SACRED HEART OF JESUS MONTESSORI SCHOOL

J.R. Borja Extension, Gusa, Cagayan de Oro City

Montessori-Based Learning
Learning Instructional Packets (LIPs)

OFFLINE-PICK-UP

Accounting (1 hour/week)
First Quarter

Week -1
Lesson : Introduction to Accounting

Teacher: Liezl A. Deloso

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SACRED HEART OF JESUS MONTESSORI SCHOOL
J.R. Borja Extension, Gusa, Cagayan de Oro City
 Montessori-Based Learning
Learning Instructional Packets (LIPs)
Accounting
S.Y 2021-2022 (September 4, 2021

Name: ________________________________________________ Date submitted: ________________

Grade & Section: ______________________________________ Teacher: _______________________
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Content Standard:
• The students will understand the importance of Accounting in businesses and in one’s day to day life.

Performance Standard:
• The students can explain the importance of Accounting in businesses and in one’s day to day life.

I. LEARNING COMPETENCY
• The students will be able to describe how Accounting helps businesses and in one’s day to day life.
Objectives:
1. Identify what business activities that needs Accounting.
2. Give examples of how Accounting help

II. LEARNING CONTENT

Lesson 1: Why Study Accounting?
Lesson 2: Definition of Accounting, its process, nature and functions and its history.

Materials:
1. LIPs

References:
1. K to 12 Curriculum Guide
2. Accounting, Second Edition
By: Atty. Graciano B. Neri, Jr.
3. Accounting for Non-Accountants
By: Michael P. Cañares, CPA, 2018 Edition
4. Fundamentals of Accountancy, Businessand Management 1
1st Edition, by Joselito G. Florendo

III. LESSON PRESENTATION

A. Why study Accounting?

• Economic Understanding
Individuals, businesses, governments constantly make economic decisions. The individual makes economic decisions on how
he will allocate his income to his various needs. Businessmen make decisions to grow and expand their businesses. Governments
make economic decisions on its budget and revenues needed to meet its expenditures. These decisions can be made soundly when
financial facts are made available through Accounting.

• General Education
General education should include understanding of all aspects of life. Accounting provides definite and specific opportunities
for everyone, regardless of his future occupational goal to learn the language and problems of businesses and how to interpret
intelligently business and economic conditions. By understanding accounting, you will understand how businesses make money.
Accounting is also a personal tool that provides the needed skills to manage one’s finances. It allows us to budget our income and
determine how much we spend on our expenses.

• Vocational Education
The study of Accounting prepares people for employment and in business. Knowledge in accounting is
useful to many kinds of workers in different businesses. A typist prepares statements and other reports dealing with bookkeeping
terms, transactions and records. A salesman records cash and charge transactions and is often required to keep records or assist in
inventory work. Bookkeeping helps executives understand the problems of business and make sound business decisions.
Accounting is one of the highest paid profession. Accountants often become the top executives of businesses.
 B.) What is ACCOUNTING
Accounting is “an art of recording, summarizing, classifying in a significant matter and in terms of money,
transactions and events, which are in part, at least of financial character and interpreting the results thereof.” (American Institute of
Accountants)
It is a system that helps businesses track business events that affect them.
It involves identifying the events that a affect a business, recording these events, and communicating the
summarized results of all events within a particular period to interested users.

Accounting concerns itself with organizing, presenting and interpreting financial facts pertaining to a business. The basic
objectives of Accounting therefore are:

Ø Preparation of a statement that will state fairly and explain, the properties and the property rights of a business as of a specific
date, Balance Sheet (BS).

Ø Preparation of a statement that will state fairly and explain the amount of net income earned by a business over a specified
period of time, Statement of Income, Profit and Loss Statement or Income Statement.

Process of Accounting
• Identification of the economic events relevant to the business.
The starting point of the Accounting process is the identification of relevant economic events. To be identified as a relevant
economic activity, there should be a transfer of things with value. For example, in the purchase of an equipment, cash or money is
exchanged for the equipment. The cash and the equipment have value making the purchase a relevant economic event.

• Recording the relevant economic events.

After the business identifies the relevant economic events, it records these events. Recording should be done in a systematic
and chronological for easier tracking and interpretation. Records of events are inputted in accounting books.

• Summarizing all the recorded events into accounting reports.

After a specific period (monthly, yearly), all recorded economic events are summarize into accounting reports. The most
popular accounting reports are the financial statements.

Nature (Basic Features) of Accounting

• Accounting is a Process – it is composed of multiple steps that lead to a common goal. It is a process because it performs the
functions of identifying, recording and communicating economic events with the end goal of providing information to the
internal and external parties.

• Accounting is an Art – Art refers to a way of performing something. It entails creativity and skills to attain something.
Accounting is the art of recording, classifying, summarizing and finalizing financial data. It requires skill and expertise.

• Accounting deals with financial information and transactions. It deals only with quantifiable financial transactions. These are
the only events identified by the accountant, recorded in the books, and communicated to different parties. Non-financial data
may be used to interpret and better estimate financial data.

• Accounting is a means, not an end. Accounting is a tool to achieve specific objectives, not the objective itself.

• Accounting is an information system. It is a storehouse of information. It collects processes & communicates financial
information of any entity.

Functions of Accounting
• Keeping systematic record of business transactions.
Recording transactions does not only involve entering the transactions in the accounting books. The records should be
systematic to enable easy understanding. No matter how comprehensive the records are, if they are not produced
systematically, it provides little to no value.

• Protecting properties of the business.

Accounting records serve as evidence that properties of a business do exist or how much of a particular resource does a
company have. If the records show that the amount of cash should be P 1,000,000, any excess and deficiency will be noticed
immediately. The accounting system also helps in prevent employee fraud and misappropriation of company resources.

• Communicating results to various partners in or connected with the business.

Accounting reports produced at the end of each period are not only used by external parties (investors, government agencies)
but also by the management in their decision-making function. Communication of the results of operations of a company is
essential to all concerned parties to enable them to take well-informed decisions.

• Meeting legal requirements.

The government requires some companies (particularly those with public accountability) to provide financial reports
quarterly, semi-annually or annually. This aims to protect the public by providing them the necessary information to make
sound decisions. The government also requires reports from heavily regulated industries such as the energy and oil industries.
History of Accounting

• The history of Accounting is thousands of years old and can be traced back to Mesopotamia, which is
the “Cradle of Civilization”, it is a region between two rivers(Tigris & Euphrates), now mostly Iraq. During these times, people
followed a system of writing and counting money. The development of Accounting may be related to taxation and trading
activities of temples.

• The reign of Emperor Augustus(63BC-14AD) provided more evidence about the development of
Accounting. The Roman government kept detailed financial deeds of the emperor regarding stewardship of Roman resources.
Roman historians Suetonius and Cassius Dio recorded that in 23BC, Augustus prepared a rationarium (account) which listed
public revenues, the amounts of cash in the aerarium(treasury), the provincial fisci(tax officials)and in the hands of the publican
(pubic contractors) that included the names of freedman and slaves from whom a detailed account could be obtained.

• Luca Pacioli of Italy, (Father of Modern Accounting) in the 14th Century introduced the double-entry
bookkeeping, a bookkeeping system that has a debit and a credit for each transaction. The double entry bookkeeping system is
being used until today.

• The start of the modern profession of the chartered accountants originated in Scotland in the 19th
Century when Queen Victoria granted a royal charter to the Institute of Accountants in Glasgow.

• At present, accounting standards are available to guide accountants in the practice of their profession.
These standards include Philippine Financial Reporting Standard(PFRS) and the Philippine Accounting Standards(PAS).