F UN D A M E N TA LS O F

O U N TA NC Y , B U S I N E S S &
ACC
M A NA G E M E N T I
ION AND INF ORMAT ION USERS
ACCOUNTING INTRODUCT
LESSON OBJECTIVES:
• DEFINE THE CONCEPT OF ACCOUNTING;
• IDENTIFY THE NATURE OF ACCOUNTING IN VIEW OF ITS DEFINITIONS;
• MAKE A TIMELINE OF THE HISTORY/ORIGIN AND DEVELOPMENTS OF ACCOUNTING; AND
• DISPLAY SELF-TRUST IN CARRYING OUT ALL ACTIVITIES .
ACTIVITY 1 (CONCEPT MAPPING)(5 MINUTES)
What thoughts come out of your mind when you hear the word ‘accounting.’ What terms you think it is
related to? On your answer sheet, copy the graphic organizer below. Then using your prior knowledge,
generate ideas about accounting and write them inside the empty shapes. Add and connect more
shapes if you have to.
PRETEST (5 MINUTES)
ACTIVITY 2 (LET’S PASTE IT!)

• ON THE BOARD, PASTE THE ACCOUNTING DEFINITION FRAGMENTS PLACED UNDER COLUMNS A AND B
BELOW. THEN READ EACH ONE CAREFULLY. USING A LINE, CONNECT ONE FRAGMENT IN COLUMN A TO
ANOTHER FRAGMENT IN COLUMN B TO FORM ONE CORRECT ACCOUNTING DEFINITION. DO IT FROM
NUMBER 1 THROUGH 5.
ACTIVITY 3 TRACE BACK TO HISTORY!
•When did accounting start? Who were the people who
contributed to its development? Order the following events in
accounting history and development by writing 1 for that which
happened first, 2 for that which happened next, and so on until 5.
Be sure to be on watch for clues along each item. Write your
answers on your answer sheet
WHAT IS ACCOUNTING?
• Is a system that allows businesses to trace its financial activities
and evaluate results. There are three major steps involved in
accounting: (1) identifying financial events, (2) recording
financial events, and (3) communicating the summarized results
of all financial events to different parties for decision-making. All
these steps are performed by the accountant
ACCOUNTING FOR AMERICAN
ACCOUNTING ASSOCIATION
(AAA)
•Accounting as the process of identifying, measuring,
and communicating economic information to permit
informed judgment and decisions by users of the
information.
ACCOUNTING STANDARDS COUNCIL (ASC)

•Considers accounting as a service activity which functions

by providing 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 as the art of recording, classifying, and

summarizing in a significant manner and in terms of money,
transactions and events which are in part or at least of
financial character, and interpreting the results thereof.
NATURE OF ACCOUNTING
1. ACCOUNTING IS A PROCESS.

•In accounting, a series of logical and organized steps are

involved such as identifying, recording, measuring, and
summarizing financial data. After, the summarized results
are communicated to different parties or “stakeholders”.
2. ACCOUNTING IS AN ART.

•It takes creativity, skill and expertise to perform

all the accounting steps and activities.
Accounting education prepares students for the
accounting career.
3. ACCOUNTING IS CONCERNED WITH FINANCIAL
INFORMATION AND TRANSACTIONS.

•Accounting is a system in business that is concerned

with “money matters.” Hence, it involves a step called
identifying, where events of the business are
identified as whether they are financial and material
in nature or not.
4. ACCOUNTING IS A MEANS, NOT THAN AN END

•You have read that accounting contributes to the success of

every business. Hence, accounting serves as a tool to
achieve business goals rather than being the goals
themselves.
5. ACCOUNTING IS AN INFORMATION SYSTEM.

• Accounting is a repository of a collection of information which are

financial in kind. These information are dealt with through a series of
steps. Period by period, this accounting information are summarized
for the preparation of accounting reports or financial statements.
HISTORY OF ACCOUNTING