Accounting involves identifying, recording, and communicating economic events of a business. It identifies relevant events like sales and purchases. Recording involves keeping a chronological record of monetary transactions in journals and ledgers. Communicating is done through preparing and distributing financial reports. Accounting started as early as 3600 BC with record keeping on clay tablets in Mesopotamia. Luca Pacioli is considered the Father of Accounting for disseminating double-entry bookkeeping.

1. Introduction to
Accounting

2. Do your parents ask how
you spend your
allowance every day?

3. When buying a drink do
you compare prices and
then decide?

4. When going home, do you
choose to walk from school
rather than riding a
motorcycle because
you want to save?

5. What is
Accounting?

6. “Accounting is the process of:
IDENTIFYING,
RECORDING, and
COMMUNICATING
economic events of an organization to
interested users.”
Identifying
- involves selecting
economic events that
are relevant to a
particular business
transaction.
Example:
Sales of bread
Purchase of materials

7. “Accounting is the process of:
IDENTIFYING,
RECORDING, and
COMMUNICATING
economic events of an organization to
interested users.”
Recording
- involves keeping a
chronological diary of
events that are
measured in pesos.
The diary referred to
in the definition are
the:
journals and ledgers

8. “Accounting is the process of:
IDENTIFYING,
RECORDING, and
COMMUNICATING
economic events of an organization to
interested users.”
Communicating
- occurs through
the preparation and
distribution of
financial and other
accounting reports

9. Nature of
Accounting

10. Accounting is…
• A service activity
• A process
• Deals with financial information and transactions
• An information system

11. When
Accounting
started?

12. • Around 3600 B.C., record-keeping was already
common from Mesopotamia, China and India to
Central and South America. The oldest evidence of
this practice was the “clay tablet” of Mesopotamia
which dealt with commercial transactions at the time
such as listing of accounts receivable and accounts
payable
• Luca Pacioli – “The Father of Accounting”
- dissemination of double entry bookkeeping

13. • Mr. Juan is a retired government employee who is good at
baking. One day he decides to put up a bakery shop in your
barangay. He renovates a portion of his house to serve as the
area for the production of bread. He purchases baking
equipment and raw materials to produce five different types of
bread. Mr. Juan also hires Jose to help him with the baking
and, at the same time, to be in-charge of sales. Mr. Juan pays
Jose on a weekly basis. Every day, Mr. Juan’s wife deposits
the daily cash sales in their bank account at XY Savings Bank
With the help of accounting, what possible decisions or questions of
Mr. Juan can accounting provide?

14. Short Quiz!
1. Define Accounting.
2. Give 5 example of economic events relevant to the
business.
3. How to record business transactions?
4. Who is the father of accounting?
5. What is the evidence found in Mesopotamia that record-
keeping already existed in Mesopotamia?
6. What is the function of accounting?