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- Process of identifying, measuring, and communicating economic information. (American
Accounting Association/ AAA)
- The art of recording, classifying and summarizing in a significant. (American Institute of Certified
Public Accountant (AICPA)
- It is a service activity. (Accounting Standard Council ASC)
- It is the process of identifying, recording, and communicating economic events of an organization
to interested users. (Wegandt, J. et al)
Recording – this involves keeping a chronological diary of events that is measured in pesos. The diary
referred to in the definition are the journals and ledgers.
Identifying – involves selecting economic events that are relevant to business transaction.
Communicating – occurs through the preparation & distribution of financial and other accounting reports.

Nature of Accounting:
1. It is an art.
2. It deals with the transaction that are financial in nature.
3. Accounting is a process.
4. Accounting is an information system.
5. It is a means not an end.
6. Accounting is a service activity.
Functions of Accounting in Business:
1. Keeping systematic records of business transactions.
2. Protecting properties of the business.
3. Communicating results to various parties in or connected in the business.
4. Meeting legal requirements.

Book keeping – concerned with identifying financial events and transactions.

Accounting – in terms of scope, is broader as it includes the book keeping function. It is responsible for
interpreting, classifying, analyzing, reporting and summarizing financial data.

History and Origin of Accounting

- Frater Luca Bartolomes Pacioli – Italian monk and mathematician
- He wrote Summa de Arithmetica, Geometria, Proportioni et Proportionalita (Everything about
Arithmetic, Geometry and Proportion) which was published in Venice in November 1494.
- This book is all about record keeping and double entry accounting.
- Pacioli was born in Borgo San Sepolcro. He lived in Venice and become a tutor of the three sons
of a rich merchant, Antonio de Rompiasi.
- Pacioli popularized the system of recording business transactions using memorandum books,
journal books and ledger books.
- Italy is the birthplace of Accounting.
- AICPA – largest body of accounting particularly in America.
Economic Event/ Business Transaction
 Business Transaction take place once a business venture starts operation.
 Business Transaction have to be identified, measured and documented through an accounting
 Business Transaction are the interactions between business and other stakeholders.
Stakeholders includes:
- Stockholders - Customers
- Management - Creditors
- Suppliers - Regulatory Agencies
- Employees - Community where it operates
Branches of Accounting

 Financial Accounting
- It is the broadest branch and is focused on the needs of external users
- Is primarily concerned with the recognition, measurement and communication of economic
- Is primarily handling the recording of the financial transaction of business
- The final transaction is later summarized into standardized accounting
- Conforms with accounting standards developed by standard setting bodies
- Philippine Financial Reporting Standard (PFRS)
- Philippine Accounting Standard (PAS)
Financial Statements
1. Statement of financial position – aka the Balance Sheet, presents the company’s “position” to the
resources it owns (Assets), obligation claimed against it (Liabilities) and the owners residual
interest (Equity).
 Assets – something a business own or control
 Liabilities – something a business owes to someone
 Equity – what the business owes to owner
2. Statement of Comprehensive Income – aka the Income Statement/ Profit and Loss Statement
reports the company’s financial performance in terms of net profit or loss over a specified period.
 Revenue - Earnings from the main line operations of the business
 Income - what the business has earned over a period
 Expense - the cost incurred by the business over a period
3. Cash Flow Statement – presents the movement in cash and bank balances over a period.
Movement in cashflow is classified into following statements:
 Operating Activities – represents the cash flow from primary activities of buss.
 Investing Activities – from the purchase and sale of assets
 Financing Activities – generated or spent on raising & repaying share capital
Dividends – distribution of income
4. Statement of changes in equity – shows a reconciliation of the beginning and ending balances of
the equity accounts
5. Notes to Financial Statements – comprising of summary of significant accounting policies and
other explanatory information.

Purpose of financial accounting

 General Purpose – external parties/user of financial statements use this report to evaluate the
performance of the company.
 Specific Purpose – internal parties/user of financial statements use this report to guide them in the
decision-making process for the company.

 Management Accounting
- A branch of accounting which focuses on the preparation of financial reports used by managers in
their day-to-day decision-making.
- Reports generated using management accounting are for internal users only

Roles of Management Accountants

 Advise managers about the financial implications of projects
 Explain the financial consequences of business decision
 Formulate business strategy
 Monitor spending the financial control
 Conduct internal business audits
 Explain the impact of the competitive landscape
 Bring a high level of professionalism and integrity to the business
Strategic Business and Management Skills
 Analysis – ability to analyze information and use it to make business decisions
 Strategy – ability to formulate business strategies that will increase the company’s wealth and
create value for the company’s shareholders
 Risk – ability to identify the risks that can potentially have detrimental effects to the company
 Planning – ability to apply accounting techniques in the planning and budget creation phase of a
 Communication – ability to identify what information the management needs and explain the
numbers to non-financial managers.

 Government Accounting
- According to Section 109 of Presidential Decree 1445, government accounting is defined as an
accounting system which encompasses the process of analyzing, recording, classifying,
summarizing and communicating all transactions involving the receipt and disposition of
government fund and property and interpreting the results there of.
Section 110: Objectives of Government Accounting
 To provide information concerning past operations and present conditions
 To provide a basis for guidance for future operations
 To provide for control of the acts of public bodies and offices in the receipts, disposition and
utilization of funds and property
 To report on the financial position and the results of operations of government agencies for the
information and guidance of all persons concerned.

 Auditing
- It is an unbiased examination and evaluation of the financial statements of an organization.
- It is a process that includes numerous steps to determine whether a company’s financial
statements are presented truthfully.
- Auditors – are accountants who perform the auditing procedure. They should be independent from
the company being examined.
- Audited Financial Statement – these are financial statement underwent the process of auditing.

 Tax Accounting
- Taxes are the lifeblood of the government.
- Tax Accounting enables the taxing authorities to collect taxes from the business organizations.

 Cost Accounting
- A branch of accounting that provides information for management accounting and financial
- Cost accounting is very useful in manufacturing businesses since they have the most complicated
costing process.
- Cost Accountants also analyze actual and standard costs to help managers determine future
courses of action regarding the company’s operations.
- Cost Accounting will also help the owner set the selling price of his products.

Terms used in Cost Accounting

 Direct Cost – costs that can economically be traced to a cost object (e.g. materials, labor, etc.)
 Indirect cost – costs that cannot be traced to a cost (e.g. costs of supplies used in the factory)
 Fixed Cost – costs that do not change within a relevant change of activity (e.g. insurance costs)
 Variable Cost – costs that change as the level of activity or production increases (e.g. labor
 Accounting Education
- A branch of accounting that aims to educate the students in the field of accountancy.
- The bachelor of Science in Accountancy (BSA) in the Philippines is normally a 5-year program
composed of subjects in accounting, audit, administration and business laws and taxation. It also
covers other fields such as banking and finance, government, non-profit organizations and

 Accounting Research
- Is research on the effects of economic events on the process of accounting and the effects of
reported information on economic events. It encompasses a broad range of research areas
including financial accounting, auditing and taxation.
- A branch of accounting that deals with the creation of new knowledge.



 Owners/ Stockholders – to analyze the viability and profitability of their investment

 Management/ Board of Directors – to analyze the organization’s performance & position
 Employees – to asses the company’s profitability and its consequences on their future
remuneration and job security
 Investors – to analyze the feasibility of investing in the company
 Customers – to asses the financial position of its suppliers
 Creditors – to determine the credit worthiness of the organization
Three main factors considered by creditore before lending a company:
1. Riskiness of lending
2. Profitability of the company
3. Company’s amount of borrowings
 Tax and Regulatory Authorities – to determine the credibility of the tax returns filed on
behalf of the company and to ensure that the company’s disclosure of accounting
information is in accordance with the rules and regulations set in order
 Academe – to utilize the financial statements for academic purposes
 Public – companies undoubtedly affect the whole economy.

Ayon kina Anderson et al. (1985), sa aklat na On becoming a Nation of Records, ang
pagbasa ay isang proseso ng pagbuo ng kahulugan mula sa mga nakasulat ng teksto. Ito ay isang
kompleks na kasanyan na nangangailangan ng koordinasyon ng iba’t iba at magkakaugnay na
pinagmumulan ng impormasyon.
Tiniyak naman nina Wixson et al sa artikulong New Directions in Statewide Reading
Assessment ang pagbasa ay bilang isang proseso ng pabuo ng kahulugan sa pamamagitan ng
interaksyon ng: Imbak o umiiral nang kaalaman ng mambabasa, impormasyong ibinibigay ng
tekstong binabasa at konteksto ng kalagayan o sitwasyon sa pagbasa.
Kategorya ng Mapanuring Pagbasa
1. Intensibo – pagbasang may kinalaman sa masinsinan at malalim na pagbasa ng isang tiyak na
2. Ekstensibo – pagbasang may kinalaman sa pagbasa ng masaklaw at maramihang materyales.
Sa pag aaral ng “Top Ten Principles for Teaching Extensive Reading” nina Richard Day at Julian
Bamford (2002) tinukoy nila ang sampung katangian ng matagumpay na programa sa ekstensibong pagbasa.
Uri ng Pagbasa
1. Scanning – ang pokus ay hanapin ang ispesipikong impormasyon na itinakda bago bumasa.
Kinapapalooban din ito ng bilis at talas ng mata sa paghahanap.
2. Skimming – ang layunin ay alamin ang kahulugan ng kabuuang teksto.
Antas ng Pagbasa
1. Primarya – pinakamababang antas ng pagbasa at pantulong pang makamit ang literasi sa
2. Mapagsiyasat – nauunawaan na rito ng mambabasa ang kabuuang teksto at nakapagbibigay ng
mga hinula o impresyon tungkol ditto.
3. Analitikal – ginagamit ditto ang mapanuri o kritikal na pagiisip.
4. Sintopikal – tumutukoy ito sa uri ng pagsusuri na kinapapalooban ng paghahambing sa iba’t-ibang
teksto at akda na kadalasang magkakaugnay.

Tekstong Impormatibo – ito ay isang anyo ng pagpapahayag na kapupulutan ng kaalaman. Layunin

nitong magbigay ng impormasyon, magpaliwanag, magbigay-kahulugan o magturo.
Tekstong Deskriptibo – ito ay may layuning maglarawan ng isang bagay, tao, lugar, karanasan,
sitwasyon at iba pa. ang sulating ito ay nagpapaunlad sa kakayahan ng magaaral na bumuo at
maglarawan ng isang particular na karanasan. Kinapapalooban ito ng paglikha at paglalarawan sa tauhan
at lunan o setting ng isang akdang pampanitikan.
Dalawang paraan ng Paglalarawan
1. Karaniwang Paglalarawan – tahasang paglalarawan sa paksa sa pamamagitan ng pagbanggit
sa mga katangian nito gamit ang mga pang-uri o pang-abay.
2. Masining na paglalarawan -masining na paggamit ng wika sat long ng mga tayutay upang
ihambing ang paksa sa isang bagay na mas malapit sa karanasan o ala ala ng mambabasa.
Tekstong Naratibo o Nagsasalaysay – tekstong ang layunin ay magsalaysay o magkuwento batay sa
isang tiyak na pangyayari totoo man o hindi.
Elemento ng Tekstong Naratibo
1. Paksa – dapat na ito’y mahalaga at makabuluhan. Kahit na nakabatay sa personal na
karanasan ang kuwentong nais isalaysay, mahalagang ipaunawa sa mga mambabasa.
2. Estruktura – kailangang malinaw at lohikal ang kabuuanag estrukturang kwento.
Four Language Skills
- Reading
- Listening
- Speaking
- Writing
Reading – it is a cognitive process of decoding symbols to derive meaning from text. It is a process of
looking at a series of written symbols and getting meaning from them.
Writing – one of the best method to communicate. One of the oldest known forms of communication.
Literacy – person’s ability to read and write.
Techniques in Selecting and Organizing
 Brainstorming – most popular tool in generating creative and rich ideas. It helps people establish
patterns of ideas, develop new ways of thinking active background knowledge and overcome
mental block.
2 types of Brainstorming
1. Group Brainstorming
2. Individual Brainstorming
Methods of Brainstorming
1. Idea List – involves listing ideas about a particular topic.
2. Idea Map – visual representation of ideas & their connections with one another.
 Graphic Organizers – visual presentations of concepts that help us structure information into
organizational patterns. They present essential information and connect these pieces of
information in a coherent network.
1. Venn Diagram – used to compare and contrast ideas and events.
2. Network Tree – used to present hierarchy, classification.
3. Spider Map – used to enumerate various aspects of a central ideas.
4. Problem-Solution Map – displays the nature of the problem & how it can be solved.
5. Timeline – used to show how events occurred chronologically through a long bar
Types of Timeline:
 Linear – show how events happened with one period.
 Comparative – shows two sets of events that happened within the same time
6. Plot Diagram - tool used to map events in a story/ used to analyze major parts of a plot
7. Series of events chain – used to show logical sequence of events
8. Fishbone Map – used to better understand the casual relationship of a complex
9. Cycle – describes how series of events interact to produce a set of results repeatedly
10. Persuasion Map – used to map out arguments and evidences to prove a viewpoint
Outline – a tool for organizing ideas
Principles in Making an Effective Outline
- Coordination – requires the same relevance to be labelled in the same way
- Subordination – shows that minor details have to be placed under their respective major details
- Division – requires that no cluster should contain only one item
- Parallel Construction – requires all entries in each cluster
Kinds of Outline = Topic Outline and Sentence Outline
 Topic Outline – uses words and phrases as its entries.
 Sentence Outline – uses complete sentence as its entries.

- Logical arrangement of data
- It helps the writer achieve his or her purpose
- The pattern helps you follow ideas easily and understand the text
- It helps you distinguish major details from minor ones
 Definition
- What does it mean?
- This pattern explains the information through the use of: illustration, examples and descriptions
- TERM – most important part of this pattern
Methods of Definition

 By characteristics or features
 By function
 By what it is not
 By what is it similar to
 By example
 By its Origins
 By its effect
Signal Words for Definition
- Is defined as
- As defined
- Means
- Refers to
- To define
- To illustrate

 Exemplification
- Provides a series of example/used to provide example of something
- MAIN IDEA & SPECIFIC EXAMPLE – most important part of this pattern
Signal Words for Exemplification
- After all - Namely
- As an example - Put another way
- Consider the following - Specifically
- For example - Stated differently
- For instance - That is
- In other words - To be specific
- In particular - To clarify
- In short - To illustrate

 Description
- Provides details on the idea by using either sensory or spatial pattern
- Sensory Pattern – ideas are arranged base on one or all of the five senses.
- Spatial Pattern – arranges ideas by location or physical space.
Two types of Description
1. Subjective – describing an impression of what is observed
2. Objective – present an actual picture of an object or sense
Signal Words for Description
- Above
- Across
- Beside
- Between
- Beyond
- By
- Down

 Narration
- A narrative is a story
- A narration sequences events in the order which they occurred in time
Signal Words for Narration
- About
- After
- Before
- During
- Later
- Second
- Until
- Tomorrow

 Comparison and Contrast

- Tells how something is like other things or how something is different from other things
- Two ways on how ideas are arranged: SEPERATELY AND SIDE BY SIDE
DIFFERENCES are the most important part of this pattern.

 Classification
- Organizes ideas into categories or divisions based on criteria or standards

 Causes and Effects

- Pattern that analyzes either causes that lead to effects and lead to causes
- Simple Cause, Multiple Effects
- Single Effect, Multiple Causes
- Multiple Causes, Multiple Effects
- Alternating Causes and Effects

 Problem-Solution
- Organizes problems into problems and proposed solutions
Signal words for Problem-Solution
- But
- Nonetheless
- One way is
- One solution is
- The problem