FRY’S READABILITY FORMULA

FORMULA, COMPUTATION, GRAPH AND INTERPRETATIONOF THE BOOK

ENTITLED FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND

MANAGEMENT 1 HIGH SCHOOL

CHAPTER 1
The Nature of Accounting and Its Business Environment

WHAT IS ACCOUNTING?
1st 100 words
Accounting is the systematic process of measuring and
reporting relevant financial information about the activities of an No. of sentences = 4.3
economic organization or unit. Its underlying purpose is to provide No. of Syllables = 200
financial information. It is capable of being expressed in monetary
terms.
The American Institute of Certified Public Accountants (AICPA)
defines 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 at least of a financial
character, and interpreting the result thereof.
The Philippine Institute of Certified Public Accountants (PICPA)
defines accounting as 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.

Nature of Accounting
2nd 100 words
The nature of accounting is in its definition as follows:
No. of sentences = 5.9
1. Accounting is a systematic process.
No. of Syllables = 192
Process is a series of actions that produce something or that
lead to a particular result. As such, the performance of the four
aspects of accounting, which are recording, classifying,
summarizing, and interpreting, leads to communicating to its users
the relevant financial information needed by the parties interested.
2. Accounting is an art.
Art is a skill acquired by experience, study, or observation. It is
also defined as an occupation requiring knowledge or skill. The four
aspects of accounting require both knowledge and skill through
experience, study, or observation as a means to produce the key 3rd 100 words
end product which are the financial reports.
No. of sentences = 7.9
3. Accounting is a service activity.
No. of Syllables = 171
Service is the occupation or function of serving. Activity is
something that is done as work or for a particular purpose.
Combining the meaning of the two words, accounting is a work or
occupation for serving a particular purpose. Hence, since its
purpose is to provide financial information, the data that it will
process in terms of the four aspects of accounting should be
expressed in monetary terms. In short, it is interested in activities
that can be measured and expressed in terms of the value of
money.
 Computation and Formula:
Sentences: 1st + 2nd + 3rd = sum | Sum/3 = quotient
Syllables: 1st + 2nd + 3rd = sum | Sum/3 = quotient

No. of Sentences = 4.3+5.9+7.9 = 18.1 | 18.1/3 = 6.0

No. of Syllables = 200+192+171 = 563 | 563/3 = 187.7

CHAPTER 6
Completing the Accounting Cycle

Closing Entries
Accumulation of information on the details of operations entails
maintaining, separate revenue and expense accounts. At the end of
the period, this information is reported in the income statement. The 1st 100 words
revenue and expense accounts are then closed to the owner’s No. of sentences = 7.5
equity. This process also shows the results of operation. The closing
entries update the owner’s capital account at the end of the period. No. of Syllables = 174
They also eliminate the balances of the nominal accounts to ready
them for the next accounting period.
To close a temporary account, an entry is made to make its
balance become zero. Closing transfers the balances of the
temporary accounts to the capital account. The Income Summary,
considered to be a summary account, is used to close the income
and expense accounts.
For illustration purposes, assume that the following are the ledger
balances of Anime Word Gallery after adjustment. Prepare the
closing entries. 2nd 100 words
No. of sentences = 6.8
No. of Syllables = 164
STEPS IN CLOSING THE ACCOUNTS
1. Close the income accounts
Since income accounts have normal credit balances, each
revenue account will have to be debited in the amount of its balance
to bring their balances to zero. The credit is made to the income
summary account.
2. Close the expense accounts
Expense accounts have normal debit balances, each of these
will have to be credited to close the account. Thus, a compound
entry is needed considering the number of expense accounts. The
total of all expense accounts is then debited to income summary.
The entry to close the expense accounts of Anime World Gallery: 3rd 100 words
3. Close the income summary to capital No. of sentences = 5
Notice that after posting the entries involving the income and No. of Syllables = 158
expense accounts, the balance of the income summary account is
exactly the net income or net loss for the period. A credit balance
indicates a net income and a debit balance indicates a net loss.
Regardless of whether the business yields a net income or a net
loss, the income summary account must be closed to the capital
account. For Anime World Gallery, the entry is:

Computation and Formula:

Sentences: 1st + 2nd + 3rd = sum | Sum/3 = quotient
Syllables: 1st + 2nd + 3rd = sum | Sum/3 = quotient

No. of Sentences = 7.5+6.8+5 = 19.3| 19.3/3 = 6.4

No. of Syllables = 174+164+158 = 496 | 496/3 = 165.3

CHAPTER 11
Subsidiary Ledgers and Special Journals

CONTROLLING ACCOUNTS AND SUBSIDIARY LEDGERS

In the general journal, all transactions involving amount of
money receivable from customers are posted under accounts
receivable while all transactions involving amount of money payable 1st 100 words
to creditors are posted under accounts payable. Naming all No. of sentences = 4.9
accounts receivable or accounts payable, however, is possible only
if the business has only few customers or creditors. If the business No. of Syllables = 195
has hundreds of customers or creditors, a subsidiary ledger is
necessary.
A list of all customer accounts arranged in a alphabetical order
in a separate ledger is called an accounts receivable ledger. A list of
all creditor accounts arranged in alphabetical order also on a
separate ledger is called accounts payable ledger. The accounts
receivable ledger and the accounts payable ledger are called
subsidiary ledgers. The accounts they support—the accounts
receivable and the accounts payable—are known as the controlling 2nd 100 words
accounts. The subsidiary ledgers of these two controlling accounts
show the details supporting their balances. No. of sentences = 6.8
No. of Syllables = 194

THE FOUR TYPES OF SPECIAL JOURNALS

Special journals are columnar books of original entry for
recording similar transactions. Their design and use depend on the
needs of a specific business entity. The merchandising business
commonly has four types of transactions with their corresponding
special journals:
Transaction Special Journal
Selling of merchandise on credit Sales journal
Buying of merchandise on credit Purchases journal
Cash Collections Cash receipts journal
Cash Payments Cash disbursements journal
3rd 100 words
The use of these journals saves time as transactions of the No. of sentences = 3.9
same nature are grouped together in one journal. The aggregate
total is then posted to the general ledger as compared to the general No. of Syllables = 165
where each item is separately posted. Aside from this, a particular
type of transaction can be handled by one person thereby resulting
in division of labor. Moreover, no specialized skill is required of the
person handling the task as the recording process under the special
journal’s columnar headings is simple. This is also beneficial to
management in analyzing the different classes of business
transactions as similar transactions are recorded in one journal.
Despite this, the use of the special journals does not totally eliminate
the use of the general journal as transactions that do not involve
sales on account, purchases on account, cash receipt, and cash
payment are recorded in the general journal. Examples of
transactions that are recorded in the general journal non-cash
investment or non-cash withdrawal of owner, notes issued or
received in a purchase or sales transaction, credit memo or debit
memo for account sales or purchases, and other assets sold or
bought on account. Computation and Formula:
Sentences: 1st + 2nd + 3rd = sum | Sum/3 = quotient
Syllables: 1st + 2nd + 3rd = sum | Sum/3 = quotient

No. of Sentences = 4.9+6.8+3.9 = 15.6| 15.6/3 = 5.2

No. of Syllables = 195+194+165 = 554 | 554/3 = 184.7
SUMMARY OF COMPUTATION FROM CHAPTER 1, 6, AND 11

CHAPTER 1
The Nature of Accounting and Its Business Environment

Computation and Formula:

Sentences: 1st + 2nd + 3rd = sum | Sum/3 = quotient
Syllables: 1st + 2nd + 3rd = sum | Sum/3 = quotient

No. of Sentences = 4.3+5.9+7.9 = 18.1 | 18.1/3 = 6.0

No. of Syllables = 200+192+171 = 563 | 563/3 = 187.7

CHAPTER 6
Completing the Accounting Cycle

Computation and Formula:

Sentences: 1st + 2nd + 3rd = sum | Sum/3 = quotient
Syllables: 1st + 2nd + 3rd = sum | Sum/3 = quotient

No. of Sentences = 7.5+6.8+5 = 19.3| 19.3/3 = 6.4

No. of Syllables = 174+164+158 = 496 | 496/3 = 165.3

Closing Entries

CHAPTER 11
Subsidiary Ledgers and Special Journals
CONTROLLING ACCOUNTS AND SUBSIDIARY LEDGERS

Computation and Formula:

Sentences: 1st + 2nd + 3rd = sum | Sum/3 = quotient
Syllables: 1st + 2nd + 3rd = sum | Sum/3 = quotient

No. of Sentences = 4.9+6.8+3.9 = 15.6| 15.6/3 = 5.2

No. of Syllables = 195+194+165 = 554 | 554/3 = 184.7
TOTAL COMPUTATIONS, FRY READABILITY GRAPH AND INTERPRETATION

Chapter No. No. of Sentences No. of Syllables

1 6.0 187.7
6 6.4 165.3
11 5.2 184.7
TOTAL AVERAGE 5.9 179.2

CONCLUSION:
The book Fundamentals of Accountancy, Business, and Management 1 for Senior High School is
not fit to the level of Senior High School students. Based on the findings, using the Fry readability
formula and as shown in the above graph, there is a large gap between its suppose to be Grade 11
and Grade 12 readers towards the result which pointed out that the book is actually on a Grade 16
level or 4th year level in college. Since the Department of Education has already adapted the K-12
program, the supposed to be 1st year college would be still be in there Grade 11 Senior High School
and would later on be Grade 12 Senior High School. Therefore the Grade 16 level would be the time
for the 4th Year college considering the K-12 program implementation.
Based on the data I have gathered, presented and interpreted from the book, I would recommend
this book to 4th year college level students for this is the right book they need for their studies. I do not
want to refer this book to Grade 11 nor Grade 12. The gap of the level between the 4th year college
level towards them is just big so better not use this book since it will give them a hard time reading and
understanding the book for it is not suitable for their level. It is better if the books given out to the
Senior High School students would not be the same as this book for it is just far away from their scope.