Takeaway Accounting Objectives E S P > Accounting and Finances>

Level A1.1 Starter

Instructor: Date:

Learner: Regional Branch:

Program: Center:

CONTENT
• Let’s Start! • Let’s Explore! • Let’s Practice! • Extension Activity • Target Words • Learning Points

Let’s Start!

Let’s talk about accounting!

Learning Outcome: Can Do Statements:

Understand basic concepts of accounting • I can give short and brief information
and finances. about the concept of accounting.
Talk about basic accounting
• I can name in a simple way the
management.
different objectives of accounting.

• I can describe briefly the accounting

Ask your partner: process.
• Do you think it is necessary to be
organized with your money?
• How important do you think is to have
accounting processes in a business?
Why?

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 Takeaway Accounting Objectives E S P > Accounting and Finances>
Level A1.1 Starter

Let’s Explore!

An Introduction to Accounting

Instructions: Read the text below.

Teresa: Good morning, Professor Francisco. I know you teach accounting. I need
your help, please.
Professor: Hi! Yes, of course. What do you need?
Teresa: I have some questions about it. Do you have some time?
Professor: Sure. Go ahead.
Teresa: Well, the first question is, what is accounting?
Professor: Well, accounting is the process through which companies record, classify,
and summarize financial transactions. Thanks to the accounting process, we
are able to know the profit or loss of the business over a period of time. We
also use the results of the accounting process to analyze a company’s
performance in the past and then plan a future course of action.
Teresa: Thank you so much, professor. That is a complete definition, but I don't
understand the main objectives of accounting.
Professor: The main objectives of accounting are to help a company collect financial
data, to keep organized records of financial transactions, to evaluate the
profits and losses on a specific period of time, to identify the real financial
situation of a business with balance sheets or financial statements, to help
managers take decisions for the future based on accurate financial data,
and to help in following and applying legal regulations.
Teresa: Wow! And in a few words, is the process of accounting difficult?
Francisco: It is not that it is difficult, but it surely involves a lot of tasks; for example,
collecting and analyzing financial documents, posting debit and credit
balances in journals or ledger accounts, preparation of trial balance, which
is basically a summary of the balances of ledger accounts, and preparation
of financial statements, just to name a few.
Teresa: I understand everything now. Thanks for your help, professor.
Professor: It’s OK. You’re welcome.

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 Takeaway
Takeaway Accounting Objectives E S P > Accounting and Finances>
Level A1.1 Starter

Let’s Practice!

Some Information about Accounting

Instructions: Circle the correct words to complete the sentence.

1. Accounting (is / are / was) the process of summarize financial transactions.

2. Accountants (considers / considering / consider) accounting as a universal business

language.

3. Accounting (classify / classifying / classifies) companies' records and accounts.

Let’s Practice!

Describing functions and processes of accounting.

Instructions: Complete the sentences by writing its corresponding word. Use capital
letter where necessary. Use: and / or / but.

1. Inside the accounting process, companies gather_____ collect balance documents.

2. In the accounting process, a company registers debit _______ credit balance in

journals.

3. With accounting, companies have to adjust balance, _______ they have to prepare
the trial balance too.

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 Takeaway
Takeaway Accounting Objectives E S P > Accounting and Finances>
Level A1.1 Starter

Extension Activity

Make a brochure explaining the importance of accounting for a company.

Instructions: Complete the following steps. Fill in the Self-Assessment.

a) Look for information about the Self-Assessment Yes No

importance and objectives of
accounting.
b) Make a brochure summarizing the 1. I find information about
main information you found. accounting importance.
c) Include in your brochure what kind 2. I recognize accounting
of tools companies use for making objectives.
an accounting process.
3. I identify what kind of
d) Share with the class your brochure tools companies use for
and include more advantages of accounting.
accounting process.

Target Words

• trial balance (noun): a compilation of • through (adverb): using; by means of.

all balances in a ledger, in a credit, and e.g. Finally, to follow and apply legal
debit columns, usually prepared at the regulations, such as a tax levy.
end of an accounting period.
e.g. A trial balance is basically a • few (adjective): not many; a small
summary of the balances of ledger number.
accounts. e.g. For example, the gathering of
balance sheet data, registering debits
• journal (noun): in business, it is the and credits in journals.
initial book of entry; a bookkeeping
record of financial transactions.
e.g. For example, the gathering of
balance sheet data, registering debits
and credits in journals.

• go ahead (phrasal verb): start;

continue.
e.g. What do you mean when you say
company ledger? Does it have any
relation to impersonal accounts?

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 Takeaway
Takeaway Accounting Objectives E S P > Accounting and Finances>
Level A1.1 Starter

Learning Points

Present Simple
You use the present simple to talk about general actions, routines, and general states
or habits.

You use the present simple to talk about the following actions, situations or events:
Facts and true situations
Examples:
A business has financial records.
Accounting processes include financial analysis and posting on ledger accounts.
A repetitive action or habit
Examples:
Accountants fill ledgers every month.
Every company needs a balance sheet.
True situations or conditions
Examples:
Accounting processes involve numbers.
Accounting provides options for balance sheets.
In the following chart, you can find the structure for the simple present tense.

PRESENT SIMPLE STRUCTURES

A trial balance contains profits and
For affirmative statements:
losses.
Subj. + verb (add –s if 3rd person: he, she
or it) + complement. Legislative Acts govern business
companies.
A trial balance does not contain
For negative statements:
profits and losses.
Subj. + aux v. DO- DOES not + main verb
base form + complement.
Legislative Acts do not govern
Note: When you use aux verbs, do not add
business companies.
– “s” to the third person.

For questions:
Does a trial balance contain profits
Yes/no questions:
and losses?
Aux verb DO –DOES + Subj. + complement
Do Legislative Acts govern business
+?
companies?
Where does a trial balance contain
-Wh. questions:
profits and losses?
Wh. Quest. Word+ aux verb DO or DOES+
Why do Legislative Acts govern
subj. + complement+?
business companies?

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 Takeaway
Takeaway Accounting Objectives E S P > Accounting and Finances>
Level A1.1 Starter

Learning Points

Examples
• I know you teach accounting.
• Do you have some time?
• It is not that it is difficult, but it surely involves a lot of tasks.
• That is a complete definition, but I don't understand the main objectives of accounting.

The Accounting Process

An accounting process is a structure that serves companies to keep a detailed
record of all the accounts, including loss and profits, as well as adjustments. It
varies in every organization according to the internal policies of the company.
The following are the basic steps in the accounting process:

Collecting and Analyzing Observe the source documents and examine them, such as
Accounting Documents sales and purchases.
Use journal entries with the double entry system in which
Recording in Journal
debit and credit balance remains equal.
To post debit and credit balances in ledger accounts. Such
Recording in Ledger
accounts are affected through journal entries. A ledger is
Accounts
simply a gathering of all accounts.
A summary of all the balances of ledger accounts with no
Preparation of Trial differentiation between debit and credit balance. It also uses
Balance the double entry system, showing the total of all the debit
and credit balance. It appears at the end of the accounting
period.
Recording of Adjustment Register any adjustment. First, in the journal, then in
Entries ledger accounts and finally, in the trial balance.
Stage to collect the adjusted trial balance, which is a
Preparation of Financial
platform to finally prepare the financial statement of a
Statements
company.
Income and Expenditure Account, Trading and Profit & Loss
Account, Cash Flow Statement, Fund Flow Statement,
Adjusted Trial Balance Balance Sheet or Statement of Affairs Account. All of them
are integrated with the Trial Balance for creating company
financial statements; those demonstrate the financial health
of the company.
In this part of the process, accounts of revenue and
expenditure start to integrate the Trading and Profit loss
Post-Closing Entries
account. The balance of all the accounts come to zero,
represented in the equity.
An opening balance is created for the company to represent
Post-Closing Trial
the post-closing Trial balance. It contains assets, liabilities &
Balance
capital account.