2019 BAR EXAM RESULTS

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People vs. Gallo

People vs. Gallo

 G.R. No. 124736. September 29, 1999.*

 PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROMEO GALLO y IGLOSO, accused-appellant.

FACTS:

That on or sometime in the period of May, 1994 in the Municipality of Cardona, Province of Rizal, Philippines the above named accused, with lewd designs and by means of force or intimidation, did then and there willfully, unlawfully and feloniously have sexual intercourse with a 13 year old girl, Marites Gallo y Segovia.

The above indictment has not specifically alleged that accused-appellant is the victim’s father; accordingly, accused-appellant’s relationship to the victim, although proven during the trial, cannot be considered to be a qualifying circumstance.

ART. 63. Rules for the application of indivisible penalties.—In all cases in which the law prescribes a single indivisible penalty, it shall be applied by the courts regardless of any mitigating or aggravating circumstances that may have attended the commission of the deed. (Revised Penal Code)

The Regional Trial Court, Branch 68, of Binangonan, Rizal, imposed the penalty of death upon accused-appellant Romeo Gallo y Igloso after finding him guilty beyond reasonable doubt of the crime of qualified rape, and affirmed by the Court of Appeals.

On 24 August 1999, accused-appellant filed a “Motion to Re-open Case (with Leave of Court)” seeking a modification of the death sentence to Reclusion Perpetua. On the grounds of the new Court rulings which annunciate that the seven attendant circumstances introduced in Section 11 of Republic Act No. 7659 partake of the nature of qualifying circumstances that must be pleaded in the indictment in order to warrant the imposition of the penalty.

ISSUE:

Whether or not Republic Act 7659 should be considered as special qualifying circumstances?

HELD:

Yes, the additional attendant circumstances introduced by Republic Act 7659 should be considered as special qualifying circumstances distinctly applicable to the crime of rape and if not pleaded as such could only be appreciated as generic aggravating circumstances.—The Court in the case of People vs. Garcia, speaking through then, Justice Florenz D. Regalado, ratiocinated that the additional attendant circumstances introduced by R.A. 7659 should be considered as special qualifying circumstances distinctly applicable to the crime of rape and, if not pleaded as such, could only be appreciated as generic aggravating circumstances.

The Office of the Solicitor General, when requested to comment on the aforesaid motion of accused-appellant, had this to state:

“Judicial decisions applying or interpreting the law or the Constitution shall form part of the legal system of the land (Article 8, Civil Code of the Philippines). Medina, which has the force and effect of law, forms part of our penal statutes and assumes retroactive effect, being as it is, favorable to an accused who is not a habitual criminal, and notwithstanding that final sentence has already been pronounced against him (Article 22, Revised Penal Code).

The Court agrees with the Office of the Solicitor General and sees merit in it, thus the motion to re-open the case is GRANTED and the decision sought to be reconsidered is MODIFIED by imposing on accused-appellant the penalty of reclusion perpetua in lieu of the death penalty.

People vs. Valdez

G.R. No. 127663. March 11, 1999.*

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROLANDO VALDEZ, accused-appellant.

MELO, J.:

 

 

FACTS:

On September 17, 1995, at around 8:00 in the evening, William Montano (16 years old), Randy Tibule (17 years old), Jean Marie Garcia, Willie Acosta, Sandra Montano and Ramon Garcia, Jr. were at the house of Randy Tibule in Manaoag, Pangasinan. They were discussing how to go to the wedding party of Jean Marie’s cousin in Sitio Cabaoangan (TSN, June 11, 1996, pp. 7-8; June 18, 1996, pp. 23-24).

After discussion, they rode in the tricycle driven by Ramon Garcia going to Cabaoangan. Behind Garcia were Tibule and Willie. Jean was seated inside the side car with Sandra and William Montano (TSN, June 11, 1996, pp. 7-11; TSN, June 18, 1996, pp. 23-25). After making a turn along the barangay road leading to Sitio Cabaoangan, they met appellant Rolando Valdez and his companions who were armed with guns. The tricycle’s headlight flashed on their faces. Without warning, they pointed their guns and fired at Montano’s group. Thereafter, after uttering the words, “nataydan, mapan tayon” (They are already dead. Let us go), Valdez and companions left (TSN, June 11, 1996, pp. 11-14).

The shooting incident left Ramon Garcia, Jean Marie Garcia, Sandra Montano and Willie Acosta dead

On the other hand, William Montano and Randy Tibule survived the attack. They suffered serious gunshot injuries that could have caused their death were it not for the timely medical attention given them.

In its decision dated October 24, 1996, the trial court rendered a judgment of conviction

the accused ROLANDO VALDEZ y LIPURDA, GUILTY beyond reasonable doubt of the crime of MULTIPLE MURDER WITH DOUBLE FRUSTRATED MURDER defined and penalized under Republic Act No. 7659 otherwise known as the Heinous Crime Law, the offense having been a complex crime the penalty of which is in the maximum, and with the attendant aggravating circumstances of evident premeditation and abuse of superior strength, hereby sentences him the ultimum supplicum of DEATH to be executed pursuant to Republic Act No. 8177 known as the Lethal Injection Law, to pay the heirs of the deceased.

ISSUE:

Whether or not the accused-appellant committed a complex crime of multiple murder with double frustrated murder?

HELD:

No, the case does not fall under complex crime:

The concept of a complex crime is defined in Article 48 of the Revised Penal Code, to wit:

ART. 48. Penalty for complex crimes.—When a single act constitutes two or more grave or less grave felonies or when an offense is a necessary means for committing the other, the penalty for the most serious crime shall be imposed, the same to be applied in its maximum period. (As amended by Act No. 4000.)

The case at bar does not fall under any of the two instances defined above. The Office of the Provincial Prosecutor of Pangasinan erroneously considered the case as falling under the first. It is clear from the evidence on record, however, that the four crimes of murder resulted not from a single act but from several individual and distinct acts. For one thing, the evidence indicates that there was more than one gunman involved, and the act of each gunman is distinct from that of the other. It cannot be said therefore, that there is but a single act of firing a single firearm.

People vs. Bracamonte G.R. No. 95939

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. FLORENTINO BRACAMONTE y ABELLAR, MANUEL REGINALDO y SAPON, and ERNIE LAPAN y CABRAL alias ERNING BULAG, defendants-appellants.

 G.R. No. 95939. June 17, 1996

 HERMOSISIMA, JR., J.:

 FACTS:

In this case is an APPEAL from a decision of the Regional Trial Court of Cavite City, Br. 17.

That on September 23, 1987, at about 8:30 in the evening, Violeta Parnala and her common-law husband, Clark Din, arrived home from the Kingdom Hall of Jehovah’s Witnesses. She rang their doorbell and when she got no response, she pounded on the garage door while her husband went to the back of their house and stoned the window of their son’s room. Then, she heard somebody trying to remove the padlock of the garage door and saw a man, prompting her to shout, “magnanakaw, magnanakaw.” After the door was opened, three (3) men rushed out, one after the other, whom she recognized as appellant Bracamonte, Ernie Lapan and Manuel Reginaldo.

Upon hearing his wife shouting, Clark Din rushed to her and saw a man about to turn at the other street. He ran after him but could not catch up. He thus proceeded back to their house. By this time, some of their neighbors, roused by the shouting of Violeta, came out of their houses, among whom were Pat. Sahagun and Pat. Punzal. The two (2) policemen went with Clark Din inside the house and saw the television set on. Din opened the bathroom where he saw their maid, Teresita M. Rosalinas, hands tied with her mouth gagged, and bathed in her own blood. Thereafter, he saw their son, Jay Vee Parnala, in the dirty kitchen, his head and body immersed in a pail of water, dead.

On October 6, 1987, the 2nd Asst. City Fiscal for the City of Cavite accused the appellants with the crime of Robbery with Double Homicide

The Regional Trial Court of Cavite City, Branch XVII, rendered judgment on September 21, 1990 finding appellant guilty beyond reasonable doubt of the crime of Robbery with Double Homicide and he is hereby sentenced to RECLUSION PERPETUA, to indemnify the heirs of Jay Vee Parnala and Teresita Rosalinas the amount of P30,000 each and to pay unto Violeta Parnala P1,040.00 corresponding to the value of the articles lost without subsidiary imprisonment in case of insolvency and to pay the cost.

ISSUE:

• Whether or not the crime committed constitute a complex crime?
• Whether or not death penalty could be imposed in the case?

Held:

• Yes, the crime committed constitutes a complex crime of robbery with homicide.

In the complex crime of robbery with homicide, the penalty prescribed is not affected by the number of killings accompanying the robbery though the multiplicity of victims slain is appreciated as an aggravating circumstance.

The Court notes that appellant, together with his two (2) other co-accused, were charged and convicted of robbery with double homicide. The charge and the corresponding conviction should have been for robbery with homicide only although two persons were killed. The multiplicity of victims slain is appreciated as an aggravating circumstance.

• No, death penalty could not be imposed in the case.

Although Republic Act No. 7659 reimposed the death penalty for certain heinous crimes, including robbery with homicide, the capital punishment could not be imposed in the case at bench. The crime here was committed way back in September 23, 1987, while R.A. No. 7659 took effect only on December 31, 1993. To impose upon appellant the death penalty would violate the basic rule in criminal law that, if the new law imposes a heavier penalty, the law in force at the time of the commission of the offense shall be applied, which in this case is Article 294(1) of the Revised Penal Code sans the death penalty clause by virtue of Section 19(1), Article III of the 1987 Constitution which provides, viz:

 

 

People vs. Muñoz G.R. Nos. 38969-70 February 9, 1989

People vs. Muñoz

G.R. Nos. 38969-70

February 9, 1989

 

CRUZ, J:

 

FACTS:

 

In the morning of June 30, 1972, in Balite Sur, San Carlos City, Pangasinan, Eleven persons, most of them bodyguards of the town mayor, went out in a jeep at the behest of one of them who had been complaining of having been victimized by cattle rustlers. Having found their supposed quarry, Feliciano Muñoz, accused, Marvin Millora, Tomas Tayaba, Jose Mislang, defendants-appellants and other seven unidentified men went to the house of Mauro Bulatao and asked for the address of his son Arsenio. All four of them went inside while the rest surrounded the house. All eleven were armed. Mauro was called by the accused and while he approached under his house, he met Millaro who simply shot him at arm’s length with a long firearm, hitting him in the mouth and killing him as he fell. At that precise time, Muñoz, Tayaba and Mislang were standing by Millora evidently giving him armed support. None of them made any move to restrain or dissuade him.

 

After killing Mauro, all four dragged out Aquilino, his sixteen-year-old son, and knock him down. Muñoz kicked him several times in the head as he lay on the ground while the others look on in silent approval or at least without objection. Then they took the bleeding man with them and look for their third target, Alejandro Bulatao.

 

In Alejandro’s house, the group force his wife, Juana to go with them and direct them to her husband. They found him and Muñoz ordered Alejandro and his wife to lie down and then shot Alejandro twice in the head, killing him instantly. Millora, Tayaba, and Mislang, along with companions, merely stood by as the brutal act was committed. Juana watched her husband’s death.

 

The second victim, Aquilino, was entirely defenseless while Muñoz again brutally kicked him as the others looked on. Finally, the accused ended the boy’s agony and shot him to death, hitting him in the head and body. Leaving the terrified Juana with the two grisly corpses.

 

The trial judge found Millaro guilty as principal for murder and Muñoz and the other two herein appellants only as accomplices in Criminal Case No. 0176, while in Criminal Case No. 0177 and 0178, Muñoz was found guilty as principal and the herein appellants only as accomplices for murder.

 

ISSUE:

 

Whether or not the accused, defendant-appellant, and seven unidentified men where equally liable for murder?

 

HELD:

 

All of them are equally liable for equal degree with the others for each of the three killings.

 

We affirm the findings of the trial Judge, who had the opportunity to observe the witnesses at the trial and assess their credibility. We agree that the three appellants, together with Muñoz and their seven other companions participated in the killings of the three Bulataos. However, we do not accept the different degrees of participation assigned by the court a quo to each of the appellants in each of the three offenses imputed to them.

 

The trial court said that there was no evidence of conspiracy to justify holding each of the accused equally liable for the three murders.

 

We hold that there was. Indeed, it is clear that from the very start, when the eleven went out to look for the suspected cattle rustlers, there was already and agreement among them to ferret out and punish the Bulataos whom they had condemned beforehand. They knew whom they were looking for. They knew where to look for them. They sought each of them with drawn and ready weapons.

 

There is no question that the group moved in concert, pursuing a common design previously agreed upon, that made each of them part of a conspiracy. As such, each of them is liable for equal degree with the others for each of the three killings. Each member of the conspiracy to commit the crime of murder is guilty as co-principal, regardless of who actually pulled the trigger that killed the three victims. It is settled that in a conspiracy the act of one is the act of all.

 

ARRIOLA vs. ARRIOLA

ARRIOLA vs. ARRIOLA

G.R. No. 177703 January 28, 2008

AUSTRIA-MARTINEZ, J.;

 

FACTS:

 

In this case is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the November 30, 2006 Decision and April 30, 2007 Resolution of the Court of Appeals in CA-G.R. SP No. 93570.

 

John Nabor C. Arriola (respondent) filed Special Civil Action No. 03-0010 with the Regional Trial Court, Branch 254, Las Piñas City (RTC) against Vilma G. Arriola and Anthony Ronald G. Arriola (petitioners) for judicial partition of the properties of decedent Fidel Arriola (the decedent Fidel). Respondent is the son of decedent Fidel with his first wife Victoria C. Calabia, while petitioner Anthony is the son of decedent Fidel with his second wife, petitioner Vilma.

 

On February 16, 2004, the RTC rendered a Decision ordering the partition of the parcel of land which became final on March 15, 2004.

 

As the parties failed to agree on how to partition among them the land covered by TCT No. 383714 (subject land), respondent sought its sale through public auction, and petitioners acceded to it. Accordingly, the RTC ordered the public auction of the subject land that was scheduled on May 31, 2003 but it had to be reset when petitioners refused to include in the auction the house (subject house) standing on the subject land. This prompted respondent to file with the RTC an Urgent Manifestation and Motion for Contempt of Court, praying that petitioners be declared in contempt.

 

The RTC denied the motion in an Order dated August 30, 2005, because petitioners were justified in refusing to have the subject house included in the auction.

 

Respondent filed with the CA a Petition for Certiorari where he sought the RTC Orders set aside and prayed that he be allowed to proceed with the auction of the subject land including the subject house.

 

In its November 30, 2006 Decision, the CA granted the Petition for Certiorari.

 

Petitioners filed a motion for reconsideration, but the CA denied the same in its Resolution14of April 30, 2007.

 

ISSUE:

 

Whether or not the subject house should be included in the public auction of the subject land?

 

HELD:

 

No, we agree that the subject house is covered by the judgment of partition for reasons postulated by the CA. However, we qualify that this ruling does not necessarily countenance the immediate and actual partition of the subject house by way of public auction in view of the suspensive proscription imposed under Article 159 of The Family Code which will be discussed forthwith.

 

It bears emphasis that an action for partition involves two phases: first, the declaration of the existence of a state of coownership; and second, the actual termination of that state of co-ownership through the segregation of the common property. What is settled thus far is only the fact that the subject house is under the co-ownership of the parties, and therefore susceptible of partition among them.

 

Whether the subject house should be sold at public auction as ordered by the RTC is an entirely different matter, since the subject house is a family home within the contemplation of the provisions of The Family Code, particularly:

 

“Article 152. The family home, constituted jointly by the husband and the wife or by an unmarried head of a family, is the dwelling house where they and their family reside, and the land on which it is situated.

 

Article 153. The family home is deemed constituted on a house and lot from the time it is occupied as a family residence. From the time of its constitution and so long as any of its beneficiaries resides therein, the family home continues to be such and is exempt from execution, forced sale or attachment except as hereinafter provided and to the extent of the value allowed by law.” (Emphasis supplied.)

 

Articles 152 and 153 specifically extend the scope of the family home not just to the dwelling structure in which the family resides but also to the lot on which it stands. Thus, applying these concepts, the subject house as well as the specific portion of the subject land on which it stands are deemed constituted as a family home by the deceased and petitioner Vilma from the moment, they began occupying the same as a family residence 20 years back.

 

It being settled that the subject house (and the subject lot on which it stands) is the family home of the deceased and his heirs, the same is shielded from immediate partition under Article 159 of The Family Code, viz.:

 

“Article 159. The family home shall continue despite the death of one or both spouses or of the unmarried head of the family for a period of ten years or for as long as there is a minor beneficiary, and the heirs cannot partition the same unless the court finds compelling reasons therefor. This rule shall apply regardless of whoever owns the property or constituted the family home.” (Emphasis supplied.)

 

Article 159 imposes the proscription against the immediate partition of the family home regardless of its ownership. This signifies that even if the family home has passed by succession to the co-ownership of the heirs, or has been willed to any one of them, this fact alone cannot transform the family home into an ordinary property, much less dispel the protection cast upon it by the law.

 

To recapitulate, the evidence of record sustains the CA ruling that the subject house is part of the judgment of coownership and partition. The same evidence also establishes that the subject house and the portion of the subject land on which it is standing have been constituted as the family home of decedent Fidel and his heirs. Consequently, its actual and immediate partition cannot be sanctioned until the lapse of a period of 10 years from the death of Fidel Arriola, or until March 10, 2013.

 

It bears emphasis, however, that in the meantime, there is no obstacle to the immediate public auction of the portion of the subject land covered by TCT No. 383714, which falls outside the specific area of the family home.

 

WHEREFORE, the petition is PARTLY GRANTED and the November 30, 2006 Decision and April 30, 2007 Resolution of the Court of Appeals are MODIFIED in that the house standing on the land covered by Transfer Certificate of Title No. 383714 is DECLARED part of the co-ownership of the parties John Nabor C. Arriola, Vilma G. Arriola and Anthony Ronald G. Arriola but EXEMPTED from partition by public auction within the period provided for in Article 159 of the Family Code.

 

No costs.

 

SO ORDERED.

 

Petition partly granted, judgment and resolution modified.

 

 

TUMLOS vs. SPOUSES FERNANDEZ

GUILLERMA TUMLOS vs. MARIO FERNANDEZ AND LOURDES FERNANDEZ

G.R. NO. 137650 April 12, 2000

PANGANIBAN, J.:

 FACTS

 Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the November 19, 1998 Decision of the Court of Appeals (CA), which reversed the October 7, 1997 Order of the Regional Trial Court (RTC).

Spouses Mario Fernandez and Lourdes Fernandez were the plaintiffs in Civil Case No. 6756, an action for ejectment filed before Branch 82 of the MTC of Valenzuela, Metro Manila against Guillerma Tumlos, Toto Tumlos, and Gina Tumlos. In their complaint dated July 5, 1996, the said spouses alleged that they are the absolute owners of an apartment building located at ARTE SUBDIVISION III, Lawang Bato, Valenzuela, Metro Manila. They prayed that the defendants be ordered to vacate the property in question and to pay the unpaid rentals worth P84,000.00 from Toto and Gina Tumlos and payment of P143,600.00 from Guillerma Tumlos as unpaid rentals for seven (7) years, as well as to jointly pay P30,000.00 in attorney’s fees,

Guillerma Tumlos was the only one who filed an answer to the complaint. She averred therein that the Fernandez spouses had no cause of action against her, since she is a co-owner of the subject premises as evidenced by a Contract to Sell wherein it was stated that she is a co-vendee of the property in question together with Mario Fernandez. She then asked for the dismissal of the complaint.

On November 15, 1996, the MTC required the parties to submit their affidavits and other evidence on the within ten (10) days from receipt of such order. Guillerma Tumlos submitted her affidavit/position paper on November 29, 1996, while the spouses Fernandez filed their position paper on December 5, 1996, attaching thereto their marriage contract, letters of demand to the defendants, and the Contract to Sell over the disputed property. The MTC thereafter promulgated its judgment on January 22, 1997.

Upon appeal to the RTC, defendants alleged in their memorandum on appeal that Mario Fernandez and Guillerma had an amorous relationship, and that they acquired the property in question as their ‘love nest.’

On June 5, 1997, the RTC rendered a decision affirming in toto the appealed judgment of the MTC is hereby reconsidered and a new one is entered reversing said decision of the MTC and dismissing the complaint in the above-entitled case.

The RTC, in determining the question of ownership in order to resolve the issue of possession, ruled therein that the Contract to Sell submitted by the Fernandez spouses appeared not to be authentic, as there was an alteration in the name of the wife of Mario Fernandez. Hence, the contract presented by the respondents cannot be given any weight. The court further ruled that Guillerma and Mario acquired the property during their cohabitation as husband and wife, although without the benefit of marriage. From such findings, the court concluded that Petitioner Guillerma Tumlos was a co-owner of the subject property and could not be ejected therefrom.

The respondents then filed a motion for reconsideration of the order of reversal, but the same was denied by the RTC.

The CA reversed the RTC, rejected petitioner’s claim that she and Respondent Mario Fernandez were co-owners of the disputed property.

ISSUE

 Whether or not Guillerma Tumlos is a co-owner of the subject property?

HELD

 No, this claim of co-ownership was not satisfactorily proven by Guillerma, as correctly held by the trial court. No other evidence was presented to validate such claim, except for the said affidavit/position paper. It was only on appeal that Guillerma alleged that she cohabited with the petitioner-husband without the benefit of marriage, and that she bore him two (2) children. Attached to her memorandum on appeal are the birth certificates of the said children. Such contentions and documents should not have been considered by the RTC, as they were not presented in her affidavit/position paper before the trial court MTC.

“However, even if the said allegations and documents could be considered, the claim of co-ownership must still fail. As [herein Respondent] Mario Fernandez is validly married to [Respondent] Lourdes Fernandez (as per Marriage Contract dated April 27, 1968, p. 45, Original Record), Guillerma and Mario are not capacitated to marry each other. Thus, the property relations governing their supposed cohabitation is that found in Article 148 of Executive Order No. 209, as amended, otherwise known as the Family Code of the Philippines.

Under Article 148, only the properties acquired by both of the parties through their actual joint contribution of money, property or industry shall be owned by them in common in proportion to their respective contributions. It must be stressed that the actual contribution is required by this provision, in contrast to Article 147 which states that efforts in the care and maintenance of the family and household, are regarded as contributions to the acquisition of common property by one who has no salary or income or work or industry. If the actual contribution of the party is not proved, there will be no co-ownership and no presumption of equal shares.

In this case, petitioner fails to present any evidence that she had made an actual contribution to purchase the subject property. Indeed, she anchors her claim of co-ownership merely on her cohabitation with Respondent Mario Fernandez.

Likewise, her claim of having administered the property during the cohabitation is unsubstantiated. In any event, this fact by itself does not justify her claim, for nothing in Article 148 of the Family Code provides that the administration of the property amounts to a contribution in its acquisition.

Clearly, there is no basis for petitioner’s claim of co-ownership. The property in question belongs to the conjugal partnership of respondents. Hence, the MTC and the CA were correct in ordering the ejectment of petitioner from the premises.

The Petition is DENIED and the appealed Decision AFFIRMED.

 

BASIC ACCOUNTING PRINCIPLES

“Accounting is the art of recording, classifying and summarizing in significant mannerand in terms of money,transactions and events whichare, in parts at least of a financialcharacter and interpreting theresult thereof”.

Is accounting an art or a science?

Accounting can be considered an art because it requires creative judgment and skills. In order to perform accounting functions well, discipline and training is required. Accounting can also be considered a science because it is a body of knowledge, but since the rules and principles are constantly changing and improving, it is not considered an exact science. The American Institute of Certified Public Accountants (AICPA) defines accounting as: “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 financial character, and interpreting the results thereof”.

Basic Accounting Principles and Concepts

Accounting is referred to as “the language of business” because it communicates the financial condition and performance of a business to interested users.

In order to become effective in carrying out the accounting procedure, as well as in communication, there is a widely accepted set of rules, concepts and principles that governs the application of the accounting. These concepts and principles are referred to as the Generally Accepted Accounting Principles or GAAP.

Basic Accounting Principles and Concepts

 1. Business Entity

 A business is considered a separate entity from the owner(s) and should be treated separately. Any personal transactions of its owner should not be recorded in the business accounting book unless the owner’s personal transaction involves adding and/or withdrawing resources from the business.

2. Going Concern

 It assumes that an entity will continue to operate indefinitely. In this basis, generally, assets are recorded based on their original cost and not on market value. Assets are assumed to be held and used for an indefinite period of time or during its estimated useful life.  And  that assets are not intended to be sold immediately or liquidated.

3. Monetary Unit

 The business financial transactions recorded and reported should be in monetary unit, such as US Dollar, Canadian Dollar, Euro, etc. Thus, any non-financial or non-monetary information that cannot be measured in a monetary unit are not recorded in the accounting books, but instead, a memorandum will be used.

4. Historical Cost

 All business resources acquired should be valued and recorded based on the actual cash equivalent or original cost of acquisition, not the prevailing market value or future value. Exception to the rule is when the business is in the process of closure and liquidation.

5. Matching

This principle requires that revenue recorded, in a given accounting period, should have an equivalent expense recorded, in order to show the true profit of the business.

6. Accounting Period

 This principle entails a business to complete the whole accounting process over a specific operating time period.

Accounting period may be monthly, quarterly or annually. For annual accounting period, it may follow a Calendar or Fiscal Year.

7. Conservatism

 This principle states that given two options in the amount of business transactions, the amount recorded should be the lower rather than the higher value.

8. Consistency

 This principle ensures similar and consistent accounting procedures is used by the business, year after year, unless change is necessary.

Consistency allows reliable comparison of the financial information between two accounting periods.

9. Materiality

 Business transactions that will affect the decision of a user are considered important or material, thus, must be reported properly. This principle states that errors or mistakes in accounting procedures, that which involves immaterial or small amount, may not need attention or correction.

10. Objectivity

 This principle states that the recorded amount should have some form of impartial supporting evidence or documentation. It also states that recording should be performed with independence, that’s free from bias and prejudice.

11. Accrual

 This principle requires that revenue should be recorded in the period it is earned, regardless of the time the cash is received. The same is true for expense. Expense should be recognized and recorded at the time it is incurred, regardless of the time that cash is paid. This is to show the true picture of the business financial performance.

Elements of the financial Statements

Assets

Asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity (IASB Framework).

In simple words, asset is something which a business owns or controls to benefit from its use in some way. It may be something which directly generates revenue for the entity (e.g. a machine, inventory) or it may be something which supports the primary operations of the organization (e.g. office building).

Classification

Assets may be classified into Current and Non-Current. The distinction is made on the basis of time period in which the economic benefits from the asset will flow to the entity.

Current Assets are ones that an entity expects to use within one-year time from the reporting date.

Non Current Assets are those whose benefits are expected to last more than one year from the reporting date.

Recognition Criteria of Assets

In order for an asset to be recognized in the financial statements, it must the following definition laid down in the IASB Framework:

Asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity (IASB Framework).

It is worth noting that the framework defines asset in terms of control rather than ownership. While control is generally evidenced through ownership, this may not always be the case. Therefore, an asset may be recognized in the financial statement of the entity even if ownership of the asset belongs to someone else. For instance, if a machine is leased to a company for the entire duration of its useful life, the machine may be recognized in its Statement of Financial Position (Balance Sheet) since the entity has control over the economic benefits that would be derived from the use of the asset. This illustrates the use of Substance Over Form whereby the economic substance of the transaction takes precedence over the legal aspects of a transaction in order to present a true and fair view.

Since, by definition, an asset must be controlled by the entity in order for it to be recognized in the financial statements, certain ‘Assets’ would not qualify for recognition. Consider a highly dedicated workforce. Generally speaking, a hardworking and motivated workforce is the most valuable asset of any successful company. But does an entity has control over its workers? The answer is no, because an employee may quit an organization any day and seek employment in a rival firm much to the detriment of the company. Therefore, such ‘Assets’ may not be recognized in the financial statements of a company.

Apart from meeting the above definition, the Framework has advised the following recognition criteria that ought to be met before an asset is recognized in the financial statements.

The inflow of economic benefits to entity is probable.

The cost/value can be measured reliably.

Liabilities

A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits (IASB Framework).

In simple words, liability is an obligation of the entity to transfer cash or other resources to another party. Liability could for instance be a bank loan, which obligates the entity to pay loan installments over the duration of the loan to the bank along with the associated interest cost. Alternatively, an entity’s liability could be a trade payable arising from the purchase of goods from a supplier on credit.

Classification

Liabilities may be classified into Current and Non-Current. The distinction is made on the basis of time period within which the liability is expected to be settled by the entity.

Current Liability is one which the entity expects to pay off within one year from the reporting date.

Non-Current Liability is one which the entity expects to settle after one year from the reporting date.

Recognition Criteria of Liabilities

In order for a liability to be recognized in the financial statements, it must meet the following definition provided by the framework:

A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits (IASB Framework).

As is clear from the above definition, the obligation must be a present one, arising from past events. In case of a bank loan for instance, the past event would be the receipt of loan principal. The obligation to pay off the loan would be present from the day the entity receives the loan principal (i.e. when an obligating event occurs). Conversely, a liability may not be recognized in anticipation of a future obligation such a bank loan expected to be taken in two year’s time.

The obligation to transfer economic benefits may not only be a legal one. Liability in respect of a constructive obligation may also be recognized where an entity, on the basis of its past practices, has a created a valid expectation in the minds of the concerned persons that it will fulfill such obligations in the future. For example, if an oil exploration company has a past practice of restoring oil rig sites after they are dismantled in spite of no legal obligation to do so, and it advertises itself as an environment friendly organization, then this gives rise to a constructive liability and must therefore be recognized in the financial statements of the company. This is because a valid expectation has been created that the company will restore oil rig sites in the future.

Equity

Equity is the residual interest in the assets of the entity after deducting all the liabilities (IASB Framework). It is what the owners of an entity have invested in an enterprise. It represents what the business owes to its owners. It is also a reflection of the capital left in the business after assets of the entity are used to pay off any outstanding liabilities.

Equity therefore includes share capital contributed by the shareholders along with any profits or surpluses retained in the entity. This is what the owners take home in the event of liquidation of the entity.

The Accounting Equation may further explain the meaning of equity:

Assets – Liabilities = Equity

This illustrates that equity is the owner’s interest in the Net Assets of an entity.

Rearranging the above equation, we have

Assets = Equity + Liabilities

Income

Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants (IASB Framework).

Income is therefore an increase in the net assets of the entity during an accounting period except for such increases caused by the contributions from owners. The first part of the definition is quite easy to understand as income must logically result in an increase in the net assets (equity) of the entity such as by the inflow of cash or other assets. However, net assets of an entity may increase simply by further capital investment by its owners even though such increase in net assets cannot be regarded as income. This is the significance of the latter part of the definition of income.

There are two types of income:

Sale Revenue: Income earned in the ordinary course of business activities of the entity;

Gains: Income that does not arise from the core operations of the entity.

For instance, sale revenue of a business whose main aim is to sell biscuits is income generated from selling biscuits. If the business sells one of its factory machines, income from the transaction would be classified as a gain rather than sale revenue.

Expense

Expenses are the decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants (IASB Framework).

Expense is simply a decrease in the net assets of the entity over an accounting period except for such decreases caused by the distributions to the owners. The first aspect of the definition is quite easy to grasp as the incurring of an expense must reduce the net assets of the company. For instance, payment of a company’s utility bills reduces cash. However, net assets of an entity may also decrease as a result of payment of dividends to shareholders or drawings by owners of a business, both of which are distributions of profits rather than expense. This is the significance of the latter part of the definition of expense.

Following is a list of common types of expenses recognized in the financial statements:

Salaries and wages

Utility expenses

Cost of goods sold

Administration expenses

Finance costs

Depreciation

Impairment losses

Accruals Principle

Expense is accounted for under the accruals principal whereby it is recognized for the whole accounting period in full, irrespective of whether payments have been made or not.

As expense is an element of the income statement, it is calculated over the entire accounting period (usually one year) unlike balance sheet items which are calculated specifically for the year end date.

Concept of Double Entry

Every transaction has two effects. For example, if someone transacts a purchase of a drink from a local store, he pays cash to the shopkeeper and in return, he gets a bottle of dink. This simple transaction has two effects from the perspective of both, the buyer as well as the seller. The buyer’s cash balance would decrease by the amount of the cost of purchase while on the other hand he will acquire a bottle of drink. Conversely, the seller will be one drink short though his cash balance would increase by the price of the drink.

Accounting attempts to record both effects of a transaction or event on the entity’s financial statements. This is the application of double entry concept. Without applying double entry concept, accounting records would only reflect a partial view of the company’s affairs. Imagine if an entity purchased a machine during a year, but the accounting records do not show whether the machine was purchased for cash or on credit. Perhaps the machine was bought in exchange of another machine. Such information can only be gained from accounting records if both effects of a transaction are accounted for.

Traditionally, the two effects of an accounting entry are known as Debit (Dr) and Credit (Cr). Accounting system is based on the principal that for every Debit entry, there will always be an equal Credit entry. This is known as the Duality Principal.

Debit entries are ones that account for the following effects:

Increase in assets

Increase in expense

Decrease in liability

Decrease in equity

Decrease in income

Credit entries are ones that account for the following effects:

Decrease in assets

Decrease in expense

Increase in liability

Increase in equity

Increase in income

Double Entry is recorded in a manner that the Accounting Equation is always in balance.

Assets – Liabilities = Capital

Any increase in expense (Dr) will be offset by a decrease in assets (Cr) or increase in liability or equity (Cr) and vice-versa. Hence, the accounting equation will still be in equilibrium.

Examples of Double Entry

1. Purchase of machine by cash

Debit	Machine	Increase in Asset
Credit	Cash	Decrease in Asset

2. Payment of utility bills

Debit	Utility Expense	Increase in Expense
Credit	Cash	Decrease in Asset

3. Interest received on bank deposit account

Debit	Cash	Increase in Asset
Credit	Finance Income	Increase in Income

4. Receipt of bank loan principal

Debit	Cash	Increase in Asset
Credit	Bank Loan	Increase in Liability

5. Issue of ordinary shares for cash

Debit	Cash	Increase in Asset
Credit	Share Capital	Increase in Equity

Debits & Credits in Accounting

Debit and Credit are the respective sides of an account.

Debit refers to the left side of an account.

Credit refers to the right side of an account.

In accounting, every account or statement (e.g. accounting ledger, trial balance, profit and loss account, balance sheet) has 2 sides known as debit and credit.

Accounting Equation

 Double entry is recorded in a manner that the accounting equation is always in balance:

Assets = Liabilities + Equity

Assets of an entity may be financed either by external borrowing (i.e. Liabilities) or from internal sources of finance such as share capital and retained profits (i.e. Equity). Therefore, assets of an entity will always equal to the sum of its liabilities and equity.

The accounting equation may be re-arranged as follows:

Assets – Liabilities = Equity

We may test the Accounting Equation by incorporating the effects of several transactions to see whether it still balances as theorized in the accountancy literature. For the purpose of this test, we may classify accounting transaction into the following generic types:

Transactions that only affect Assets of the entity

Transactions that affect Assets and Liabilities of the entity

Transactions that affect Assets and Equity of the entity

Transactions that affect Liabilities and Equity of the entity

What is a Trial Balance?

 Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first step towards the preparation of financial statements. It is usually prepared at the end of an accounting period to assist in the drafting of financial statements. Ledger balances are segregated into debit balances and credit balances. Asset and expense accounts appear on the debit side of the trial balance whereas liabilities, capital and income accounts appear on the credit side. If all accounting entries are recorded correctly and all the ledger balances are accurately extracted, the total of all debit balances appearing in the trial balance must equal to the sum of all credit balances.

 Purpose of a Trial Balance

Trial Balance acts as the first step in the preparation of financial statements. It is a working paper that accountants use as a basis while preparing financial statements.

Trial balance ensures that for every debit entry recorded, a corresponding credit entry has been recorded in the books in accordance with the double entry concept of accounting. If the totals of the trial balance do not agree, the differences may be investigated and resolved before financial statements are prepared. Rectifying basic accounting errors can be a much lengthy task after the financial statements have been prepared because of the changes that would be required to correct the financial statements.

Trial balance ensures that the account balances are accurately extracted from accounting ledgers.

Trail balance assists in the identification and rectification of errors.

— NOTHING FOLLOWS —

That Feels!!

That awkward moment when your friend is already done then you are not even half way yet!!

LMAO

10 Different Types Of Bosses And How To Work With Them ( Good Read – Credits to Free Lancer.Com)

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There are a lot of things that can affect your work potential. One of these is your manager. Getting to know the type of manager you have is an important step towards cultivating a professional relationship with them – after all, bosses can dictate whether your stay with the company will be pleasurable or not.

Here are 10 different types of bosses, and how you can relate to them.

The Workaholic

The workaholic is a boss who tends to work overtime, even through holidays. They are usually very keen on finishing projects on time, and will suggest extra work hours in order to achieve this. Most of them hardly go on sick days, or take leave from the office.

Working under a workaholic can be stressful, especially if you’re not one. There’s a high chance it will greatly impact on your work life balance. If you want to flourish under this sort of management, make sure you complete your deliverables on time. They will have no reason to hold you back for more work.

The Visionary

Visionary bosses tend to dream a lot about the company’s potential, and the future. They have a lot of ideas about which direction the company can take, but usually lack the initiation capability.

In order for you to endear yourself to a visionary boss, always try to help them achieve their ambitions. Help them understand their goal by making contributions, and by following it up on a regular basis. If everything works out well, they’ll have you to thank (and you might even get a promotion for it).

The Micro Manager

Micro managers are dreaded in any workplace. Most bosses tend to become micro managers whenever the company is making losses. They will start concentrating on every single action you make, be it work or non-work related. They might concentrate on things like how long you took during lunch, what amount of work you’ve been able to deliver in a day or how much time you’ve spent on the phone.

If this is your boss type, the best solution is to make them busy. The only way to do this is by making sure you complete your work in time. They will have so much work to review that they will forget about micro managing.

Note: Don’t take their over-involvement personally. Just do your work normally.

The Pace-setter

Pace-setter bosses like to gauge their employees by giving them constant tasks in order to find out how good they are. They might give you challenges to accomplish by a certain time, while expecting nothing but the best from you. They always expect things to be done better and faster each time.

You will have to work extremely hard under a pace-setter boss to stay in their good books.

The Under Qualified

This boss is one who is less educated than you, or knows little about the company and its processes. These bosses tend to be the creation of their own employees, since they will rely on you to provide information they might not be aware of. Never underestimate or undermine their power.

Keep them close, and explain things they might not be aware of. Once they get up to speed with everything, they will have you to thank. If top management feels that they are underperforming, chances are you might be promoted to their position. It will always be a win-win situation for you.

The Squeezer Boss

If you are looking at career growth prospects, these bosses tend to be the best to work with. The squeezer boss knows what each employee is capable of, and they “squeeze” every last ounce of talent from the employee. This means they will give you more assignments related to your talent, which will be great in boosting your resume. Their main problem is that they will insist on having their employees work overtime, and on off days. This is due to the demands they might have.

Even though your career might take off, your life work balance will be greatly impacted. Unfortunately, there’s little you can do with this type of a boss. Your only options are to ask for a pay rise for your extra input, or to find an alternative job (in a place where you can maintain your work-life balance).

You’ll have mastered enough experience to start your own consultancy or freelancing business after this.

The Intimidator

These bosses are often called dictators as well. They resort to intimidation tactics, such as yelling, when communicating with their employees. They will definitely scold you if you fail to perform in a satisfactory manner.

A good way of dealing with such bosses is by making sure you do your work. Never give them excuses to yell at you. Communicate with them about the work you’re doing if need be, but don’t succumb to their intimidation tactics. They will come to appreciate you for this.

Note: Just like in the case of micro managers, never take it personally. It’s always about the job.

The Unpredictable Boss

If you have an unpredictable boss, then there’s not much that you can do. These bosses’ actions are hard to predict. Whereas they may be satisfied with something today, the same may not necessarily be true tomorrow. This means that you’ll always have to break into a sweat whenever you’re reporting to them. The only way you can try and alleviate their “unpredictability” is by ensuring that you do your work as expected.

The Traditionalist

These bosses tend to stick to old company traditions, and they may bring this up during meetings. They have probably been in the company for a very long time and they don’t take kindly to change. Never try arguing with a traditionalist, always be receptive to their ideas. You never know, some of their old methods might actually work.

If there’s an easier way of doing something, you can bring it to their attention in a polite manner. They don’t like to feel challenged. They’ll get more receptive to your ideas once they feel you’re receptive to theirs.

The Perfect Boss

Perfect bosses are people who treat everyone in the workplace fairly. They listen to suggestions, and are willing to give you space to do your work. They will advise you on your career prospects, and might help you achieve your career goals. Furthermore, their work relationship does not end in the office. They are always ready to follow up with you on your favourite team’s game after work hours.

Sadly enough, the world does not have as many perfect bosses as everyone would wish. If you have a perfect boss, appreciate their efforts! They will leave a huge void once they leave the company.

Conclusion

There’s not much you can do to change your boss in the workplace. They also have their own targets to meet, and they will do everything in their power to attain them. Be humble, and you’ll learn a lot from them. No matter which category they are in, there’s that one quality they have that you will come to appreciate.