The Beauty of Mentawai Islands

Earthquake and tsunami happened on Oct 25, 2010 have destroyed almost all Mentawai Islands, included tourism sector which is the main income for these islands.
Mentawai, outer islands of West Sumatera Province, Indonesia, have very beautiful panorama and unique community custom. There are four islands in Mentawai populated: Siberut, Sipora, North Pagai, and South Pagai. Majority population is Mentawai Tribe that has traditions maintained from generation to generation, since Neolithic age.

Mentawai Tribe maintains the tradition to tattoo their body. Mentawai tattoos are well known around the world, and become one of the oldest tattoos in the world. Every tattoo printed in their body becomes part of self identity, social symbol, work, and natural meaning.

How to Download Your Free Yahoo! Email Service Into Ms Outlook

As we all know, Yahoo free email service does not have POP3 feature to download email messages to clients’ computer disk. All email messages are saved in Yahoo server, in which it is difficult for us to read them while the internet is off. Yahoo POP3 feature can only be applied by those who pay for that.

Cheese Banana Spring Roll

For those who like cooking must try this recipe at home. Simple recipe and easy to cook, cheese banana spring roll.

Cheese banana spring roll is a kind of cake made from banana, spring roll wrapper, and cheese. It is very delicious. You can try this at home. All the stuffs are ready to prepare for you. How to make it? Here they are.

Christmas Songs 2010 Special Edition

Christmas celebration can not be separated from its beautiful songs. The days before Christmas, usually 14 to 10 days before, are celebrated with many kind of Christmas songs and products. Many types of superstores, shops, and hotels are offering their discounted products or services and at the same time playing Christmas songs. Some are playing cheerful Christmas songs, while some others are playing affectionate ones.

Accounting Method

    An entity can record the transactions under two methods:

Cash basis

    Under the cash basis, transactions and other events are recognized when cash or its equivalent is received or paid. Revenue is recognized and recorded when cash is received and expense is recognized and recorded when cash is paid. Both revenue and expense are reported during the period to which they received and paid. 

    The cah basis is simple, since the transactions are recorded based on actual cash flow (in/out). This method is applied suitably for the small or cash based company.

Accrual Basis

    Under the accrual basis, transactions and other events are recognized when they occur (and not as cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate. Financial statements prepared on the accrual basis inform users not only of past transactions involving the payment and receipt of cash but also of obligations to pay cash in the future and of resources that represent cash to be received in the future. Hence, they provide the type of information about past transactions and other events that is most useful to users in making economic decisions.
    IFRS-Framework require the accrual basis to be applied to in order to meet the objective of financial statement.

Related Post : Qualitative Characteristics of  Accounting Information (FASB-CON No 2) Qualitative Characteristics of Financial Statements (IASB-IFRS Framework) Users of Financial Statements (IASB-IFRS Framework) Basic Accounting Principle Objectives of Financial Reporting by Business Enterprises (FASB-CON No 1)

Qualitative Characteristics of Accounting Information (FASB-CON No 2)

    In 1980, The FASB pronounced a Statement of Financial Accounting Concept (SFAC/CON 2) regarding the Qualitative Characteristics of Accounting Information.

Qualitative Characteristics of Financial Statements (IASB-IFRS Framework)

    Qualitative characteristics are the attributes that make the information provided in financial statements useful to users. The four principal qualitative characteristics are understandability, relevance, reliability and comparability.

Understandability

    An essential quality of the information provided in financial statements is that it is readily understandable by users. For this purpose, users are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence. However, information about complex matters that should be included in the financial statements because of its relevance to the economic decision-making needs of users should not be excluded merely on the grounds that it may be too difficult for certain users to understand.

Basic Accounting Principle

1. Business Entity

All the business transactions of a sole proprietorship shall be recorded separately from the business owner's personal transactions. For legal purposes, a sole proprietorship and its owner are considered to be one entity, but for accounting purposes they are considered to be two separate entities.

2. Monetary Unit

Economic activity is measured in currency unit, so that all the business transactions shall be recorded in currency unit. 

3. Periodicity

All the transactions shal be allocated and recorded to a given period of time. If cover several periods, they must be allocated and recorded proportionally based on the period of time.

Users of Financial Statements (IASB-IFRS Framework)

The users of financial statements include present and potential investors, employees, lenders, suppliers and other trade creditors, customers, governments and their agencies and the public. They use financial statements in order to satisfy some of their different needs for information. These needs include the following:

1. Investors. The providers of risk capital and their advisers are concerned with the risk inherent in, and return provided by, their investments. They need information to help them determine whether they should buy, hold or sell. Shareholders are also interested in information which enables them to assess the ability of the entity to pay dividends.
2. Employees. Employees and their representative groups are interested in information about the stability and profitability of their employers. They are also interested in information which enables them to assess the ability of the entity to provide remuneration, retirement benefits and employment opportunities.
3. Lenders. Lenders are interested in information that enables them to determine whether their loans, and the interest attaching to them, will be paid when due.
   
   

The History of Accounting

According to Wikipedia, Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found in the Middle East. The people of that time relied on primitive accounting methods to record the growth of crops and herds. Accounting evolved, improving over the years and advancing as business advanced.

In 1494, Luca Pacioli (Friar Luca dal Borgo), an Italian Monk and mathematician, wrote a book entitled "Summa de Arithmetica Geometria Proportioni et Proportionalita” meaning "Everything About Arithmetic, Geometry and Proportion". This was the fifth book he wrote and now accepted as the first accounting text book. He introduced a double entry accounting used by business and trade. There were approximately 36 chapters written to bookkeeping, accounting, and other general methods of conducting business. Pacioli wrote the double-entry accounting system in great detail and explained how it was applied to business during his time. By the time Pacioli wrote his book, the double-entry accounting system was in use in Italy for at least 100 years. At the time, the double-entry method of accounting was known as "the method of Venice". Today, it is commonly known as "double-entry accounting". 

What is Accounting?

Accounting can be defined in many ways. Some people say Accountancy (British English) or accounting (American English) is the process of maintaining, auditing, and processing financial information for business purposes. Wikipedia says Accountancy is the art of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the financial´s form statements that show in money terms the economic resources under the control of management; the art it self lies in selecting the information that is relevant to the user and is reliable.

Statement of the Accounting Principles Board No. 4 defines, “Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions—in making reasoned choices among alternative courses of action.”

According to the Committee on Terminology of American Institute of Certified Public Accountants (AICPA), “Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are in part at least, of a financial character, and interpreting the results thereof”.

The American Accounting Association defines accounting as "the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by users of the information!”

Accounting is the process of financial reporting of an economic or a business entity using generally accepted standards or principles with the objective is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.