I.

Objective
Define accounting and describe the nature of accounting
Explain the accounting process
Appreciate the importance of accounting
II.Subject Matter
 Topic: Accounting as an Information System
 References: Fundamentals of Accounting, Business, and Management 1, page 1-8
 Materials: Laptop with LCD Projector
III. Procedure
A. Initiating Phase
a. Prayer
b. Checking attendance and Physical Classroom Environment
B. Developmental Phase
1. Motivation

Teachers Activity Students Activity

Class let’s start the lesson by defining what
is accounting. Yes Castro?
Sir, 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
decision.

That’s right, another one? Yes Maika? Accounting is the process of identifying,
measuring and communicating economic
information to permit informed judgement and
decision by users of information.

Correct. To summarize all the definition,

accounting is an information system that
measures, processes and communicate
information, which are primarily financial in
nature, about an identifiable entity for the
purpose of making economic decisions.

2. Introduction

Accounting has been referred to as the language Sir because it is the communication link between
of business. Why do you think it is referred as the the entity and the users of financial information.
language of business? Yes Carol?

Correct.

These users of financial information are decision-

makers. Example, an investors of the company.
They use financial information to determine
whether the entity can still pay dividends.

Accounting discipline dates back to the late 1400 Sir, it contained descriptions of the practice of
in Italy where the Father of accounting Fra Luca accounting that time.
Pacioli published a book entitled Summa de
Arithmetica, Geometrica, Proportioni et
Proporionlita in 1494. What do you think does it
contain?

Correct!

Accounting information system starts with the

business activities that are documented. These
documented business activities that is measured
in money is called supporting accounting
documents.

Where exactly are these documents recorded?

Yes Ryan? It is recorded in the accounting books called
accounting journals.
Correct. Journal entries are classified and
summarized. The classified transaction become
the source of financial reports rendered to the
users of financial statement.

3. Activity

Before we proceed to the discussion let us have a  Analyzing

short activity. Will divide the class into two  Recording
groups. I will show on the screen the whole  Classifying
accounting process but not in right order.  Summarizing
Arrange the process in the right order based in  Reporting
your own understanding. Prepare for questions  interpreting
after presentation.

 Summarizing
 Analyzing
 Reporting
 Recording
 Interpreting
 Classifying

4. Analysis

Explain why you arrange it in that order. (Students opinion)

5. Abstraction

Accounting is the art of analyzing financial

transactions and economic events, recording,
classifying them into accounts, summarizing,
reporting, and interpreting the results.

Analyzing. The first phase of accounting process.

The accountant must look at the transactions
entered into, economic events that have been
taken place, and determine their effects on the
business.

Recording involves writing the effects of the

transactions and events that have been analysed.

Classifying is the sorting or grouping of similar

transactions and events into specific account
titles.

Summarizing is the process that involves

grouping together the various accounts referred
to in the classifying process.
 Reporting involves the preparation of financial
summaries called financial statement.

Interpreting is the last step in the accounting

process. It is the step that direct attention to the
significance of various matters and relationships.

Business entity concept. Under this concept the

entity is separate from the owners, managers,
and employees who constitute the entity.

Double entry system. It means that for every

transaction or economic event, there are at least
two effects in the accounting equation.

Purpose of the Financial is to provide information

about financial position, result of operation and
cash flows of enterprises and individuals.

6. Application

Group the class into 3 and let them discuss and (Students opinion)
share their opinion about accounting before and
after the discussion.

IV. Evaluation
a) Analyzing
b) Recording
c) Classifying
d) Summarizing
e) Reporting
f) Interpreting

_____________1. The process of grouping similar transactions and events together.

_____________2. The process of explaining the relationships of the different items in the financial
statement.

_____________3. The process of determining the effects on the different accounts of the documented
transactions of economic events.

_____________4. The process of writing in the journal the effects, whether increases or decreases, of
analyzed transaction and events.

_____________5. The process of identifying the relationships of various items in the financial statement
and pointing out their effects and importance to decisions to be made by their users.

_____________6. The process of preparing balance sheets, income statements, and statement of cash
flow.

V. Assignment
Identify the financial statement user who may be interested in:
1. Taxes to be paid and already paid by tax payer
2. Fringe benefits
3. Volume of production
4. Return on capital
5. Relation of cash available and loans to be paid