The document defines accounting and its nature. It discusses internal and external users of accounting. Examples are given of accounting activities like tracking financial transactions of a bakery business. Accounting helps business owners make decisions about profitability, sales targets, hiring needs, and obtaining funds. It allows for planning finances and managing expenses. The document provides examples to illustrate how accounting is used in daily life and business.

1. OBJECTIVES
• DEFINE ACCOUNTING AND ITS NATURE;
• EXEMPLIFY INTERNAL USERS AND
EXTERNAL USER;
• APPRECIATE THE ESSENCE OF
ACCOUNTING IN OUR DAILY LIFE.

2. ACTIVITY 1- NAME THAT PICTURE
•OBSERVE THE GIVEN PHOTOS IN FRONT:
•THE CLASS WILL BE DIVIDED INTO TWO (2)
GROUPS.
•EACH GROUP WILL OBSERVE THE PHOTOS AND
WRITE THEIR OBSERVATIONS ON THE BOARD.
• EACH CORRECT ANSWER WILL BE GIVEN 2
POINTS.

3. SALE OF BREAD

4. PURCHASE OF FLOUR

5. PURCHASES OF TRUCKS NEEDED TO
DELIVER THE PRODUCTS

6. BUSINESS OWNER/MANAGER

7. INVESTOR

8. SAMPLE PICTURES INTRODUCED SHOWS
ACCOUNTING CAN BE USED IN OUR DAILY
LIVES BECAUSE IT MAINTAINS AND EXPANDS
THE FINANCIAL HEALTH OF A BUSINESS.
ACCOUNTING PLAYS AN IMPORTANT ROLE IN
RUNNING A BUSINESS BECAUSE IT HELPS YOU
TRACK FINANCIAL INCOME AND
EXPENDITURES, MANAGEMENT, AND ENSURE
STATUTORY COMPLIANCE WHICH CAN BE
USED IN MAKING BUSINESS DECISIONS.

9. DISCUSSION
•THE NATURE OF ACCOUNTING
ACCORDING TO ACCOUNTING THEORY,
ACCOUNTING IS A SYSTEMATIC RECORDING OF
FINANCIAL TRANSACTIONS AND THE
PRESENTATION OF THE RELATED INFORMATION
TO APPROPRIATE PERSONS.

10. ACCOUNTING IS THE ART OF RECORDING, CLASSIFYING
AND SUMMARIZING IN A SIGNIFICANT MANNER AND IN
TERMS OF MONEY, TRANSACTION AND EVENTS WHICH
ARE, IN PART AT LEAST OF A FINANCIAL CHARACTER,
AND INTERPRETING THE RESULTS THEREOF.
ACCOUNTING IS THE PROCESS OF RECORDING
FINANCIAL TRANSACTIONS PERTAINING TO A
BUSINESS. THE ACCOUNTING PROCESS INCLUDES
SUMMARIZING, ANALYZING, AND REPORTING THESE
TRANSACTIONS TO OVERSIGHT AGENCIES,

11. CLASSIFYING – THIS INVOLVES SELECTING ECONOMIC
EVENTS THAT ARE RELEVANT TO A PARTICULAR BUSINESS
TRANSACTION. THE ECONOMIC EVENTS OF AN
ORGANIZATION ARE REFERRED TO AS TRANSACTIONS.
EXAMPLES OF ECONOMIC EVENTS OR TRANSACTIONS – IN
A BAKERY BUSINESS:
• SALES OF BREAD AND OTHER BAKERY PRODUCTS
• PURCHASES OF FLOUR THAT WILL BE USED FOR BAKING
• PURCHASES OF TRUCKS NEEDED TO DELIVER THE
PRODUCTS

12. •RECORDING – THIS INVOLVES KEEPING A
CHRONOLOGICAL DIARY OF EVENTS THAT
ARE MEASURED IN PESOS. THE DIARY
REFERRED TO IN THE DEFINITION IS THE
JOURNALS AND LEDGERS.
•SUMMARIZING – THIS OCCURS THROUGH THE
PREPARATION AND DISTRIBUTION OF
FINANCIAL AND OTHER ACCOUNTING

13. ACCOUNTING HELPS THE USERS OF THESE FINANCIAL
REPORTS TO SEE THE TRUE PICTURE OF THE BUSINESS IN
FINANCIAL TERMS. IN ORDER FOR A BUSINESS TO SURVIVE, IT
IS IMPORTANT THAT A BUSINESS OWNER OR MANAGER BE
WELL-INFORMED.
EXAMPLE:
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

14. EVERY DAY, MR. JUAN’S WIFE DEPOSITS THE DAILY
CASH SALES IN THEIR BANK ACCOUNT AT RCBC
SAVINGS BANK. WITH THE HELP OF ACCOUNTING,
WHAT POSSIBLE DECISIONS OR QUESTIONS OF MR.
JUAN CAN ACCOUNTING PROVIDE AN ANSWER TO?

15. GUIDE QUESTIONS TO COME UP WITH POSSIBLE
DECISIONS:
•IS MY BUSINESS EARNING? (PROFITABILITY)
•HOW MUCH DAILY OR MONTHLY SALES DO I NEED
IN ORDER TO RECOVER MY FIXED COST? (BREAK-
EVEN)
•DO I NEED TO HIRE ADDITIONAL WORKERS TO
HELP ME WITH MY PRODUCTION?
•CAN I AFFORD TO SET UP A NEW STORE IN
ANOTHER PLACE? WHERE DO I GET THE FUNDS?

16. PROBLEM
READ, ANALYZE AND ANSWER.
• THE APPLICATION OF ACCOUNTING MAKES IT EASIER
FOR US TO PLAN FINANCES IN THE NEXT PERIOD SO
THAT WE CAN HAVE HEALTHY FINANCES. FOR
EXAMPLE, THIS MONTH YOU GOT HIGH AMOUNT OF
ELECTRICITY BILL, THROUGH ACCOUNTING YOU CAN
MANAGE ALL OF YOUR EXPENSES AND REDUCE IT.
DURING THIS DIFFICULT TIME OF THE COVID-19
PANDEMIC, HOW DID YOU SPEND YOUR MONEY MORE

17. PROBLEM
READ, ANALYZE AND ANSWER.
• UPON THE START LIMITED FACE TO FACE
CLASSES YOU ARE GIVEN ₱500 BY YOUR PARENTS
AS AN ALLOWANCE FOR THE WHOLE WEEK. KINDLY
ENUMERATE ALL YOUR EXPENSES FROM HOME TO
SCHOOL AND FROM SCHOOL TO HOME FOR THE
WHOLE WEEK. HOW MUCH SAVINGS WILL YOU
MAKE?

18. QUESTION
HOW DO YOU SOLVE CASH ALLOWANCE
SHORTAGE, IN CASE THE GIVEN CASH
ALLOWANCE FOR THE WHOLE WEEK IS NOT
ENOUGH?

19. ACTIVITY: EVALUATION
DIRECTION: READ AND ANALYZE EACH ITEM AND CHOOSE THE LETTER
THAT CORRESPONDS TO THE CORRECT ANSWER. WRITE YOUR ANSWER
IN YOUR PAPER.
1. WHAT IS THE SYSTEMATIC RECORD OF THE FINANCIAL
TRANSACTIONS OF A BUSINESS?
A. BUDGETING C. ACCOUNTING
B. JOURNAL D. LEDGER
2. WHAT IS THE STEP-BY-STEP PROCESS TO RECORD BUSINESS
ACTIVITIES AND EVENTS TO KEEP FINANCIAL RECORDS UP TO DATE?
A. DAY-TO-DAY CYCLE C. GENERAL LEDGER

20. 3. WHAT INVOLVES IN SELECTING ECONOMIC EVENTS
THAT ARE RELEVANT TO A PARTICULAR BUSINESS
TRANSACTION?
A. CLASSIFYING C. ANALYZING
B. SUMMARIZING D. RECORDING
4. WHAT INVOLVES KEEPING A CHRONOLOGICAL DIARY
OF EVENTS THAT ARE MEASURED IN PESOS?
A. CLASSIFYING C. ANALYZING
B. SUMMARIZING D. RECORDING

21. 5. WHAT OCCURS THROUGH THE PREPARATION AND
DISTRIBUTION OF FINANCIAL AND OTHER ACCOUNTING
REPORTS?
A. CLASSIFYING C. ANALYZING
B. SUMMARIZING D. RECORDING
6. THE ART OF RECORDING, CLASSIFYING, SUMMARIZING
AND FINALIZING FINANCIAL DATA.
A. FINANCE C. ACCOUNTING
B. MARKETING D. ENTREPRENEURSHIP