involved with the organization; creditors/bankers, potential investors, government & customers Bookkeeping vs Accounting… Process of recording – just part of accounting process

UsersUses Owner - Interested in the profits - Financial stability & growth of the business Managers - Guide them in planning, organizing, controlling the organization - Evaluate the management/decisions Employees - Interested in the business ability to progress & expend - Look for steady employment, benefits Creditors/bankers - Ability of the business in repaying the amount owing to them Potential investors - Solvency & financial strength of the business - Present & future earning capacity Government - Tax purposes Customers - Good accounting control – reduce cost –reduce prices of the products

Transactions Source doc Journals Ledgers Trial Balance Adjustments Financial Statements

Sole ProprietorPartnershipLimited Companies Registration Business Registration Act 1957 Companies Act 1965 CapitalOwner Partners – partnership agreement Shareholders Ownership1 Prof – 2-50 Non prof – 2-20 Sdn. Bhd. – 2-50 Bhd – 2- infinity Management & control OwnerPartners or board BOD appointed by shareholders LiabilityUnlimited Limited Profit & LossOwner Partners – profit-sharing ratio Dividend Books & accounts No legal obligation to keep the books & prepare accounts Proper books of account must be kept and annual accounts must be send to the Commissioner of Company