Accounting Concepts and Principles PDF

 OBJECTI VE: After the lesson, atleast 90% of the learners define accounting.  A number game There are numerous successful businesses both locally and internationally. Some top-of- mind companies include Microsoft, Apple, Coca- Cola, and Procter...

 OBJECTI VE: After the lesson, atleast 90% of the learners define accounting.  A number game There are numerous successful businesses both locally and internationally. Some top-of- mind companies include Microsoft, Apple, Coca- Cola, and Procter and Gamble, etc. Here in the Philippines, surging businesses include Puregold, Petron, Globe, and many others. Obviously, these businesses offer products which are distinct from one another. Have you ever wondered about the secret formula for a company’s success? The common factor among these businesses that contribute to their success - accounting.  Group Activity Group yourselves into 4. Put all your things together and classify them accordingly. Count how many are there in each item and record it. Put a certain price for each item and compute for the amount. Compute for the total amount of all the items. Assign somebody in your group to write your answers/tally on manila paper and someone to report. Please do this in 5 minutes.  Process Questions: 1. How did you find the activity? 2.What do you think is the relationship of your group work to our lesson for today? 3. How do you define accounting based on the activity that you have done?  Define Accounting ACCOUNTING – is an art of recording, classifying, summarizing business transactions and interpreting the results thereof. -It involves the process of identifying the events that affect a business, recording these events, and communicating the summarized results of all events within a particular period to interested parties.  Accounting involves the processes of identifying, recording and communicating financial information to internal and external users alike. It helps quantify data for easier information. Numbers is a language of business. In order to efficiently manage your business, you need to know numbers. After gathering the data on the performance of the company, these are summarized and used as a guide for future decision- making. Accounting - is a tool used in achieving all these goals. How will the manager know if the company is doing  From the above mentioned definition of accounting, do you think there is a process in accounting?  The Accounting Process 1.Identification of economic events – Relevant economic events – transfer of things with value. 2. Recording of relevant economic events - Systematically and chronologically 3. Summarize all the recorded economic events into accounting -for a reports. period -meaningful and presentable financial statements  Review Questions: 1. Explain briefly the subject accounting. What are its purposes? 2. Explain the three- step process of accounting. Explain the role of an accountant in each step. 3. What is a relevant economic event? Give example of relevant economic events.  ASSIGNMENT What are the nature of accounting? Describe each nature.  The Nature of Accounting 1. Group yourselves into five. 2. You are to be given a picture in the slide for each group. 3. Take a picture of the picture in the slide assigned to your group. 4. Collaborate with Your groupmates the meaning or connotations of the assigned picture to your group. 5. You are given 5 minutes to collaborate and 3 minutes for each group to report. Group 1 Group 2 Group 3 Group 4 Group 5 Group Reporting  The Nature of Accounting - It is composed of multiple 1. Accounting is a steps process that lead to a common end 2. Accounting is - Agoal. way of performing something an art with creativity and skill to help attain the objectives. 3. Accounting deals with financial information and transactions -only quantifiable financial transactions 4. Accounting is a means and not an end - A tool to achieve your objectives 5. Accounting is an information system - a storehouse of Now let’s enumerate and describe again the nature of accounting: 1.Accounting is a process 2. Accounting is an art 3. Accounting deals with financial information 4. Accounting is a means and not an end 5. Accounting is an information system  Functions of Accounting The American Accounting Association (AAA) defines accounting as“the process of identifying, measuring, and communicating economic information to permit informed The American Institute of Certified Public judgements Accountants and decisions by the users of information.” (AICPA) 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  From the foregoing definitions, the main functions of accounting can be summarized as follows: 1. Keeping systematic record of business transactions. 2. Protecting properties of the business. 3. Communicating results to various parties in or connected with the business. 4. Meeting legal requirements.  Review Questions : 2.What are the main functions of accounting? Explain each function.  HISTORY OF ACCOUNTING It is believed that the history of accounting is thousands of years old and can even be traced to ancient civilizations. A number of History books suggest that the early development of accounting can be dated back to ancient Mesopotamia. During those times, peoplefollowed a system of  The reign of Emperor Augustus (63BC – 14Ad) provided more evidence about the development of accounting. The Roman government kept detailed financial information of the deeds of Emperor Augustus regarding the Stewardship of Roman resources. This is evidenced by the Res Gestae Divi Augusti (The Deeds of the Divine (tax officials) , and in the hands of the publicani (public contractors); and that it included the names of the freedmen and slaves from whom a detailed account could be obtained. The closeness of this information to the executive authority of the emperor is  Many consider the dissemination of the double-entry bookkeeping of Luca Pacioli in the fourteenth century Italy is the most important event in accounting history. In fact, Luca Pacioli is acknowledged as the father of modern accounting because of this. The double-entry bookkeeping system is defined as any bookkeeping bookkeeping. The double-entry bookkeeping system is the system being used to this very The day.modern profession of the chartered (Sangster et accountant al, 2007)in Scotland in the originated nineteenth century when Queen Victoria granted a Royal charter to the Institute of Accountants in Glasgow. At Present Times, accounting standards are already  Individual Activity/Assignment As discussed in the “History of Accounting” , Accounting is used even in the early ancient periods. In a one-page paper, give at least three examples of how people from earlier periods made use of accounting process. How did the  Chapter Summary Accounting is a system that identifies, records and communicates Relevant economic events to interested users. Nature of Accounting : Accounting is a process; an art; deals with financial information and transactions; a means, not an end; and an informationofsystem. * Functions accounting in business: Keeping systematic record of Business transactions; protecting properties of business; Communicating the results to various parties interested in or Connected History ofin Accounting: From the business; andits early development meeting legal in Mesopotamia requirements. to the modern accounting system used in the present day.