SENIOR

HIGH
SCHOOL

Fundamentals of
Accountancy, Business &
Management I
Quarter 1 – Module 1:
Accounting Introduction and Information
Users

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 You are reading the Fundamentals of Accountancy, Business and
Management 1 - Grade 11: First Quarter Alternative Delivery Mode (ADM) Module
on “Define accounting; Describe the nature of accounting; Narrate the
history/origin of accounting” as written and found in the K-12 Most Essential
Learning Competencies.

This module is especially crafted for you to grasp the opportunity to

continue learning even at home. Using guided and independent learning
activities, rest assured that you will be able to take pleasure as well as to deeply
understand the contents of the lesson presented; recognizing your own capacity
and capability in acquiring knowledge.

This module has the following parts and corresponding icons:

The first part of the module will keep on

WHAT I NEED TO KNOW tract on the Competencies, Objectives and Skills expected
for you to be developed and mastered.

WHAT I KNOW This part aims to check your prior

knowledge on the lesson to take

This part helps you link the previous

lesson to the current one through a short
WHAT’S IN exercise/drill.

The lesson to be partaken is introduced in

this part of the module creatively. It may be through a
WHAT’S NEW
story, a song, a poem, a problem opener, an activity, a
situation or the like.

A brief discussion of the lesson can be

WHAT IS IT read in this part. It guides and helps you
unlock the lesson presented.

A comprehensive activity/es for

WHAT’S MORE independent practice is in this part to
solidify your knowledge and skills of the
given topic..

This part of the module is used to process

WHAT I HAVE LEARNED your learning and understanding on the
given topic.

A transfer of newly acquired knowledge

WHAT I CAN DO and skills to a real-life situation is present
in this part of the module.

This activity assesses your level of

ASSESSMENT mastery towards the topic.

In this section, enhancement activities

ADDITIONAL ACTIVITIES will be given for you to further grasp the
lessons.
 At the end of this module you will also find:

References: Printed in this part is a list of all reliable and valid resources used in
crafting and designing this module.

In using this module, take note of the fundamental reminders below.

1. The module is government owned. Handle it with care. Unnecessary marks are
prohibited. Use a separate sheet of paper in answering all the given exercises.

2. This module is organized according to the level of understanding. Skipping one

part of this module may lead you to confusion and misinterpretation.

3. The instructions are carefully laden for you to understand the given lessons. Read
each item cautiously.

4. This is a Home-Based class, your reliability and honor in doing the tasks and
checking your answers are a must.

5. This module helps you attain and learn lessons at home. Make sure to clearly
comprehend the first activity before proceeding to the next one.

6. This module should be returned in good condition to your teacher/facilitator

once you completed it.

7. Answers should be written on a separate sheet of paper or notebook especially

prepared for FABM 1 subject.

If you wish to talk to your teacher/educator, do not hesitate to keep in touch with
him/her for further discussion. Know that even if this is a home-based class, your
teacher is only a call away. Good communication between the teacher and the
student is our priority to flourish your understanding on the given lessons.

We do hope that in using this material, you will gain ample knowledge and skills for
you to be fully equipped and ready to answer the demands of the globally
competitive world. We are confident in you! Keep soaring high!

WHAT I NEED TO KNOW

Good day dear learner!

This module is solely prepared for you to access and to acquire lessons befitted
in your grade level. The exercises, drills and assessments are carefully made to
suit your level of understanding. Indeed, this learning resource is for you to fully
comprehend Lesson 1 -- Accounting Introduction. Independently, you are going
to go through this module following its proper sequence. Although you are going
to do it alone, this is a guided lesson and instructions/directions on how to do
every activity is plotted for your convenience.

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Using this learning resource, you are ought to define accounting; describe the
nature of accounting; and narrate the history/origin of accounting” as inculcated
in the K-12 Most Essential Learning Competencies.

At the end of this lesson, you are expected to achieve the following objectives:

➢ define the concept of accounting;

➢ identify the nature of accounting in view of its definitions;
➢ make a timeline of the history/origin and developments of accounting; and
➢ display self-trust in carrying out all activities.

WHAT I KNOW

PRE-ASSESSMENT

WORKOUT YOUR STOCK KNOWLEDGE!

Read each question below. Then, write the letter of your answer on your answer sheet.

1. What do you call the reports that reflect the financial standing and economic
activities of the business?
a. Accounting books b. Financial Accounts c. Financial Statements
2. Which of the following is considered the language of business?
a. Handshake b. Accounting c. Customers
3. Which of the following professions never uses accounting information?
a. Company managers c. Neither of a and b
b. Government Officials
4. What refers to the interactions of a business with other businesses and
stakeholders?
a. Business Investments c. Business Obligations
b. Business Transactions
5. Which of the following is NOT a business stakeholder?
a. Customers c. Neither of a and b
b. Government Officers
6. Who is considered the father of modern accounting?
a. Luca Pacioli b. Queen Victoria c. Augustus
7. Who does the job of identifying, recording, and communicating the financial
events of a business?
a. Company owner b. Treasurer c. Accountant
8. What branch of accounting targets to educate students in the accounting field?
a. Financial Accounting c. Accounting Research
b. Accounting Education
9. What government agency manages tax return filing and tax collection?
a. Bureau of Treasury c. Department of Education
b. Bureau of Internal Revenue
10. In accounting, what term is used to refer to bills, coins, checks, deposits in
banks, and bank drafts?
a. Cash b. Money c. Exchangeable
11. The following are steps in the accounting process except _________.
a. Identifying b. Recording c. Segregating

12. Which of the following is NOT considered a feature of accounting?

 a. Accounting is a process. c. Accounting records all business
b. Accounting is an information system. happenings.
13. What does GAAP stand for?
a. Generally Accepted Accounting Proposals
b. Generally Accepted Accounting Principles
c. Government Accepted Accounting Principles
14. Which of the following statements about accounting is NOT correct?
a. Accounting is a process.
b. Accounting is a service activity.
c. Accounting is an activity that follows unchangeable rules.
15. Which of the following statements about accounting is correct?
a. The history of accounting can be traced back to ancient Mesopotamia.
b. There is one only acceptable definition of accounting.
c. Accounting is a one-step process.

For making a great start on this module, congratulations! Today, you should
expect to learn the first accounting lessons through a series of activities you can be sure
you’ll be able to do well.

Accounting is deemed to be a valuable part of life: do you want to know why?

WHAT’S IN
Businesses are here and there. As a grade 11 senior high school student, it is
likely that you have dealt with one or more of the businesses operating in your
locality. There’s also chance you will be engaged into a business of your own like
selling banana cues to neighbors, selling school supplies to classmates, etc.

A business is defined as an organization or entity that engages in commercial,

industrial, or professional activities. It is also being generally referred to as the
organized efforts and activities of individuals to produce and sell goods and services
for profit.

There are so many types of businesses. Amid all, there’s one common factor
that contributes to their success – accounting.

How does accounting do that? Or you might first ask: What is accounting?

You will find the answer to these and more questions as you move along the
activities. Are you ready?

AGREE OR DISAGREE?

START OUT BY TAKING A SIDE!

Read the statements with care. On your answer sheet, write AGREE if you agree
with what the statement say about accounting; otherwise, write DISAGREE.

___________ 1. Accounting is a tool in achieving the goals of the business.

___________ 2. Accounting is a process that involves a number of steps.
___________ 3. The highest aim of all businesses is to follow accounting rules and
standards.
___________ 4. Accounting began only after World War II.
___________ 5. Managers are able to know if the company is doing well through
accounting. CONCEPT MAPPING
.

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GENERATE AND LINK!

What thoughts come out of your mind when you hear the word
‘accounting?’ What terms you think it is related to? On your answer sheet, copy
the graphic organizer below. Then using your prior knowledge, generate ideas
about accounting and write them inside the empty shapes. Add and connect more
shapes if you have to.

ACCOUNTING

WHAT’S NEW

DEFINING BY CONNECTING

GO AND FIND LESSON HINTS!

On your answer sheet, copy the accounting definition fragments placed

under columns A and B below. Then read each one carefully. Using a line,
connect one fragment in column A to another fragment in column B to form one
correct accounting definition. Do it from number 1 through 5.

A B

Accounting is a service measuring, and communicating

1.)
activity that functions economic information.

Accounting is the process

economic information to permit
2.) of identifying,
informed judgment and decisions by
users of the information.

Accounting is the process

3.)
of identifying, measuring, by providing quantitative information
Theand
process of accounting
communicating recording those events, and
includes identifying which are financial in nature.
communicating the summarized
economic events, results of such events to information
users.
 4.)

Accounting is a system that businesses in tracking their financial

5.) aids transactions.

LETTER PUZZLES

GRASPING FROM CUES!

Accounting definitions present features that describe the very nature of

accounting. Figure out what these features are by completing the letters of each
puzzle below. Write the complete word on your answer sheet.

Note that corresponding to each puzzle are phrase clues for your additional
help. Have fun!

1.) a collection of financial data

2.) involves a series of steps

3.) requires creativity and skill

4.) serves as tool for success

5. ) relating to money

ORDERING EVENTS

TRACE BACK TO HISTORY!

When did accounting start? Who were the people who contributed to its
development? Order the following events in accounting history and development
by writing 1 for that which happened first, 2 for that which happened next, and
so on until 5. Be sure to be on watch for clues along each item. Write your
answers on your answer sheet.

_______ 1. Luca Pacioli wrote his Summa de Arithmetic, Geometria, Proportioni

et Proportionalita which introduced double-entry bookkeeping in 1400s.

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 _______ 2. A remarkable leap in accounting took place in the 19 th century when
Queen Victoria of Scotland gave a royal charter to the Institute of Accountants in
Glasgow.
_______ 3. Philippines has started to be completely compliant with the
International Financial Reporting standards to the present.
_______ 4. Egyptians invented the abacus of bead and wire and were making and
keeping accounting records.
_______ 5. The beginning of accounting can be traced back to income calculation
and taxation activities of Ancient Mesopotamia.

WHAT IS IT

Engage into Reading!

Definitions of Accounting

Accounting is a system that allows businesses to trace its financial activities

and evaluate results. There are three major steps involved in accounting: (1)
identifying financial events, (2) recording financial events, and (3) communicating
the summarized results of all financial events to different parties for decision-
making. All these steps are performed by the accountant.
The American Accounting Association (AAA) defines accounting as the process
of identifying, measuring, and communicating economic information to permit
informed judgment and decisions by users of the information.
The Accounting Standards Council (ASC) considers accounting as a service
activity which functions by providing quantitative information, primarily financial in
nature, about economic entities, that is intended to be useful in making economic
decisions.
The American Institute of Certified Public Accountants (AICPA) also 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 or at least
of financial character, and interpreting the results thereof.

Nature of Accounting

From the definitions above, you can determine what features accounting has. These
features describe the nature of accounting.
1. Accounting is a process. In accounting, a series of logical and organized steps are
involved such as identifying, recording, measuring, and summarizing financial data. After,
the summarized results are communicated to different parties or “stakeholders”.
2. Accounting is an art. It takes creativity, skill and expertise to perform all the accounting
steps and activities. Accounting education prepares students for the accounting career.
3. Accounting is concerned with financial information and transactions. Accounting
is a system in business that is concerned with “money matters.”
 Hence, it involves a step called identifying, where events of the business are identified
as whether they are financial and material in nature or not.
4. Accounting is a means, not than an end. You have read that accounting
contributes to the success of every business. Hence, accounting serves as a tool to
achieve business goals rather than being the goals themselves.
5. Accounting is an information system. Accounting is a repository of a
collection of information which are financial in kind. These information are dealt with
through a series of steps. Period by period, this accounting information are
summarized for the preparation of accounting reports or financial statements.

History of Accounting

When did accounting begin?

It is said that the beginning of accounting can be traced back to as early as when people
learned to trade, tax and develop a system of counting money. According to history, in
4000B B.C., the income of temples was recorded in lower Mesopotamia. The Phoenicians
also in 1000 B.C. created an alphabet with accounting to help them in their trades with
the ancient Egyptians and avoid being cheated. In 500 B.C. history recorded the invention
of the first bead and wire abacus by the Egyptians who were already making and keeping
accounting records during the time.
In the 14th century, Luca Pacioli became a prominent person in accounting history due to
writing a book that introduced and disseminated the double-entry bookkeeping. The
Summa de Arithmetica, Geometria, Proportioni et Proportionalita of Pacioli is the first book
to introduce bookkeeping. Pacioli is considered as the father of modern accounting.
Another event in accounting history and development took place in Scotland in the 19th
century where the modern profession of chartered accountants originated. This became
possible by the granting of Queen Victoria of a royal charter to the Institute of Accountants
in Glasgow.
Currently, accounting standards are available to provide guidance to accountants
in their professional practice. Some of these are the Philippine Accounting Standards (PAS),
the Generally Accepted Accounting Principles (GAAP), and the International Financial
Reporting Standards (IFRS). Since 2005, the Philippines became completely compliant with
the IFRS.

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 WHAT’S MORE

FACT SHEETS

TIME TO USE YOUR MAGNIFYING GLASS!

On your answer sheet, copy the following statements about accounting

definition, nature and history, and draw a bin as what appears below. Crash out
the wrong statements and rewrite them on the bin. Leave the correct ones as is.

Luca Pacioli is a prominent

person in the history of
accounting.

No one becomes an
accountant unless he or
she knows how to paint.

The three major steps in

the accounting process are
identifying, recording and
communicating.

Accounting standards are

available to date to guide
accountants in their
profession.

Accounting helps business

stakeholders make better
decisions.

What I Have Learned

MY LEARNING JOURNAL

THINK AND WRITE!

Accounting definition, nature and history are three of the most important
topics to learn in this subject. With them, you find there’s a point moving forward
with accounting. Now please share what’s on your mind. On your answer sheet,
 write your insights about how accounting can be play an important role in life.
Have a great time pondering and writing!

What I Can Do
PLAY MAYOR

BECOME TOUGHER!

In this activity, you are going to imagine yourself a mayor of your own
town, having the opportunity and responsibility to oversee the town residents.
Decide whether you are going to approve or disapprove the following actions of
the following individuals. On your answer sheet, simply write A if you approve,
and D if you disapprove.

________ 1. The accountant of Q Company falsified the data of their financial

statements.
________ 2. When Mario, the owner of ABC company found out that his business
is prospering and needs more manpower, he hired many qualified town people.
________ 3. Ms. Shena, the accountant of XYZ Co., keeps track of all financial
transactions of the business to make sure she produces accurate financial
statements.
________ 4. MNM enterprise processes business permit but is not honest in
declaring the company’s yearly income to the government.
________ 5. Jane takes up BS Accountancy and treats her schooling seriously to
acquire needed knowledge and skill that would be helpful in her future
accounting career.

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 Assessment
LESSON QUIZ

LET’S CHECK WHAT YOU’VE LEARNED!

Read each item or question carefully. Then, write the letter that
corresponds to your answer.

1. Which of the following is a correct listing of the steps in the accounting

process?
a. identifying, recording, communicating
b. identifying, segregating, communicating
c. segregating, recording, verifying

2. Accounting serves as channel of success for businesses. What nature of

accounting is meant by this?
a. Accounting is a process. c. Accounting is a means not an end.
b. Accounting is an art. d. Accounting is an information system.

3. Who signed the royal charter for the Institute of Accountants in Glasgow?
a. Luca Pacioli c. Phoenician
b. Queen Victoria d. Egyptian Traders

4. Which among the steps in the accounting process is most important?

a. Identifying c. Communicating
b. Recording d. All are equally important.

5. Which of the following business transactions is not financial in nature?

a. Company A borrowed money from bank to buy additional equipment.
b. Company B hired employees.
c. Company C sold P10,000 worth of inventories.
d. Company D paid its hired employees for the month of November.

6. Which of the following statements is NOT correct?

a. Luca Pacioli is considered as the father of modern accounting.
b. Today, accounting rules and standards are available to help
accountants in the practice of their profession.
c. In 2006, Philippines have fully complied with the IFRS.
d. Phoenicians invented an alphabet with accounting to avoid being
cheated by Egyptians in their trading.

7. Accounting being a service activity is applicable only to businesses

rendering services.
a. The statement is true.
b. The statement is false.
8. There is only one definition of accounting that can be considered
acceptable.
a. The statement is true.
b. The statement is false.
 9. Accountants communicate the summarized results of all company
financial events to interested parties to help them in ________.
a. making relevant decisions c. selling products
b. choosing job applicants d. extending the life of the
business
10. Accounting keeps a record of all financial transactions done by the
company period after period. What nature of accounting is shown in this?
a. Accounting is a process.
b. Accounting is a means rather than an end.
c. Accounting is an art.
d. Accounting is an information system.
11. Which of the following is a chronologically ordered listing of accounting
history events?
a. Income of temples was recorded in lower Mesopotamia → Origination of
the profession of chartered accountants in Scotland → Invention of the first
bead and wire abacus by the Egyptians
b. Creation of alphabet with accounting by the Phoenicians → Formulation
of GAAP, PAS and IFRS → Luca Pacioli wrote a book that introduced double-entry
bookkeeping
c. Income of temples was recorded in lower Mesopotamia → Creation of
alphabet with accounting by the Phoenicians → Luca Pacioli wrote a book that
introduced double-entry bookkeeping
d. None of the above
12. The PAS, GAAP and IFRS are accounting ________.
a. steps c. standards
b. features d. events
13. Two of that which accountants must possess are mathematical skill and
analytical skill. This statement presents what feature of accounting?
a. Accounting is a process.
b. Accounting is a means rather than an end.
c. Accounting is an art.
d. Accounting is an information system.
14. One of the features of accounting is that it is concerned with financial
information and transactions. Which of the following is not similar in
meaning with the underlined phrase?
a. economic information c. money matters
b. material information d. managerial information
15. Accounting is considered a ship that carries the company to its
destination. What feature of accounting is meant by this?
a. Accounting is a process.
b. Accounting is a means rather than an end.
c. Accounting is an art.
d. Accounting is an information system.

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 WHAT I NEED TO KNOW

Hi again learner!

This Lesson 2 – Accounting Information Users has the following learning

fundamentals for you:

K-12 Most Essential Learning Competencies:

 (ABM_FABM11- IIIa-7)
 (ABM_FABM11- IIIa-8)

Learning Objectives:
 Define external and internal users of accounting information;
 Classify users of accounting information as external or internal;
 Solve exercises on the identification of users of accounting
information; and
 Show sincerity in carrying out all tasks.

WHAT I KNOW
PRE- ASSESSMENT

Uncover Your Prior Knowledge!

Read each statement or question below. Then, write the letter that
corresponds to your answer.

1. What are the two classifications of accounting information users?

a. Owners and Creditors c. Private and Public Users
b. Internal and External Users

2. Which of the following is an accounting information user that is employed by

the business to plan, run, and evaluate its operations?
a. Managers b. Stockholders c. Employees

3. Which of the following uses accounting information on behalf of the company?

a. Government b. General Public c. Managers
4. They are composed of banks, lenders and rich individuals who lend money or
resources to the business.
a. Investors b. Owners c. Creditors

5. Which of the following will need to check the financial statement of a company?
a. Owner of the company c. Both a and b
b. Government

6. The income of the business comes mainly from its transactions with _________.
a. Customers b. Lenders c. Employees
 7. Which of the following is FALSE about accounting information users?
a. Accounting information users are classified into internal and external
users.
b. Company owners and tax authorities both use accounting information
but for different reasons.
c. The general public doesn’t have interest in accounting information of
businesses.

8. These are hired workers of a company that view its financial statements for
personal reasons.
a. Supervisors b. Managers c. Employees

9. What is likely to be the reason why an employee would want to check the
financial statement of the company where he is working?
a. To know if the company is paying taxes to the government regularly
b. To know if the company can pay its loans to banks
c. To know if the company is in good condition and can pay his salary

10. The company accountant should only communicate accounting data to

company owners.
a. The statement is true. b. The statement is false.

11. Accounting information is communicated to different users for them to make

appropriate decisions.
a. The statement is true. b. The statement is false

12. The Bureau of Internal Revenue is what example of accounting information

user?
a. Supplier b. Academe c. Taxing Authority

13. The manager, owner and customers of Double V company are all examples of
internal user of accounting information.
a. The statement is true. b. The statement is false

14. The customers, creditors and prospective investors of New Clothes Company
are all examples of external users of accounting information.
a. The statement is true. b. The statement is false

15. What is likely to be the reason why a bank would want to check the financial
statement of a company applying to borrow money from it?
a. To know if the company has the ability to pay the amount it is borrowing
b. To know if the company is a reliable supplier of a particular product
c. To verify if the company is honestly paying taxes to the government

WHAT’S IN

Given Best School Supplies Center which sells

school and office supplies to customers. After six
months of operation, its owner Beverly asks her
accountant to prepare and present the financial
statements of the business. As an owner, Beverly
has reasonable interest of knowing through the
financial statements if her business is profiting or
losing.

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 Other than Beverly, who else do you think will use the financial statements
of Best School Supplies Center?

Making guesses now? You’ll find out no sooner about the different
accounting information users!

WORD SEARCH

Open Your Eyes, Activate Your Mind!

Find 10 words that are related to accounting inside the word square and
write them on your answer sheet. Cue: Some words may be in vertical-
downward position, horizontal-forward position, and slanting-downward
position.

WHAT’S NEW

MYSTERY BOX

Figure It Out!

The mystery box now opens, and inside it are some of the stakeholders or
accounting information users of Best School Supplies Center whose owner is
Beverly. Why do you think these stakeholders need to see and use the financial
statements of Best School Supplies Center? Share your opinion and write them
on your answer sheet.
Beverly
(Company Managers
Owner)

Customers

Public
Government

Best School
Supplies Center
 Beverly (Company Owner)
____________________________________________________________
Manager
___________________________________________________________
Customers
__________________________________________________________________
Government
__________________________________________________________________
Public
_________________________________________________________________

WORDS OVER DOTS

Get Ready to Fill In!

Read each item. Then, identify the word or words that would fill in over the
dots and make each statement about accounting information users correct.
Choose your answers from the pool of words provided and write them on
your answer sheet.

1. Customers refer to those who or acquire services from a company

at a price.
2. Potential investors are individuals or other businesses planning to in
the company.
3. is concerned about the effects of businesses to the economy and
checks the accuracy of financial statements submitted by businesses for the
computation of correct tax payable.
4. The are people not connected with the company, but use accounting
information to know how the business affects the economy, as well as
identify opportunities for employment.
5. users refer to parties who do not belong to the company but make
important decisions based on the company’s accounting information.

buy goods borrow

Academe public
External Internal
invest Government

WHAT IS IT

Crashing in With Text!

Users of Accounting Information

Accounting information is communicated to different stakeholders who

use such accounting information in making decisions. Users of accounting
information are classified into internal and external users.
Internal users are those who make decisions on behalf of the organization. They
are the following:

1. Managers/Management - They are people employed by the company to

perform management functions such as planning, organizing and running the
business affairs.

__________________________________________________________________________________________________________________________________
2. Employees/Labor Unions - They are ordinary company employees who assess the
company’s profitability and stability, and their consequence on future salary and job
security.
3. Owners/Stockholders - They provide capital to the business. They need accounting
information to check if the business is well. Accounting information also helps them
in deciding whether to withdraw or increase their investments. Overall, they are
BN
interested to know if the business is profiting and how much.
External users are those who are not part of the company but need to use accounting
information to be able to make decisions. They are the following:
1. Potential Investors - They are individuals or other business planning to invest in
the company. To be able to make sure that the company is worth putting their money
in, they check its financial statements and make decisions based on the accounting
information gathered.
2. Creditors and Potential Creditors - They are individuals, institutions or banks who
have lent or are planning to lend money to the company. They need to check the
company’s financial statements in order to assess its credit worthiness and the
capability of the business to pay its obligations including related interests on maturity
date.
3. Customers - They refer to people who buy goods or acquire services from the
company at a price. They check the financial statements of their suppliers in order to
determine if they are a stable source of supply over a long period.
4. Suppliers - They are businesses that provide supplies to other businesses. They
check the financial statements of their customers in order to determine if debts owed
to them will be paid when due.
5. Government - The government is concerned about regulating businesses and their
effects to the economy. They also want to check if businesses are paying their taxes
honestly. Thus, they check the financial statements of businesses. Examples are the
Bureau of Internal Revenue, which is a tax authority, and the Securities and
Exchange Commission which is a regulatory body.
6. Academe - Educational institutions use accounting information from the financial
statement of a company for academic purposes.
7. Public - The general public is composed to individuals who are not related
to the company. However, they use the financial statements of a company to
determine how it affects the economy, and pinpoint possible prospects for
employment.

WHAT’S MORE

LEFT-RIGHT

Sort It Out!

Classify the users of accounting information inside the circle as internal or

external. If the user is internal, rewrite it on the left box; if the user is external,
rewrite it on the right box. Do this on your answer sheet.
LEFT RIGHT
Management
Suppliers
Company Owner
General Public
Academe
Customers
Labor Unions
Creditors
Government
Employees
 GROUPING

Get Ready for Some Kicking!

Identify which does not belong to group of internal or external users and
cross it out. Do this on your answer sheet.

1. Top Management, Owner, Stockholder, Government

2. Laborer, Public, Potential Investors, Clients

3. Academe, Supervisor, Lending Company, Taxing Authority

4. General Public, Existing Investor, Company Proprietor, Manager

5. Researcher, Academe, Regulatory Bodies, Labor Union

WHAT I HAVE LEARNED

THREE, TWO, ONE

Think Aloud!

What can you say about your journey through this lesson? On your answer
sheet, copy the labelled boxes below and fill them out.

Three Realizations Two Challenges One Question You

You Have Acquired You Have Have about the
from the Lesson Encountered in Lesson
the Lesson

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 WHAT I CAN DO
INSIGHT LOG

From Mind to Hand!

You’ve gone through a series of uphills and downhills from task 1 to here!
Impart your practical learning out of this lesson by writing a short essay based
on the starter below. Do this on your answer sheet.

After having learned about internal and external users of

accounting information, I am planning to…

Write in Express your Watch on your

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 ASSESSMENT
LESSON QUIZ
Gauge Your Learning!

Read each item carefully, then write the letter of your answer.

1. Which of the following is not an internal user of accounting information?

a. Business Owners b. Suppliers c. Field Workers
2. Which of the following is not an external user of accounting information?
a. Accountancy Student b. BIR Officials c. Manager
3. Employees are users of accounting information. What do you think they are
primarily concerned with?
a. The ability of the company to provide continuous employment opportunities
b. The amount of returns the owners have earned
c. The ability of the company to pay its debts
4. Internal users of accounting information are those who make decisions on
behalf of the organization.
a. The statement is true.
b. The statement is false.
5. Of the following external users, which would rarely examine a company’s
financial statements?
a. Creditors b. Clients c. General Public
6. External users of accounting information are those who are not part of the
company but need the company’s accounting information to make decisions.
a. The statement is true.
b. The statement is false.
7. Who of the following carries the responsibility of planning, organizing and
running a business?
a. Creditors b. Accountant c. Manager
8. What refers to institutions that use accounting information from the
financial statement of a company for academic purposes?
a. Academe
b. Bureau of Internal Revenue
c. Securities and Exchange Commission
9. For creditors, what information from a company’s financial statements is
the most important?
a. Profit of the Company b. Current Borrowings c. Both a and b
10. Which of the following refers to accounting information users planning to
invest in the company?
a. Creditors b. Employees c. Potential Investors
11. The difference between internal and external accounting users is
that________.
a. Internal users deal with the company daily.
b. Internal users are affected by the activities of the company.
c. Internal users make decisions on behalf of the company.
12. A business that invests money in another business is considered to be an
internal user of accounting information of the business it invests in.
a. The statement is true.
b. The statement is false.
13. The difference between a stockholder and a potential investor is
that________.
a. Stockholders have already invested their money into the business.

__________________________________________________________________________________________________________________________________
 b. Stockholders are considered owners of the business.
c. Both a and b.
14. Collectively, clients, buyers, and patrons are called________.
a. Creditors b. Employees c. Customers
15. Which of the following correctly states the difference between managers
and laborers vis-a-vis using accounting information?
a. Managers are internal users while laborers are external users.
b. Laborers are employed by the company while managers are not.
c. Managers use the company’s accounting information to make decisions for
the company, while laborers use it to make personal decisions.

ADDITIONAL ACTIVITIES

SOLVING EXERCISE

Do the Last Blow!

Hover through the cases below. Answer them on your answer sheet.

Case #1: Joshua is a BS Accountancy student. He also is a stockholder of

Imperial Inc. On the part of Imperial Inc., is Joshua an internal user or external
user? Support your answer.
____________________________________________________________________

Case #2: Ryan is a collection officer of HAMA Motor Dealer company. But he also
is a supplier of construction nails to different hardware shops in his locality. Can
Ryan be classified as an external accounting information user? How?
____________________________________________________________________

Prepared by:

LEIANE RUTH C. PURUEL

Subject Teacher
0915-158-5803

REFERENCES AND RESOURCES:

Most Essential Learning Competencies (MELCs)

Tugas, F., Salendrez, H., & Rabo, J., Manaligod, M.G., ed. Senior High School
Fundamentals of Accountancy, Business and Management 1 Textbook. Vibal Group

Florendo, J. (2016) Fundamentals of Accountancy, Business and Management 1. Rex

Book Store

https://www.investopedia.com/terms/b/business.asp

https://www.abcteach.com/documents/clip-art-box-bw-I-abcteachcom-29846