• Accounting involves the activities of identifying, measuring, and communicating information that is useful in making economic decisions.
• Recognition refers to the process of incorporating the effects of an accountable event in the financial statements through a journal entry.
• External events are events that involve an entity and another external party. It includes (a) exchanges, (b) non-reciprocal transfers, and (c) external events other than transfers.
• Internal events are events that do not involve an external party. It includes (a) production and (b) casualties.
• Measuring is the accounting process of assigning numbers, commonly in monetary terms, to the economic transactions and events. Several measurement bases are used in preparing financial statements.
• Financial accounting is the branch of accounting that focuses on the general purpose financial statements.
• General purpose financial statements are those that cater to the common needs of a wide range of external users.
• External users are those who do not have the authority to demand financial reports tailored to their specific needs, i.e., those who are not involved in managing the entity.
• The four sectors in the practice of accountancy are:

(a) public practice,

(b) commerce and industry,

(c) academe, and

(d) government.

• The reporting standards used in the Philippines are the PFRSs, which are based on the IFRSs. The PFRS Accounting Standards consist of the following: (1) PFRSs, (2) PASs and (3) Interpretations.
• The Financial and Sustainability Reporting Standards Council (FSRSC) is the official accounting standard setting body in the Philippines.
• Financial reporting standards continuously change primarily in response to users’ needs.