CHAPTER I

THE PROBLEM AND ITS BACKGROUND

Rationale

According to Krackoff (2019) having credentials beyond work

experience is a good way to differentiate yourself and make yourself a

competitive candidate for jobs and promotions going forward. Passing the

bookkeeping assessment examination is a stepping stone to every

accountancy student or aspiring bookkeepers. As the Filipino workforce

goals is to develop world-class competence and positive work values

providing quality technical and skills regardless of not having a four year

degree course. TESDA offer a short course in bookkeeping that last for

292 accumulated hours. This short course provides training in different

areas of competency: Basic Competency, Common Competency and Core

Competency. The Basic Competency is comprises lead workplace

communication as well as small team, develop and practice negotiation

skills, solve problems related to work activities, use mathematical

concepts and techniques, and use relevant technologies; Common

competencies includes applying quality standards, perform computer

operations, maintain an effective relationship with clients and customers

and manage own performance; Core Competency trains you to journalize

transaction, post transactions, prepare trial balance and financial

reports, review internal control system.

According to Win Ballada (2018), bookkeeping is a mechanical task

involving the collection of basic financial data. The data are first entered

in the accounting records or the books of accounts, and then extracted,

classified and summarized in the form of income statement, balance

sheet, and cash flow statement. This process normally takes place once a

month. Bookkeeping ensures that the data is timely, comprehensive and

has accurate records, and provides the information from which accounts

are prepared. The bookkeeping procedures usually end when the basic

data have been entered in the books of accounts and the accuracy of

each entry has been tested. At that stage, the accounting function takes

over.

Accounting is the process of identifying, measuring, and

communicating economic information to permit informed judgments and

decisions by users of the information. It is the art of recording,

classifying, and summarizing in a significant manner, and it is an

information system that measures, processes, and communicates

financial information about an identifiable economic entity.

 The accounting cycle is a series of sequential steps or procedures

to accomplish the accounting process. The steps in the cycle are as

follows: 1) identification of events to be recorded 2) Transaction are

recorded in the journal 3) Journal Entries are posted to the ledger

4)preparation of a trial balance 5) Preparation of the Worksheet including

adjusting entries 6) Preparation of the Financial Statements 7) Adjusting

Journal Entries are Journalized and Posted 8) Closing Journal Entries

are Journalized and Posted 9) Preparation of a Post-Closing Trial Balance

10) Reversing Journal Entries are Journalized and Posted. This cycle is

repeated each accounting period (Ballada, 2018). In summary, the

Accounting Cycle is a collective process of identifying, analyzing, and

recording a company's Accounting events. The series of steps begin when

a transaction occurs and ends with its inclusion in the Financial

Statements. Additional Accounting records used during the Accounting

Cycle shall follow a methodical set of rules to ensure Financial

Statement’s accuracy and conformity.

According to bitaccounting (2021) there has always been some

intersection or focal point between accounting and bookkeeping sectors.

Both due to the same nature and lies under the same department that is

managing the financial data of the company. Both accounting and

bookkeeping deal with financial data, require basic accounting

knowledge and classify and generate reports using financial transactions.

Bookkeeping and accounting both form part of the accounting

cycle: bookkeeping primarily covers the financial recordkeeping aspects,

which form the first stage of the accounting cycle, while accounting

involves the use of financial records to prepare reports, conduct financial

analysis, and produce financial information.(oxbridgeacademy.edu,

2021).Many people, especially those who are not in the field of

accounting tend to misconceive bookkeeping from accounting and vice-

versa. Oftentimes, people say that accounting and bookkeeping are the

same. However, it is vital to note that although bookkeeping and

accounting share similar nature, they do not alternate one another. In

fact, the latter is the first step toward the former, i.e., bookkeeping is a

stepping stone to accounting. In the end, accounting is a more detailed

and analytical process than bookkeeping.

Someone has to fully understand that the Accounting Cycle

attained through a solid foundation of critical analysis of the Basic

Accounting Principles, Concepts, and Framework ( Martin, Jr., N. A.,

Patacsil, D., Retuerne, R., & Gali, D. (2020)

 The researchers conducted this study to offer help to students who

are not aware of the benefits given by NC III Bookkeeping. The

accountancy students are the ideal respondents for this because

accounting and bookkeeping are interrelated and a precise to be studied.

Furthermore, to help the students on establishing their foundation in

accounting and improve their skills. It can also serve as an ideal career

to those respondents that aced the assessment test by discovering that

they are good at it. This study also aims to help the University of Luzon

College of Accountancy (UL COA) faculty and staffs to improve their

tactics and teaching styles and to maintain the competency of the college

in the academe. The researchers aim to be part of the vision and mission

of University of Luzon which is to provide leadership and excellence in

education for total purpose driven human development and to provide

quality education for the development of competent, productive and

principled professionals and entrepreneurs. This research study will seek

to find the correlation of the performance of the students in Bookkeeping

Assessment NCIII and their mastery of the accounting cycle in Basic

Accounting Subject to proposed measures that are useful in helping the

students to be globally competitive in Accountancy profession.

Theoretical Framework

Kate Bluest (2019) explained that “accounting process involves

recording, interpreting, classifying, analyzing, reporting and

summarizing financial data.” Although “bookkeeping and accounting

can appear to be the same profession to the untrained eye,” (Bluest,

2019) and both bookkeeping and accounting involve financial data,

bookkeeping is responsible for the process of recording transactions

while accounting does all parts of the accounting process. However,

since recording financial transactions is the first part, bookkeeping

then acts as the foundation of the accounting process making

bookkeeping play a vital role in the field of accounting.

According to James W. Baker in his 20 th Century Accounting and

Bookkeeping, “bookkeeping is the systematic recording of the

financial facts in regard to a business enterprise.” The term

accounting is more comprehensive than the term bookkeeping, and

may be said to include the latter. Bookkeeping deals primarily with

the recording of financial facts, while accounting treats of their

classification, presentation, and interpretation. The bookkeeping is

 the medium through which the accounting results are obtained, while

accounting prescribes how this record should be kept. Neither can be

studied nor used independently of the other. (James W. Baker, 2011)

The concept of Bluest is more applicable to this study than Baker’s

definition. Bluest emphasized the similarities of the two variables of

this study, while Baker highlighted the limitations of bookkeeping and

the extent of accounting. However, they both share the same

conclusion regarding with the correlation of bookkeeping and

accounting. Both literatures stated that bookkeeping covers the

fundamentals of accounting and that accounting cannot proceed

without the accomplishment of the bookkeeping process.

Conceptual Framework

The following areas that the researchers focused are the objectives

of the study to measure the mastery of students in Accounting cycle

The researchers have analyzed the flow of processes in determining

the correlation of NCIII Bookkeeping assessment and the student’s

mastery of accounting cycle in the Basic Accounting subject through an

assessment and its importance.

 INPUT PROCESS OUTPUT

A CORRELATIVE STUDY DETERMINING THE

OF THE PERFORMANCE PERFORMANCE OF THE
OF STUDENTS IN NC III STUDENTS THROUGH established basic
BOOKKEEPING ASSESSTMENT IN THE accounting skills
ASSESSMENT AND THEIR AREA OF:
MASTERY OF THE 1.) Journalizing Entries -mastered
ACCOUNTING CYCLE IN
BASIC ACCOUNTING
2.) Posting Transactions accounting cycle
3.) Preparing Trial Balance
SUBJECT IN UNIVERSITY
OF LUZON COLLEGE OF 4.) Preparing Financial
ACCOUNTANCY Reports

Feedback

Figure 1: Research Paradigm

Statement of the Problem

This study aims to assess the relationship of taking bookkeeping

NCIII program and basic accounting subject centering to the mastery of

Accounting cycle of the students.

Specifically, this investigation purports to answer the ff questions:

1. What is the performance of Bookkeeping NCIII Assessment takers

in:

a. Journalizing Entries

b. Posting Transactions

c. Preparing Trial Balance

 d. Preparing Financial Reports

2. What is the mastery of the students in Basic Accounting focusing

on:

a. Journalizing Entries

b. Posting Transactions

c. Preparing Trial Balance

d. Preparing Financial Reports

3. What step in accounting cycle does the students encounter

difficulty?

4. What is the extent of relationship between NCIII Bookkeeping and

Basic Accounting in the mastery of accounting cycle?

This research attempts to provide answers to the following queries:

1. Demographic profile of the respondent

a. Gender

b. Bookkeeping NCIII holder or non-holder

2. What is the mastery performance of the respondents in the areas

of:

a. Journalizing Entries

b. Posting Transactions

c. Preparing Trial Balance

 d. Preparing Financial Reports

3. Time Frame of taking the bookkeeping NCIII Assessment:

a. Before enrolling in the basic accounting subject

b. While taking the basic accounting subject

4. What are the significant influences of taking the Bookkeeping

Assessment in the students’ mastery of the accounting cycle

5. What are possible recommendations:

Hypothesis

The researcher proposed two hypotheses in this research. They are

Null Hypothesis (Ho) and the Alternative Hypothesis (Ha).

1. Ho: There is no correlation of the performance of students in

NCIII Bookkeeping assessment and their mastery of the

accounting cycle in basic accounting subject

2. Ha: There is correlation of the performance of students in NCIII

Bookkeeping assessment and their mastery of the accounting

cycle in basic accounting subject

Scope and Delimitation

This study focused in determining the relationship of the students’

performance in NCIII Bookkeeping Assessment and their mastery level of

the accounting cycle in Basic Accounting .This study limits the coverage

on the second year students of UL COA.

The Assessment that the researchers conducted and will be

answered by the respondents covers journalizing and posting

transactions, preparing trial balance, and preparing financial reports

The study delimits extent concerning the student’s performance in

Basic Accounting subject, review of internal control system as part of the

assessment. The study did not survey the first year who’s currently

taking the basic accounting subject, third- and fourth-year students who

have undergone and taken advance subject in relate to accounting.

Significance of the Study

This study will be undertaken to find out the relationship of the

students’ performance in Bookkeeping NCIII assessment and their

mastery of the accounting cycle in Basic Accounting subject. The result

of this study will benefit the following:

UL Accountancy Students

This study will help the accountancy students especially the

incoming first year to assess their knowledge along with their aptitude in

working with numbers and analyzing skills in Basic Accounting subject

by determining their level of mastery in accounting cycle. In addition, the

findings of this study will serve as their reference whether to have an

interest in taking Bookkeeping NCIII Assessment or not before entering

college basing by the time frame, as being Bookkeeping NCIII holder

presents as a credential of students in accounting field and provides

background preparation in Basic Accounting subjects.

UL COA Faculty Members

This study will help the Faculty and Staff to determine the level of

mastery of the students in introductory accounting to make an

adjustment or improvements in their teaching method to develop new

proficiency, which in turn helps to improve students learning.

Administration

This study will guarantee that the College of Accountancy is a part

of the learning institution in accordance with their level of competency,

chasing progression and expansion through undertaking such

accomplishments for the benefit of the University of Luzon.

Future Researchers

This study will serve as reference and will provide them facts

needed to compare their study in during respective time and usability for

future studies of the same nature if ever the existing problem will benefit

and use for further study.

Definition of Terms

This section aims to guide the readers of the study to better

understand the terms used in this study:

BOOKKEEPING NCIII

A TESDA course to enhance the knowledge, skills and training of

bookkeepers in posting transactions, preparing the financial reports, and

trial balance. A national certificate (NCIII) will be issued if the students

passed the assessment. This program is a qualification of where the

students are encouraged to explore more to their knowledge and skills.

The importance of National Certificate (NCIII) for the future accountant is

an added credentials and it will support your career path.

 BOOKKEEPING NCIII HOLDER- The students undergo the

assessment of bookkeeping and passed the examinations.

Basic Accounting

This is one of the subject of BSA students. This study is to give an

understanding of the basic accounting principles, transactions,

operations and theoretical accounting framework of financial statements

and generally accepted accounting principles.

MASTERY OF ACCOUNTING CYCLE TO THE ACCOUNTANCY

STUDENTS

Refers to the level of mastery of the students for taking

bookkeeping before entering Bachelor of Science in Accountancy which

will serve as basis of the level of their skills and knowledge. Accounting

cycle focusing on:

JOURNALIZING ENTRIES- is the first step in the accounting cycle

and a foundation for all the financial reports. Journal entry is to record a

transaction in the accounting books, properly documented of the correct

date, amounts to be debited and credited.

 POSTING TRANSACTIONS- Posting is the process of transferring

information from the journal to the ledger for the purpose of

summarizing.

TRIAL BALANCE- These prepared after posting all financial

transactions. A company prepares a trial balance periodically end of

every reporting period. The trial is a worksheet with a two columns one

for the debit and for the credit and considered to be balance.

FINANCIAL REPORTS- These reports summarize the important

information of financial accounting of the business. These are the

three main types of financial statements;

BALANCE SHEET- is a statement showing the assets,

liabilities, and capital of a business entity at a specific date.

Assets are equal to liabilities plus owners’ equity.

INCOME STATEMENT- primarily focuses on a company’s

revenues and expenses during a particular period and also

called a profit and loss statement.

STATEMENT OF CASH FLOW - The company's ability to

generate cash to pay debt obligations, finance operating

expenses, and fund investments is measured.