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Q3 Fundamentals of ABM 1 Module 1
Q3 Fundamentals of ABM 1 Module 1
Accountancy,
Business, and
Management 1
Quarter 3 – Module 1:
Introduction to Accounting
Fundamentals of Accountancy, Business and Management – Grade 11
2nd Semester, Quarter 3 – Week 1: Introduction to Accounting
First Edition, 2021
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Let Us Learn
Let Us Try
Direction: Read each statement carefully and fill in the blank(s) with the
correct answer. Answers may be more than one word.
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Let Us Study
2) Accounting is a process.
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A process refers to the procedure of doing some particular job step by
step in accordance with the aims or objectives. As it performs the basic task
of gathering, processing and transmitting financial information, accounting is
identified as a process. In doing so, certain basic steps are taken, such as
recording, classifying, summarizing and reporting financial data.
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1.4 INTERNAL USERS OF ACCOUNTING INFORMATION
Following are the 8 types of external users and their information needs:
Investors
Investors use accounting information to work out whether an
investment maybe a good fit for their portfolio and whether they should hold,
increase or decrease their investment.
Lenders
Lenders use accounting information of borrowers to assess their credit
worthiness, i.e. their ability to pay back any loan. Lenders offer loans and
other credit facilities on terms that supported the assessment of monetary
health of borrowers.
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On a lighter note, borrowers can only get a loan from lenders if they will
prove that they don’t need the money.
Suppliers
Just like lenders, suppliers need accounting information to assess the
credit-worthiness of its customers before offering goods and services on credit.
Some suppliers only have a couple of customers. These customers might be
very large businesses themselves. Suppliers need accounting information of
its key customers to assess whether their business is in healthiness which is
important for sustainable business growth.
Customers
Most consumers do not care about the financial information of its
suppliers. Industrial consumers however need accounting information about
its suppliers so as to assess whether or not they have the specified resources
that are necessary for a stable supply of products or services within the
future. Continuity in supply of quality inputs is important for any business.
Government
Government ensures that a company's disclosure of accounting
information is in accordance with the regulations that are in place to
safeguard the interest of varied stakeholders who depends on such
information in forming their decisions.
Auditors
External auditors examine the financial statements and the underlying
accounting record of companies to form an audit opinion. Investors and other
stakeholders rely on the independent opinion of external auditors on the
accuracy of financial statements.
Public
General public can also have an interest in accounting information of a
corporation. These could include journalists, analysts, academics, activists
and individuals with an interest in economic developments.
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Let Us Practice
Write (I) if you believe the statement is about Identifying, (R) if the
statement pertains to Recording, (C) if it has something to do with
Communicating and (N) if it has nothing to do with Identifying,
Recording nor Communicating.
Just like love and music, accounting too is considered the “language of
business” because anywhere on the globe, everybody knows how number
works. In accounting definition, three (3) important words matter although
in higher accounting (in your college years), the definition of accounting is
expanded. In the meantime, let us remember the acronym I-R-C which stands
for Identifying, Recording and Communicating.
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Let Us Assess
Activity 1:
Instruction: In a sheet of paper, answer the following questions. DO NOT
copy the definition from this module. Base your answer according to
your understanding of the concept.
1. Define accounting.
2. Define recording.
3. Define communicating.
DEFINITION RUBRIC
1 point 3 points 5 points
No Understanding Partial Understanding Full Understanding
Student appears to have no Student appears to have Student appears to have full
understanding of the partial understanding of understanding of the
concept or term. The the concept or term. The concept or term. The
student may have left the student has provided an student has provided an
question unanswered or example or a definition of example and a definition of
stated, “don’t know.” Or the the term. The example the term. The example and
student may have provided and/or definition may be definition correctly explain
an incorrect definition or incomplete. the meaning of the word.
example.
Activity 2:
Instruction: Match Column A with the correct answer on column B.
Write the letter of the correct answer on the space provided before the
number.
COLUMN A COLUMN B
____ 1 It collects, processes and communicates A. Arts and Discipline
financial information of any entity. B. Financial Information
____ 2 It follows certain standards and C. Information System
professional ethics. D. Process
____ 3 It does not deal with non-monetary or E. Service Activity
non-financial events or transactions. F. Journal
____ 4 It provides assistance to decision makers
by providing them financial reports.
____ 5 A method of performing any specific job
step by step according to the objectives or
targets.
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Activity 3:
Instruction: Each question in this section is a multiple-choice question with
four answer choices. Read each question carefully and choose the BEST
answer.
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Let Us Enhance
Analyze the case below and answer the questions thereafter.
Because it is the only bakeshop operating in town, the sale of bakery products
rises steeply. In order for him to keep track of sales and expenses, he applied
what he learned in Senior High School about the importance of record
keeping. He uses a journal and a ledger for record keeping purposes.
Questions:
1. Name the transactions or events which can be considered “IDENTIFYING”
based on the definition of Accounting?
Recognition Rubric
1 point 3 points 5 points
No recognition of Partial recognition of Full recognition of
transaction transaction transaction
Student appears to have no Student appears to have Student appears to have full
recognition of transactions partial recognition of recognition of the
or events. The student may transactions or events The transactions or events. The
have left the question student has provided an student has provided an
unanswered or stated, example or a transactions example and a transactions
“don’t know.” Or the or events. The example or events. The example
student may have provided and/or transaction may be correctly recognizes the
incomplete. transactions or events.
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an incorrect transaction or
example.
Let Us Reflect
Accounting is the practice of documenting, classifying, summarizing,
evaluating and interpreting accounting documents in order to assess the
company's net profit/loss and financial status. It is a structured body of
knowledge comprising some underlying concepts and guidelines that are
followed when accounting is maintained. Accounting, however, is not pure
science because it does not create a link between cause and effect.
Finally, accounting offers information such that users can make better
and informed decisions, such as administrators, shareholders, staff, creditors
and financial institutions.
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Activity 3: Activity 2:
1. D 1. C
2. A
3. C 2. A
4. D 3. B
5. A
4. E
5. D
Let Us Assess:
1. I
2. I
3. N
4. C
B 5. R
Let Us Practice More: Let Us Practice:
Answer Key
References
Articles of Accounting Tools for CPE courses and book. Retrieved from
https://www.accountingtools.com/articles/what-is-a-bank-
reconciliation-statement.html Retrieved on July 21, 2020.
Beticon et.al (2016). Fundamentals of Accountancy, Business and
Management 2 (Teachers Manual for SHS). Philippines: Vibal Group ,
Inc.
Iñigo,A., Vigonte, F. & Pakig, B. (2017). Fundamentals of Accountancy,
Business and Management 2 (1st Edition). Philippines: Jo- deh
Publishing
Lopez, R. (2017). Fundamentals of Accountancy, Business and Management
2 (1st Edition). Philippines: Lopez Publishing
Salazar, D. (2017). Fundamentals of Accountancy, Business and Management
2 (1st Edition). Philippines: Rex Bookstore, Inc.
Teaching Guide for Senior High School Fundamentals of Accountancy,
Business and Management 1
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