FABM1

MERDEKA L. ESMALDE
 OBJECTIVES

At the end of the lesson, learners

are expected to:
• define accounting;
• describe the nature of
accounting; and
• narrate the history/origin of
accounting.
• “Accounting is the process of
IDENTIFYING, RECORDING and
COMMUNICATING economic
events of an organization to
interested users.”
Identifying – this involves selecting
economic events that are relevant to
a particular business transaction.
The economic events of an
organization are referred to as
transactions – In a bakery business:
1. Sales of bread and other bakery
products;
2. Purchases of flour that will be
used for baking;
3. Purchase of trucks needed to
deliver the products.
Recording – this involves
keeping a chronological diary
of events that are measured in
pesos. The diary referred to in
the definition are the journal
and ledgers will be discussed
in future learning materials.
COMMUNICATING – occurs
through the preparation and
distribution of financial and
other accounting reports.
Like:
• prepare accounting
reports
• analyze and interpret for
 NATURE OF ACCOUNTING
A Discipline. Accounting is a
discipline that observes
professional standards and
professional ethics as other
fields of professions like
medicine, law, engineering,
and others.
 NATURE OF ACCOUNTING
A Service activity.

Accounting profession is not

involved in the selling of
goods. Instead, it is involved in
providing professional services
 NATURE OF ACCOUNTING
An art and Science.
As an art, accounting is designed to
perform its service activity with
utmost efficiency and in best
possible manner
It is also a science as well because it is
regulated by accounting rules,
principles, postulates and theories.
 NATURE OF ACCOUNTING

The Language of Business.

Accounting serves as a means

of communication.
 NATURE OF ACCOUNTING

The Eyes of the Business.

Bookkeeping records
Accountants
 • ANSWER ME, PLEASE

Question 1

It is involved in providing professional services particularly

in performing tasks by making financial reports regarding
the financial activities of economic entities.
What nature of accounting is it?
A. An Art and a Science B. A Discipline
C. A Language of Business D. A Service Activity
• ANSWER ME, PLEASE
• ANSWER ME, PLEASE
 • ANSWER ME, PLEASE

Question 4
What function of accounting is considered to be the basic
function of accounting?
A. Identifying, Recording, and Communicating
B. Recording, Measuring, and Communicating
C. Measuring, Identifying and Communicating
D. Communicating, Identifying and Measuring
 • ANSWER ME, PLEASE

Question 5

The following statements describe the nature of accounting, except

A. Accounting is a service activity.
B. Accounting is a process, an art, and a discipline.
C. Accounting is a language and the eyes of business.
D. Accounting is a perfect science of business.