Materials:

Lesson title: Overview of Accounting and Accounting Module #2

Concepts and Principles

Lesson Objectives:

1. Recognize the use and importance of accounting

business decisions. References:
2. Familiarize different form of business organization
and operations. Fundamentals of Financial
3. Properly identify the common branches of Accounting and Reporting by Win
accounting. Ballada

Productivity Tip:
Create a schedule and manage your time wisely.
Keep a semester and a weekly calendar. On the first day of class, read the course
syllabus and enter all due dates in your calendar, along with reminders for the due
dates.
Commit to studying or participating in your online class and activities.
Learn the difference between asynchronous and synchronous online courses and

LESSON PREVIEW/REVIEW
1. Introduction (2 mins)

Good day, class! Welcome to ACC 102: Fundamentals of Financial Accounting & Reporting. I will be your
class instructor for this subject. I am ________________________________ and you may call me
__________________. I’m very delighted to be part of your adventure! For today, let me discuss the overall
outline of this subject, including the topics we will discuss for the next periods, grading system, schedules
and policy rules and standards. Let me reminded you as well for some classroom etiquettes we must
observe:

ONLINE MEETINGS AND PHYSICAL CLASSROOM ETIQUETTES:

Be punctual both for online and classroom meetings.

Wear proper attire.
Choose a clean and non-distracting location.
 Mute yourself if you experience unavoidable background noise.
Be ready to take notes and give your full, focused attention.
Participate fully to all activities.
Should you have noted concerns about the topic, raise and ask immediately to your instructor.
Be more careful with your words when talking with your instructor and classmates.

MAIN LESSON
1. Activity 1: Pre-Printed Content Notes (13 mins)

Accounting plays an important role in assisting all forms of economic activity in the various sectors. Accounting
serves as the language of business which is helpful in business decisions. Without accounting, Business
owner or managers would not know which products were successful, and which decisions were the right ones.
With the help of an accounting, they would get an idea of how much to pay in taxes, capital required for further
projects, whether to lease or buy an asset, and so on. Accounting also helps investors to understand how
efficiently their capital or economic resources are being used.

Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature,
about economic entities that is intended to be useful in making economic decisions.

Types of information provided by accounting:

Economic Entities refer to

artificial persons” responsible for
“economic resources (limited supply,
can command a price); includes both
profit oriented and not-for profit
entities.
Business Entities pertains to entities

Quantitative – in numbers; quantities

Qualitative – in words or descriptive form
Financial – in money values

Functions or Phases of Accounting

1. Recording – recording business transactions

2. Classifying – sorting or grouping of similar accounts

3. Summarizing – preparing reports (financial statements)

4. Interpreting – analytical function

Users of Accounting Information

➢ Internal users – make decisions directly affecting the internal operations of the enterprise

Examples: Business owners, Corporate Board of Directors, Management, Employees.

➢ External users – make decisions concerning their relationship to the enterprise.

Examples: Investors, government agencies, creditors and suppliers, customers and the public.

FORMS OF BUSINESS ORGANIZATIONS

Sole Proprietorship – consists of one individual doing business called the proprietor. The manager is usually
the owner also. All profits belong to the proprietor.

Partnership – consists of two or more persons who bind themselves to contribute money, property, or industry
to a common fund, with the intention of dividing the profits among themselves. The co-owners are called
partners.

Corporation – is an artificial being created by operation of law, having the rights of succession and the
powers, attributes and properties expressly authorized by law or incident to its existence. The owners in a
corporation are called stockholders, evidenced by their holdings of shares of stocks.

Business entities are usually engaged in business operations that increase the value of the enterprise and
earn a profit. These activities are performed daily to generate sufficient revenues. See below table for the list of
business operations type.
 TYPES OF BUSINESS OPERATIONS

TYPE ACTIVITY STRUCTURE EXAMPLES

Hiring skilled staff and

Service Selling people’s time Accounting, Legal
selling their time

Buying raw materials

Trader / Wholesaler
Buying and selling
/manufactured goods and
product
Merchandising sell the same without Retailer
modification

Designing products,
combining Taking raw materials and Vehicle assembly Food
using equipment and staff and drink
Manufacturing
components & to convert them into
finished goods Pharmaceuticals
producing finished goods

Buying blocks of land and

Raw materials Growing or extracting raw
using them to provide raw Farming, Mining, Oil
production materials
materials

Transport (airport
Buying the operating assets
operator, airlines,
Selling the utilization of (typically large assets);
Infrastructure trains, ferries,
infrastructure selling occupancy often in
combination with services
buses) Hotels

Accepting deposits and

paying interest; extend
Receiving deposits, Banks
loans to
Financial lending and investing
money Lending companies
borrowers and charge fees
and a higher rate of interest

Collecting cash from

Pooling premiums of many customers; investing Insurance
Insurance many to meet claims of a the money to pay the losses
few experienced by a few companies
customers.
 BRANCHES OF

ACCOUNTING DESCRIPTION

Independent examination that ensures the fairness and reliability of the reports
Auditing
that the management submits to users outside the entity.

A mechanical task that involves collecting financial data, recording business

Bookkeeping
transactions and preparing financial statements.

Government Concerned with the identification of the sources and uses of resources consistent
Accounting with the provisions of city, municipal, provincial, and national laws.

Focused on the recording of business transactions and the periodic preparation of

Financial Accounting
financial reports. Information is primarily intended for external use.

Management
Incorporates cost accounting data and adapts them for specific decisions which
management may be called upon to make. Information is intended for internal use.
Accounting

Taxation/Tax
Includes the preparation of tax returns and the consideration of the tax
consequences of proposed transactions or alternative courses of action.
Accounting

1. Activity 2: Skill-building Activities (with answer key) (18 mins + 2 mins checking)

Getting-To-Know-You Activity

I know that since this is your first day, you are not familiar yet with your classmates. We will be having various
activities for this subject so to help you know them well and assist you with our activities; I want you to find an
‘accounting buddy’ from the class that will act as your teammate for the rest of the semester. But I want you to
get to know one another before you continue. So, as our first activity, each one will have a turn to introduce
him/ herself. Include in your introduction what you have learned from the main topic in a short but meaningful
statement. Once done, share with the class a screenshot photo of your team while doing the discussion.

1. Activity 3: What I Know Chart, part 2 (2 mins)

I am really curious about what you have discussed with your accounting buddy. Please provide in the below
table at least three (3) learning’s that you have shared with each other.
 1. Activity 4: Check for Understanding (5 mins)

Direction: Each item relates to our topic discussion. Write in the space provided the term that corresponds to
your answer.

_________1. This refers to the business that is owned and controlled by one person.

_________2. Certificate that certifies the ownership of stocks in a corporation.

_________3. Branch of accounting concerned with the identification of the sources consistent with the
provisions of city, municipal, provincial or national laws.

_________4. This can be broadly defined as the branch of accounting that prepares general purpose financial
statements to be used by parties both internal and external to the entity.

_________5. Software development is an example of ________________________ business.

_________6. This form of business is considered as the most common form of business organization in the
Philippines.

LESSON WRAP-UP
1. Activity 4: Thinking about Learning (5 mins)

You have accomplished this module, well done! Shade the number of this module that you have finished.
b) Think about your learning by filling up your “My Learning Tracker” below. Write your learning targets,
your scores, learning experience for this session and deliberately plan for our next learning session.

Date Learning Target/Topic Scores Action Plan

What module# did you do? What contributed to the quality of your performance
What were your scores in
What’s the date today? What were the learning targets? today? What will you do next session to maintain
the activities?
What activities did you do? your performance or improve it?

FAQs

1. Where does accounting started?

- The initial development of accounting where noted way back to ancient Mesopotamia, whre developments in
writing, counting and money and early auditing systems by the ancient Egyptians and Babylonians was also
started. Luca Pacioli, a Franciscan friar and a celebrated mathematician, was recognized as The Father of
accounting and bookkeeping as he was the first person to publish a work on double-entry bookkeeping, and
introduced the accounting field in Italy.

2. What are the activities performed by the business organizations:

- Business activities refer to all the economic activities, whether directly or indirectly related to making the
goods and services available to the consumer and ensure profit earning through customer satisfaction.
Business organizations mainly perform the following business activities: Financing, Investing, and operating
activities.

a. Financing activities – this includes the methods an organization uses to obtain financial resources from
financial markets and how it manages these resources.

b. Investing activities – involve the selection and management of resources that will be used to develop,
produce, and sell goods and services.

c. Operating activities – involve use of resources to design, produce, distribute, and market goods and
services.
3. What are the phases of accounting process?

- In order to be useful, all accounting transactions must be measured in terms of financial denomination. To
measure a business transaction, the accountant must decide when the transaction occurred (recognition
issue), what value to place on the transaction (valuation issue) and how components of the transaction should
be classified (classification issue). To be useful in making financial decision, data must be classified and
summarized, which is achieved through preparation of financial statements and summarization of effects of all
business transactions. The result is then interpreted or analyzed to evaluate the liquidity, profitability, and
solvency of business organization.