Republic of the Philippines

Department of Education
Region IV-A CALABARZON
Division of Batangas
Lian District

Fundamentals of Accountancy
Learning Area Grade Level 11
W1 Quarter
Business and Management 1 (FABM1)
First Date August 16- 20, 2021

I. LESSON TITLE: The Proem of Accounting

II. MOST ESSENTIAL LEARNING COMPETENCIES (MELCs)
 Define accounting (ABM_FABM11- IIIa-1)
 Describe the nature of accounting (ABM_FABM11- IIIa-2) Narrate the history/origin of
accounting (ABM_FABM11- IIIa-4) Define external users and gives examples (ABM_FABM11-
IIIa-7)
 Define internal users and give examples (ABM_FABM11- IIIa-8)

III. CONTENT/CORE CONTENT

Introduction to Accounting and Users of Accounting Information
Ref: Teachers Guide FABM, pages 1-6/ FABM1 Textbook, pages 1-11/ Quexhub PERC
Learning Portal
IV. LEARNING PHASES/LEARNING ACTIVITIES

A. Introduction
Good day! Today, we are going to explore the world of accounting. By the end our
topic, you should be able to:
1.define accounting and other accounting terminology
2.cite external users and internal users of financial information
3.exhibit integrity on giving accounting information

“Is accounting important to you?” We will leave this question unanswered. I will ask this question
again after our discussion of the introduction to accounting. Bear in mind that accounting has
different components that you need to develop.

Real Talk!
Read aloud and answer the following questions:
1.Do your parents ask how you spend your allowance every day? _______________
2.When going home, do you sometimes choose to walk from school rather than riding a jeepney to
save up money? ____________

B. Development
This time, let us define some accounting terms:

Accounting is a systematic and comprehensive way of recording the business’ financial

transactions. It is the process of recording, classifying, summarizing, reporting, and interpreting
information about the economic activities of an organization.

Bookkeeping is the recording part of accounting that uses systematic procedures in listing
transactions. A bookkeeper is the one who handles the basic accounting functions of a business
that may include recording of the various transactions. He is also tasked to do the summarizing,
reporting, and analyzing.

GAAP or Generally Accepted Accounting Principles is a set of standards related to balance

sheet identification, outstanding share measurements, and other accounting issues. Its standard is
based on double-entry accounting.

Double-entry accounting is a method which enters each expense or incoming revenue in

two places on a company’s balance sheet. It does not also use one place in a company’s balance
sheet.
Components of accounting are: (1) Recording refers to the process of making records of all
the transactions that the business made in a certain period of time. (2) Summarizing pertains to
the creation of a summary of the accumulated recorded transactions (3) Reporting is the process
wherein the management presents reports to the company investors as to where the invested money
is going (4) Analyzing is the process of drawing out both the positive and negative points so that the
financial performance of the company will be improved and where profits, sales, and cash are being
compared to be able to draw the needed conclusions within the given period of time.
 ……Let
Republic of us talk about
the Philippines
Department of Education
the History or Origin
Region IV-A CALABARZON
of Accounting
Division of Batangas
Lian District
The Cradle of
Civilization Around
3600 What B.C., Record-
is the nature of accounting?
keeping was
The financial already
information captured by the accounting system is usually communicated
common
through reports called from
financial statements including (1) income statements, (2) balance sheets,
Mesopotamia,
and China
(3) cash flow statements.
and India to Central
and Income
South Statement
America. captures revenue, expenses, and net income over a period of time.
The oldest
Important evidence
elements of income statement: Revenue is the monetary compensation given to the
of an
this practice was the
organization in exchange for goods and services provided. Expenses are the cost incurred by the
“clay
organization tablet”
in providing of the goods and services to its customers. Net Income (Losses) is the
Mesopotamia which
difference between income and expenses, depending on which is greater.
dealt with commercial
transactions
BalanceatSheet the time
shows the assets, liabilities, and owner’s equity at a point in time. Important
such as listing
elements of a balance sheet: of Assets are the resources owned by the organization. These assets can
accounts receivable and
be classified as fixed or current, and as tangible or intangible. Liabilities are the obligations of the
accounts payable.
organization to other organizations. The The obligations
Present can - be classified as long-term or current.
14th Century - The Development of
Double-Entry
Equity is the residualModern amount leftAccounting
after liabilities are subtracted from the assets of an
organization. This represents the actual valueand
Bookkeeping The most Standards of ownership the shareholders have in the
important after
organization event in obligations
all the Commerce are met. TheThe relationship of the three types of accounts listed
accounting
above historyby is
is represented accountingequation,wherein
the accounting profession
generally considered to in the 20th century
be the dissemination of developed around stateEQUITY (A=L+E)
ASSET=LIABILITIES+OWNER’S
double entry requirements for
bookkeeping
Cash Flow by Statement,
Luca financial
also known statement
as statement of cash flows, shows how changes in
Pacioli (‘The Father of
balance sheet counts, shows how incomeaudits. Beyond affectsthecash and cash equivalents, and breaks the
Accounting’) in 14th industry's
analysis down to operating, investing, and financing activities.self-
century Italy. Pacioli regulation, the
was much revered in government also sets
his day, and was a accounting standards, .
friend and through laws and
contemporary of agencies such as the Did you know that there are two
Leonardo da Vinci. The Securities and classifications of accounting information
Italians of the 14th to Exchange Commission users? These are the following:
16th centuries are (SEC). As economies
widely acknowledged as worldwide continued to External users are those persons or
the fathers of modern globalize, accounting groups outside of organizations. They have
accounting and were regulatory bodies limited authority and they have the ability
the first to commonly required accounting and access to the company’s accounting
use Arabic numerals, practitioners to observe information. They rely only on whatever
rather than Roman, for International information is given in the company’s
tracking business Accounting Standards. websites and annual reports that are
accounts. Luca Pacioli This is to assure mandated to be submitted to financial
wrote Summa de transparency and regulators. Some examples are owners,
Arithmetica, the first reliability, and to obtain creditors, suppliers.
book published that greater confidence on
contained a detailed accounting information Internal users refer to the members of a
chapter on double- used by global company’s management and other
entry bookkeeping. investors. Nowadays, individuals who use financial information
French Revolution investors seek in running and managing the business.
(1700s) The thorough investment They work within the company and make
study of accounting opportunities all over decisions for the business. Some examples
and development of the world. To remain are BOD, Chief Executive Officer, and
accounting theory competitive, businesses President.
began during this everywhere feel the
period. Social need to operate C. Engagement
upheavals affecting globally. The trend now
government, finances, for accounting ACTIVITY 1 – DEFINE ME!
laws, customs and professionals is to Comprehension Check:
business had greatly observe one single set What is Accounting? Explain it in your
influenced the of global accounting
development of standards in order to own understanding. (10 points)
accounting. have greater
The Industrial transparency and
Revolution (1760-1830) comparability of
Mass production and financial data across
the great importance of borders.
 Republic of the Philippines
Department of Education
Region IV-A CALABARZON
Division of Batangas
Lian District

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ACTIVITY 2 –THINK IT OVER!

Answer the question briefly.

Based on a real-life experience, think of culminating activities, business simulation, business

owned, or occupation that you came across, “How will accounting affect the stability of a business?”
Kindly give at least three (3) possible answers. (5 points each)
Answers:

1.________________________________________________________________________________________________

__________________________________________________________________________________________________

2.________________________________________________________________________________________________

__________________________________________________________________________________________________

3.________________________________________________________________________________________________

__________________________________________________________________________________________________

D. Assimilation
A. This time try to check what you have learned. In the box below, draw the concept of
accounting equation. (10 points)

ASSET=LIABILITIES+OWNER’S EQUITY (A=L+E)

V. ASSESSMENT. Read and understand the following questions. Choose and encircle your answer
1.Which of the following is NOT one of the designations of an accountant?
A. Certified Management Accountant C. Certified Private Accountant
B. Certified Public Accountant D. Certified General Accountant
2.Which of the following is one of the components of accounting?
A. Summarizing B. Analyzing C. Reporting D. All of these are correct
3.Which of the following refers to a process that helps interpret information about the economic
activities of an organization?
A. Accounting B. Financial Analysis C. Organizing D. Financial Planning
4.What kind of reports provide the information captured by the accounting system?
A. Financial Statements B. Portfolio C. Balance Sheet D. Income Statement
5.Which of the following is NOT closely related to the development of accounting?
A. Taxation B. Early auditing systems C. Business D. Trading activities of temples
 Republic of the Philippines
Department of Education
Region IV-A CALABARZON
Division of Batangas
Lian District

VI. REFLECTION
Now, let us go back to the unanswered questions during the introduction of our topic.

“Is accounting important to you? Does it affect your daily activities? How?” Answer these in
the accounting journal below.

I realized that….
I understand that….

The integrity of the upright shall guide them; but the perverseness of transgressors shall
destroy them- Proverbs 11:3
Prepared by: Checked by:

JENNILYN NORMELIT
V. A D.
PADILLA MAALA