3. LEARNING OBJECTIVES:
At the end of the lesson, learners are expected
to:
• Define accounting
• Describe the nature of accounting
• Narrate the history/origin of accounting
• Define internal and external users of
accounting and give examples
5. ACTIVITY:
LIST DOWN ALL YOUR EXPENSES
EVERYDAY FROM THE TIME YOU
TRAVEL COMING TO SCHOOL, UP
TO THE TIME YOU’LL GO BACK
HOME. INDICATE YOU ALLOWANCE
PER DAY
6. GUIDE QUESTIONS:
1. HOW MUCH IS YOUR ALLOWANCE PER DAY?
2. HAVE YOU LISTED YOUR EXPENSES IN
CHRONOLOGICAL ORDER?
3. HOW MUCH DO YOU SPEND PER DAY?
4. HAVE YOU INFORMED YOUR PARENTS IF
THERE IS AN AMOUNT LEFT?
8. ACCOUNTING
•Is the mechanism by which an
organization’s economic events
are identified, registered and
distributed to interested users
9. • IDENTIFYING (I) – selection of economic
activities related to business transaction
*economic activities = transactions
• RECORDING (R) – maintaining a chronological
diary of events measured in pesos
• COMMUNICATING (C) – preparation and
execution of financial and other accounting
reports
10. NATURE OF ACCOUNTING
1. ACCOUNTING IS A SERVICE ACTIVITY
- it gathers financial data for the different
consumers to take decisions and fix business
problem
2. ACCOUNTING IS A PROCESS
- basic steps are taken such as: recording,
classifying, summarizing and reporting financial data
to produce results relevant to the management and
other potential users
11. NATURE OF ACCOUNTING
3. ACCOUNTING IS BOTH ART AND DISCIPLINE
- an art because it involves skills and
experience in its proper implementation,
discipline because it meets such principles and
professional ethics
4. ACCOUNTING DEALS WITH FINANCIAL
INFORMATION AND TRANSACTIONS
- it deals only with financial details and
financial information
12. NATURE OF ACCOUNTING
5. ACCOUNTING IS AN INFORMATION
SYSTEM
- it is known and defined as a
storehouse of information
13. FUNCTIONS OF ACCOUNTING
• KEEPING SYSTEMATIC RECORDS
ensures that the correct and relevant data is
organized and detailed to reflect the business's
economic standing
provides users, such as the management and
investors, with relevant information needed to
make informed decisions
14. FUNCTIONS OF ACCOUNTING
• PROTECTING PROPERTIES OF THE
BUSINESS
ensure that the business's assets are
monitored and performing well
keeps track of assets, most especially
cash, must be thorough to avoid fraud,
corruption, and theft
15. FUNCTIONS OF ACCOUNTING
• COMMUNICATING RESULTS TO VARIOUS
PARTIES
Aims to communicate financial health and
performance of a company effectively
produces accurate information essential for
internal and external users to make sound
decisions
16. FUNCTIONS OF ACCOUNTING
• MEETING LEGAL REQUIREMENTS
ensures that the company meets all the legal
requirements and regulations set forth by the
government
• examples:
○ trade and business standards
○ fair employment agreements
○ proper payment of taxes
17. HISTORY OF ACCOUNTING
MESOPOTAMIAN ERA (3600 BC)
- known as Mesopotamia’s
clay tablet where commercial
transactions are listed
- informal recording of
Money and trade-related information
18. HISTORY OF ACCOUNTING
• DOUBLE-ENTRY BOOKKEEPING
(14TH CENTURY)
- the most significant accounting
history disseminated by LUCA
PACIOLI, the founder of
Accounting. He introduced the
double entry of debit and credit
He paved the way to modern
accounting
19. HISTORY OF ACCOUNTING
FRENCH REVOLUTION (1700s)
- detailed study of accounting and the
advancement of accounting theory began
INDUSTRIAL REVOLUTION (1760-1830)
- during this time, mass production and great
value of fixed assets was given attention
20. HISTORY OF ACCOUNTING
19th CENTURY(QUEEN VICTORIA OF BRITISH EMPIRE)
- the beginnings of modern accounting in
Europe and America were formalized
THE PRESENT(20th CENTURY)
- the development of Modern Accounting
Standards and Commerce. Economies continue to
globalize
22. USERS OF ACCOUNTING
INFORMATION
• EXTERNAL/SECONDARY USERS
o Investors
o Lenders
o Suppliers
o Customers
o BIR/Tax authorities
o Government
o Auditors
o Public
