FABM 11 1stQ

Fundamentals of
Accountancy, Business and

Management 1 (First Quarter)
Bureau of Curriculum Development

NOVEMBER 2017
SHARING OF EXPERIENCES
Describe your unforgettable experience

in an accounting subject?
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

OBJECTIVES OF THE SESSION
• Analyze the components of the Curriculum Guide

such as content, content standards, performance
standards, learning competencies and coding
• Determine appropriate pedagogy in translating

learning competencies
• Prepare proper assessment activities for

teaching/learning activities across competencies.
COURSE DESCRIPTION
Fundamentals of Accountancy, Business and

Management 1
This is an introductory course in accounting, business

and management data analysis that will develop
students’ appreciation of accounting as language of
business and an understanding of basic accounting
concepts and principles that will help them analyze
business transactions.

COVERAGE OF THE SESSION
• Introduction to Accounting
• Branches of Accounting
• Users of Accounting Information
• Forms of Business Organization
• Types of Business According to Activities
• Accounting Concepts and Principles
• Types of Major Accounts
• The Accounting Equation
• Financial Statements and Books of Accounts
• Business Transactions and Their Analysis As Applied to the
Accounting

Accounting

INTRODUCTION TO ACCOUNTING
• INTRODUCTION OF ACCOUNTING
• BOOKKEEPING DISTINGUISHED FROM ACCOUNTING
• HISTORY OF ACCOUNTING
• DEFINITION OF ACCOUNTING
• ACCOUNTING CYCLE

What knowledge is needed on the study of accounting?
Why is accounting needed in business?
What are bookkeepers?
How is bookkeeping distinguished from accounting?
How can bookkeepers be of help to business and government?

What are Professional Accountant?
Accountancy Government GACPA
Management Accounting Commerce and Industry ACPACI
Internal Audit Public Accountancy ACPAPP
Accounting Information
Education/ Academe ACPAE
Systems

HISTORY OF ACCOUNTING

DEFINITION OF ACCOUNTING
It 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
decisions.
—Accounting Standards Council (ASC)

DEFINITION OF ACCOUNTING
The process of identifying, measuring, and

communicating economic information to permit
informed judgements and decisions by users of the
information.
—American Accounting Association (AAA)
A service activity whose function is to provide

quantitative information, primarily financial in nature,
about economic entities that is intended to be useful in
making economic decisions.
-American Institute of Certified Public Accountants (AICPA)

ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES
POST-
CLOSING JOURNALIZIN
TRIAL G
BALANCE
CLOSING
POSTING
ENTRIES
FINANCIAL TRIAL
STATEMENT BALANCE
ADJUSTING
WORKSHEET
ENTRIES
Accounting

BRANCHES OF ACCOUNTING

Accounting

USERS OF ACCOUNTING INFORMATION

• Types of Major Account and Accounting Equation
Accounting

FORMS OF BUSINESS ORGANIZATION
Sole
Proprietorship A business owned by only one person
A business owned by two or more persons who

Partnership
contribute resources into the entity.
A business organization that has a separate legal

Corporation
personality from its owners
a business organization owned by a group of individuals

Cooperative and is operated for their mutual benefit.



• Types of Major Accounts and Accounting Equation
Accounting

TYPES OF BUSINESS ACTIVITIES
SERVICE The business derived its income from services rendered

CONCERN to clients
The business is engaged in buying goods or commodities
MERCHANDISI
or any form of finished products and sells them at a
NG CONCERN
profit.
MANUFACTURI The business is engaged in buying of raw materials and
NG CONCERN supplies to be processed or manufactured
The business is engaged planting of crops and sells its

AGRICULTURE
products either in raw or finished form at a profit
HYBRID Are those involved in more than one type of activity

COMPANIES which are manufacturing, merchandising and service.
Activity Time

WHAT TYPE OF BUSINESS IS THIS?












Accounting

ACCOUNTING CONCEPTS AND PRINCIPLES
is an international convention of good accounting

practices. It is based on the following core principles. In
certain instances particular types of accountants that
deviate from these principles can be held liable.


The Stable-Monetary Unit
The Entity Assumptions
requires that all of the transactions of the Assumption
business and the items reported on the business's Has two parts. (1) requires that transactions
financial statement are kept separate from the must be able to be expressed in form of a
finances of the business's owners. currency. (2) assumes that the value of the
currency in which transactions have been
originally reported remains constant over time.
ASSUMPTIONS
The Going Concern Principle The Time Period Concept

states that the financial statements of an entity
requires that financial reporting take place over
should be prepared as if the firm will continue its
specified periods of time known as fiscal periods.
operations for the foreseeable future.

The Cost Principle Recognition

requires that assets on the financial is the process of formally incorporating an
statements of an entity be recorded at item into the financial statements of an
historical cost. entity.
PRINCIPLES
The Matching Principle The Full Disclosure Principle
is a guiding principle, not a rule, that states that any information that is material,
suggests that expenses should be recognized but is not reported in the financial
in the same period as the revenues that they statements, must be disclosed in the notes to
helped earned are recognized. the financial statements.

The Materiality Principle

The Objectivity Principle recognizes that in some trivial items,
in accounting suggests that the information following GAAP would be exceedingly
that is reported in the financial statements expensive or difficult. In these cases, if the
should be supported by objective evidence. item that needs to be reported is non-material
then an accountant can depart from GAAP.
CONSTRAINTS
The Principle of Conservatism Consistency
requires that accountants be allowed to requires that once an accounting method is
recognize anticipated or potential losses, chosen by a firm, the same method should
but should not be allowed the same action be used from period to period.
to be taken when considering anticipated or
potential gains.

Accounting

TYPES OF MAJOR ACCOUNTS
resources controlled by the entity as a result of past transactions or events and from
ASSETS
which future economic benefits are expected to flow to the entity.
are present obligations of the entity arising from past transactions or events the
LIABILITIES settlement of which is expected to result in an outflow from the entity of resources
embodying economic benefits
EQUITY residual interest in the assets of the entity after deducting all its liabilities
increase in economic benefit during the accounting period in the form of inflow or
INCOME increase in asset or decrease in liability that results in increase in equity, other than
contribution from equity participants
decrease in economic benefit during the accounting period in the form of outflow or
EXPENSES decrease in asset or increase in liability that result in decrease in equity other than
distribution to equity participants
ASSETS LIABILITIES
Current Current
- expected to be realized - expected to be paid within
within 1 year 1 year
Non Current Non Current

ASSETS
CURRENT ASSETS NON CURRENT ASSETS

Cash Property and Equipment
Cash Equivalent Land
Petty Cash Fund Building
Notes Receivable Equipment
Accounts Receivable Furniture and Fixtures
Est. Uncollectible Accounts Accumulated Depreciation
Advances to Employees
Inventories
Prepaid Expenses

LIABILITIES EQUITY
CURRENT LIABILITIES Amora, Capital
Accounts Payable Amora, Drawings
Notes Payable Share Capital
Accrued Expenses Share Premium
Unearned Income Retained Earnings
Income and Expense Summary
NON CURRENT LIABILITIES
Notes Payable
Mortgage Payable

INCOME EXPENSES
Service Income Supplies Expense
Rent Income Rent Expense
Professional Income Repairs and Maintenance
Sales Salaries Expense
Miscellaneous Income Insurance Expense
Other Income Transportation
Salaries and Wages
Utilities Expense
Taxes and Licenses
Bad Debts
Depreciation
GROUP
ACTIVITY

ACCOUNTING EQUATION
ASSETS = LIABILITIES + EQUITY
resources controlled by present obligations of the residual interest in

the entity entity the assets of the
entity after
as a result of past arising from past deducting all its
transactions or events transactions or events liabilities
settlement of which is
and from which future
expected to result in an
economic benefits are
outflow from the entity of
expected to flow to
resources embodying
the entity.
economic benefits
OWN OWE LEFT

ACCOUNTING EQUATION
NET
INCOME EXPENSES INCOME/LO
--
= SS
increase in economic decrease in economic
benefit during the benefit during the
accounting period accounting period
EARN SPEND LEFT
INCOME increase decrease increase

EXPENSE
decrease increase decrease
S
ACCOUNTING EQUATION
INCOME -- EXPENSES
1,000 = 400 + 600

ACCOUNTING EQUATION ACTIVITY
CASE ASSETS LIABILITIES CAPITAL

1 350,000 195,000 ?
2 ? 250,000 350,000
3 680,000 ? 450,000
4 ? 650,000 320,000

ACCOUNTING EQUATION ACTIVITY
Case 1 Case 2 Case 3 Case 4

Assets 175,000 450,000 ? 380,000
Liabilitie ? 100,000 120,000 ?
s
Equity 75,000 ? 180,000 0

Accounting

BOOKS OF ACCOUNTS
• Journals (Book of Original Entry)

• General Journal
• Special Journals
• Ledger (Book of Final Entry)
• General Ledger
• Subsidiary Ledger

BOOKS OF ACCOUNTS
• General Journal
Year Particulars F Debit Credit
Month Day Debit Item
Debit Item
Credit Item
Credit Item
Explanation of the Nature
of Transactions

BOOKS OF ACCOUNTS
• General Ledger (Manual)

Year Particulars F Debit Year Particulars F Credit

BOOKS OF ACCOUNTS
• General Ledger (Computer Based)

Year Particulars F Debit Credit Balance
Month Da
y

BOOKS OF ACCOUNTS
• Subsidiary Ledger
Name of the Company:
Address:
Year Particulars F Debit Credit Balance
Month Da
y

FINANCIAL STATEMENTS
Statement of Financial
formal statement showing the three elements comprising financial
Position
(Balance Sheet) position, namely assets, liabilities and equity.
Statement of Financial
is formal statement showing the financial performance of an entity
Performance
(Income Statement)
for a given period of time
Statement of Changes in shows the movements in the elements or components of the

Equity shareholders equity
Statement of Cash Flows summarizes the operating, investing and financing activities
provides narrative description or disaggregation of items presented

Notes to Financial
in the financial statements and information about items do not
Statement
qualify for recognition.
FINANCIAL STATEMENTS
Statement of Statement of
Financial Cash Flows
Statement of Position Operating
Financial
Performance ASSETS Investing
Financing
LIABILITIES
INCOME
EQUITY Statement of
EXPENSES Changes in
Equity
Notes to Financial Statement

Accounting

“ANALYSIS
BUSINESS TRANSACTIONS AND THEIR
AS APPLIED TO THE ACCOUNTING
• RULES OF DEBITS AND CREDITS

• JOURNALIZING
”
• POSTING
• PREPARATION OF TRIAL BALANCE
WHAT ARE BUSINESS TRANSACTIONS?
Business Transactions are exchanges of

equal monetary values.

ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES
POST-
CLOSING JOURNALIZIN
TRIAL G
BALANCE
CLOSING
POSTING
ENTRIES
FINANCIAL TRIAL
STATEMENT BALANCE
ADJUSTING
WORKSHEET
ENTRIES
RULES OF DEBITS AND CREDITS
DEBIT CREDIT
LEFT RIGHT
VALUE RECEIVED VALUE PARTED WITH
ASSETS LIABILITIES EQUITY

= +
EXPENSES INCOME

ILLUSTRATION. BOUGHT A CAR FOR CASH, P1,200,000
Who bought the car?

The Business
IDENTIFIYING
What is the value received?

Car
ANALYZING
What is the value parted with?
Money/Cash
What is the peso equivalent?

P1,200,000
MEASURING
ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES
POST-
CLOSING JOURNALIZIN
TRIAL G
BALANCE
CLOSING
POSTING
ENTRIES
FINANCIAL TRIAL
STATEMENT BALANCE
ADJUSTING
WORKSHEET
ENTRIES
ILLUSTRATION. BOUGHT A CAR FOR CASH, P1,200,000
• General Journal
Year Particulars F Debit Credit
Vehicle 1,200,000
Cash 1,200,000
Purchase of Vehicle

THE CHART OF ACCOUNTS

JOURNALIZING. PREPARE JOURNAL ENTRIES FOR JANUARY 2017
TRANSACTIONS.
Jan 1 Cash received on services rendered, P100,000

Jan 3 Services rendered on account, P120,000
Jan 4 Collection from a customer for services rendered, P95,000
Jan 6 Advanced cash deposit for services to be rendered, P50,000
Jan 10 Purchase of Shop Supplies Inventory for cash, P15,000
Jan 15 Purchase of Shop Supplies Inventory on account, P11,000
Jan 16 Payment of account to supplier/creditor, P6,000
Jan 18 Payment of relatively small or petty expenses, P4,000
Jan 22 Recording deposits of cash collection to the bank, P90,000
Jan 23 Payment of Salaries and Wages, P45,000

ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES
POST-
CLOSING JOURNALIZIN
TRIAL G
BALANCE
CLOSING
POSTING
ENTRIES
FINANCIAL TRIAL
STATEMENT BALANCE
ADJUSTING
WORKSHEET
ENTRIES
POSTING Jan 1 Cash received on services rendered, P100,000
2017 Particulars F Debit Credit

Jan 1 Cash on Hand 100,000
Service Income 100,000
Service rendered
Cash on Hand
2017 Particulars F Debit 2017 Particulars F Credit
Jan 1 Service rendered 100,000
Service Income
Jan 1 Service rendered 100,000

TRANSACTION ENTRY
Jan 1 Cash received on services rendered, P100,000
Jan 4 Collection from a customer for services rendered, P95,000
Jan 6 Advanced cash deposit for services to be rendered, P50,000
Jan 22 Recording deposits of cash collection to the bank, P90,000
Accounts Receivable 95,000
Jan 6 Cash On Hand 50,000
Unearned Service Income 50,000
Jan 22 Cash In Bank 90,000
Cash on Hand 90,000

Accounts Receivable 95,000
Jan 6 Cash On Hand 50,000
Unearned Service Income 50,000
Jan 22 Cash In Bank 90,000
Cash on Hand 90,000

Jan 1 Services rendered 100,000 Jan 22 Deposit 90,000
4 Collection 95,000
6 Advance collection 50,000
245,000 90.000
155,000

ACCOUNTING CYCLE
REVERSING
ANALYZING
ENTRIES
POST-
CLOSING JOURNALIZIN
TRIAL G
BALANCE
CLOSING
POSTING
ENTRIES
FINANCIAL TRIAL
STATEMENT BALANCE
ADJUSTING
WORKSHEET
ENTRIES
TRIAL BALANCE
• The equality of Debits and Credits

• This report summarizes the debit and credit
entries of each account in the General Ledger

TRIAL BALANCE
Procedures in preparing the Trial Balance
1. See to it that the footing is properly done.
2. List down all accounts in the General Ledger with open
balances. Write the accounts’ amount balance depending on
what account balance they ,may have
3. Draw a single line across the two amount columns and foot
the debit and credit money columns
4. Draw a double line under the totals of both columns.

TRIAL BALANCE

FABM 11 1stQ

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Fundamentals of

Accountancy, Business and

Bureau of Curriculum Development

Describe your unforgettable experience

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

• Analyze the components of the Curriculum Guide

• Determine appropriate pedagogy in translating

• Prepare proper assessment activities for

Fundamentals of Accountancy, Business and

This is an introductory course in accounting, business

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

What knowledge is needed on the study of accounting?

Why is accounting needed in business?

What are bookkeepers?

How is bookkeeping distinguished from accounting?

How can bookkeepers be of help to business and government?

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

What are Professional Accountant?

Accountancy Government GACPA

Management Accounting Commerce and Industry ACPACI

Internal Audit Public Accountancy ACPAPP

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

It is a service activity. Its function is to provide quantitative

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

The process of identifying, measuring, and

A service activity whose function is to provide

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

A business owned by two or more persons who

A business organization that has a separate legal

a business organization owned by a group of individuals

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

SERVICE The business derived its income from services rendered

The business is engaged planting of crops and sells its

HYBRID Are those involved in more than one type of activity

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

is an international convention of good accounting

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

The Going Concern Principle The Time Period Concept