CRT LEARNING MODULE

Subject Code FABM1

Subject Title Fundamentals of Accountancy, Business &
Management 1
Duration 80 hours/semester
Module Title Introduction to Accounting

College for Research & Technology of Cabanatuan

Document No. 001-2020
Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
Business and Developed by: Issued by:
Management 1 Jocelyn F. Española, LPT Page 1
Module 1: Introduction CRT
to Accounting
HOW TO USE THIS LEARNING MODULE
Welcome to the module in Introduction to Accounting. This module covers the
introduction to accounting. It gives you an understanding about the definition,
nature and functions of accounting in business; differentiate bookkeeping from
accounting, and understand the history of accounting. Discuss the main areas of
accounting and what kind of services they render. Identify the internal and external
users of accounting.

You are required to go through a series of learning activities in order to

complete each learning outcome of the module. Each of the learning outcomes is
provided with Modules. Follow these activities on your own and answer the self-
check at the end of each learning outcome. If you have questions, don’t hesitate to
ask your facilitator for assistance.

This module was prepared to help you achieve the required competency in
Introduction to Accounting. This will be the source of Information for you to acquire
knowledge and skill in this particular trade independently and at your own pace, with
minimum supervision of help from your instructor.

 Talk to your online facilitator and agree on how you will both organize the
Training of this unit. Read each through the module carefully. It is divided into
sections, which cover all the skills and knowledge you need to successfully
complete this module.
 Work through all the information and complete the activities in each section.
Read Modules and complete self-check. Suggested references are included to
supplement the materials provided in this module.
 Most probably your facilitator will be your supervisor or manager. Your online
facilitator will support and correct you.
 Your online facilitator will tell you about the important things you need consider
when you are completing activities and it is important that you listen and take
notes.
 You will be given plenty of opportunity to ask questions and practice on the
job. Make sure you practice new skills during regular work shifts. This way you
will improve both your speed and memory and also your confidence.
 Talk to more experienced workmates and ask for their guidance.
 Kindly answer the self-check questions in this module or at the LMS (EDMODO)
to test your own progress.
Document No. 001-2020
Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
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Module 1: Introduction CRT
to Accounting
 Ask your online facilitator work through the activities: ask for written feedback
on your progress. Your online facilitator keeps feedback/pre-assessment reports
for this reason. When you have successfully completed each element, ask the
facilitator to mark on the reports that you are ready for assessment.
 When you have completed this module, and feel confident that you have
sufficient practice, your online facilitator will arrange an appointment with
registered assessor’s to assess you. The results of your assessment will be
recorded in your competency Achievement Record.

Document No. 001-2020

Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
Business and Developed by: Issued by:
Management 1 Jocelyn F. Española, LPT Page 3
Module 1: Introduction CRT
to Accounting
FUNDAMENTAL OF ACCOUNTANCY, BUSINESS AND
MANAGEMENT 1

Contents of this Learning Module

No. Module Title Topic Code

1 Introduction to Definition, Nature, Lesson 1
Accounting Function and
History of
Accounting Lesson 2
Branches of
Lesson 3
Accounting
Users of
Accounting

Document No. 001-2020

Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
Business and Developed by: Issued by:
Management 1 Jocelyn F. Española, LPT Page 4
Module 1: Introduction CRT
to Accounting
 MODULE CONTENT

MODULE TITLE : INTRODUCTION TO ACCOUNTING

MODULE DESCRIPTION:
This module covers the introduction to accounting. It gives you an
understanding about the definition, nature and functions of accounting in business;
differentiate bookkeeping from accounting, and understand the history of
accounting. Discuss the main areas of accounting and what kind of services they
render. Identify the internal and external users of accounting.

Number of Hours:
4 hours

LEARNING OUTCOMES:
At the end of this module you MUST be able to:
1. Demonstrate an understanding about the definition, nature, function and history
of accounting.

2. Differentiate the branches of accounting and explain the kinds/types of services

rendered in each of these branches.

3. Demonstrate an understanding of the external and internal users of financial

information.

Document No. 001-2020

Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
Business and Developed by: Issued by:
Management 1 Jocelyn F. Española, LPT Page 5
Module 1: Introduction CRT
to Accounting
LEARNING OUTCOMES:
1. Demonstrate an understanding about the definition, nature, function and
history of accounting.
2. Differentiate the branches of accounting and explain the kinds/types of
services rendered in each of these branches.
3. Demonstrate an understanding of the external and internal users of financial
information.

Learning Contents #1
1. Definition and functions of Accounting
2. Function of accounting in business
3. Difference of bookkeeping and accounting
4. History and development of accounting

Learning Content #2
1. Public Accounting
2. Private Accounting
3. Government Accounting
4. Accounting Education

Learning Content #3
1. Internal and external users of accounting information
2. Direct and Indirect users of accounting information

Assessment Criteria
1. Demonstrates new knowledge learned in accounting.
2. Accomplish the assignment, activity and quizzes.

Conditions
The students/trainees must be provided with the following:
1. Paper
2. Learning Materials
3. Pencil/ ball pen

Assessment Method:
1. Written Examination

Learning Activities (Study Guide)

Document No. 001-2020
Fundamental of Date Developed: August 08, 2020
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Module 1: Introduction CRT
to Accounting
 1. Using EDMODO app on your phone or the website on your laptop, go to
the FABM1 CLASS.
2. Click on the FOLDERS section (on menu bar)
3. Click the folder My Modules. The digitized Modules are in this folder.
4. All the Self-Checks are contained in the folder My Quizzes & My
Activity.
NOTE:

For those who are in Modular Learning or for those with limited
access to internet
You may send a picture of your answer to activities or projects via email or
Facebook messenger. Make sure to follow the guidelines for submitting your work.

1. When submitting your file, make sure to convert your file in PDF form. Only
those who submitted in PDF form will be checked.

2. All of our communication systems will be transferred via email or Facebook

messenger. Send your work only in my email. Take note of my gmail
[email protected].

3. When submitting your file use the following format:

File name sample:
Surname_subject code_activity number
Espanola_FABM1_Activity 1

For those who don’t have laptop or computer

4. You may submit a picture of your work instead a file. Follow the same format
when sending your work via Facebook messenger. My Facebook messenger
Jocelyn.espanola.39

5. For Deadline: You are given 6 days to finish your activity at exactly 5pm to
finish your weekly activity.
For example, if our class is scheduled every Monday, you must submit all of the
activities before 5pm of Saturday.

Learning Outcome #1 - 3
Document No. 001-2020
Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
Business and Developed by: Issued by:
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Module 1: Introduction CRT
to Accounting
 Learning Activities Special Instructions

1. Read Module No. 1 Lesson Contained in the Module 1: Introduction to

1 (Definition and Nature of Accounting EDMODO (Module 1 Lesson 1)
Accounting; Function of
accounting in business;
Difference of bookkeeping
and accounting; and history
of accounting)
2. Answer self-check for Module 1
The self-checks are available thru the folder My
Lesson 1 Quizzes & My Activity. The activity is timed (5
minutes). The results will be immediately be
available after clicking SUBMIT and the system
will run through the items incorrectly answered
(and show the correct answer)
3. Read Module No. 1 Lesson 2 Contained in the Module 1: Branches of
(Branches of Accounting) Accounting EDMODO (Module 1 Lesson 2)

4. Answer self-check for Module 1 The self-checks are available thru the folder My
Lesson 2 Quizzes & My Activity. The activity is timed
(15 minutes). The results will be immediately be
available after clicking SUBMIT and the system
will run through the items incorrectly answered
(and show the correct answer)
5. Read Module No. 1 Lesson 3 Contained in the Module 1: Users of Accounting
(Users of Accounting) EDMODO (Module 1 Lesson 3)

6. Answer self-check for Module 1 The self-checks are available thru the folder My
Lesson 3 Quizzes & My Activity. The activity is timed
(10 minutes). The results will be immediately be
available after clicking SUBMIT and the system
will run through the items incorrectly answered
(and show the correct answer)

Pre-assessment/Motivation
Document No. 001-2020
Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
Business and Developed by: Issued by:
Management 1 Jocelyn F. Española, LPT Page 8
Module 1: Introduction CRT
to Accounting
 Activity 1. Test Your Knowledge
The purpose of this is to test your present skills and background information about
this subject. The result of your test will help the teacher in making appropriate
modules and learning materials that will match to your skills.

Instruction: Circle the word or phrases that are related to the word “Accounting”.
You can have a multiple answers.

NUMBERS Quantitative Information Money

Transportation Planning Management

ORGANIZATION Classifying BOOKKEEPING

Record-keeping Business Transactions

Business Summarizing Analyzing

SERVICE ACTIVITY

Financial information

Module 1.1

Introduction to Accounting
Document No. 001-2020
Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
Business and Developed by: Issued by:
Management 1 Jocelyn F. Española, LPT Page 9
Module 1: Introduction CRT
to Accounting
Learning Objective: After completing this module, the learners are expected to:

 Define accounting (ABM_FABM11-IIIa-1)

 Describe the nature of accounting (ABM_FABM11-IIIa-2)
 Explain the functions of accounting in business (ABM_FABM11-IIIa-3)
 Narrate the history/origin of accounting (ABM_FABM11-IIIa-4)

Definition and Nature of Accounting

Definition
There are three widely accepted definitions of accounting.
1. According to the American Accounting Association (AAA), accounting is the
process of identifying, measuring, and communicating economic information
to permit informed judgment and decisions by users of the information.
2. Meanwhile, the American Institue 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 of at least of financial character, and interpreting the results thereof.
3. And lastly, the Accounting Standards Council (ASC) sees accounting as a
service activity. Its function is to provide quantitative information, primarily
financial in nature, about economics entities, that is intended to be useful in
making economic decisions. in making reasoned choices among alternative
courses of action.

Nature
From the three definitions above, we can see the unifying themes that describe the
nature of accounting.

Accounting is an art. The word “art” refers to the design of how something can be
performed. It is a behavioral knowledge involving creativity and skill. By the very
nature that accounting activity is systematic, it has definite techniques and its proper
application requires a particular skill and expertise.

Moreover, accounting deals with transactions that are financial in nature. The
definition of ASC requires that business transactions have to be measures in terms of
money. All of the transaction that are nonmonetary are not within the scope of
accounting.

Document No. 001-2020

Fundamental of Date Developed: August 08, 2020
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Module 1: Introduction CRT
to Accounting
It can also be deduced that accounting is a process. A “process” is a systematic
series of actions directed towards a particular outcome. As a process, accounting
performs specific actions such as identifying, measuring and communicating financial
information. It has to follow logial steps in the accounting cycle like recording,
classifying, and summarizing financial transaction, and communicating the results
after.

In effect, accounting is also an “information system.” An information system is a

set of interrelated components that work together to achieve a common purpose. It
also serves as a repository of collected financial data, proposed financial information,
and communicated financial statements.

Functions of Accounting in Business

Maintenance of systematic records
Financial results of an entity can be communicated
Meeting legal requirements
Protecting assets of a business
Assistance to management

Accounting is a measurement and communication process designed to provide useful

and timely financial information. Its functions are the following:
1. Recording – this is more popularly known as BOOKKEEPING, which involves
putting into records the business transactions and events. This can be done
manually, with the use of mechanical devices or electronically, or with the use
of computer.
2.Classifying – this involves the grouping of similar items together in order to
make the recording of the different transactions and events more systematic.
3. Summarizing – this involves the preparation of financial statements.
4. Interpreting – this involves the analysis of financial statements (by
developing financial ratios and explaining their significance) for the benefit of
the readers or users.

Difference of Bookkeeping and Accounting

More often, Bookkeeping and accounting are mistaken as one and the same. We
should clarify this early on. In terms of scope, accounting is broader as includes the

Document No. 001-2020

Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
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Module 1: Introduction CRT
to Accounting
bookkeeping function. Bookkeeping, on the other hand, is just confined with
recording of monetary transactions, which is one part of the accounting process.

History and Development of Accounting

Accounting is as old as civilization itself. It has evolved in response to various social
and economic needs of men. Accounting started as a simple recording of repetitive
exchanges. The history of accounting is often seen as indistinguishable from the
history of finance and business.

Following is the evolution of accounting:

 The Cradle of Civilization
Around 3600 B.C., record-keeping was already common from Mesopotamia, China
and India to Central and South America. The oldest evidence of this practice was
the “clay tablet” of Mesopotamia which dealt with commercial transactions at the
time such as listing of accounts receivable and accounts payable.

 14th Century - Double-Entry Bookkeeping

The most important event in accounting history is generally considered to be the
dissemination of double entry bookkeeping by Luca Pacioli (‘The Father of
Accounting’) in 14th century Italy. Pacioli was much revered in his day, and was a
friend and contemporary of Leonardo da Vinci. The Italians of the 14th to 16th
centuries are widely acknowledged as the fathers of modern accounting and were
the first to commonly use Arabic numerals, rather than Roman, for tracking business
accounts. Luca Pacioli wrote Summa de Arithmetica, the first book published that
contained a detailed chapter on double-entry bookkeeping.

 French Revolution (1700s)

The thorough study of accounting and development of accounting theory began
during this period. Social upheavals affecting government, finances, laws, customs
and business had greatly influenced the development of accounting.

 The Industrial Revolution (1760-1830)

Mass production and the great importance of fixed assets were given attention
during this period.

 19th Century - The Beginnings of Modern Accounting in Europe and

America

Document No. 001-2020

Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
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Module 1: Introduction CRT
to Accounting
The modern, formal accounting profession emerged in Scotland in 1854 when Queen
Victoria granted a Royal Charter to the Institute of Accountants in Glasgow, creating
the profession of the Chartered Accountant (CA).

In the late 1800s, chartered accountants from Scotland and Britain came to the U.S.
to audit British investments. Some of these accountants stayed in the U.S., setting
up accounting practices and becoming the origins of several U.S. accounting firms.
The first national U.S. accounting society was set up in 1887. The American
Association of Public Accountants was the forerunner to the current American
Institute of Certified Public Accountants (AICPA).

In this period rapid changes in accounting practice and reports were made.
Accounting standards to be observed by accounting professionals were promulgated.
Notable practices such as mergers, acquisitions and growth of multinational
corporations were developed. A merger is when one company takes over all the
operations of another business entity resulting in the dissolution of another business.

Businesses expanded by acquiring other companies. These types of transactions

have challenged accounting professionals to develop new standards that will address
accounting issues related to these business combinations.

 The Present - The Development of Modern Accounting Standards

and Commerce
The accounting profession in the 20th century developed around state requirements
for financial statement audits. Beyond the industry's self-regulation, the government
also sets accounting standards, through laws and agencies such as the Securities
and Exchange Commission (SEC). As economies worldwide continued to globalize,
accounting regulatory bodies required accounting practitioners to observe
International Accounting Standards. This is to assure transparency and reliability,
and to obtain greater confidence on accounting information used by global investors.
Nowadays, investors seek investment opportunities all over the world. To remain
competitive, businesses everywhere feel the need to operate globally. The trend
now for accounting professionals is to observe one single set of global accounting
standards in order to have greater transparency and comparability of financial data
across borders.

Activity #2
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Module 1: Introduction CRT
to Accounting
I want you class to do the following task alone. Make sure to answer them according
to what you understand in the lesson.

1. Is accounting important to you? Does it affect your daily activities?

How?

Answer:

2. What is the difference between Accounting and Bookkeeping?

Answer:

Quiz#1
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Module 1: Introduction CRT
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Directions: Read each statement below carefully. Write True if its correct or False
if its wrong.
_______1. Accounting is the process of identifying, measuring, and communicating
economic information.
_______2. Accounting is a service activity.
_______3. Accounting provides assistance to decision makers by providing them
financial reports.
_______4. Accounting is part of Bookkeeping.
_______5. Accounting help interested users come up with informed decisions.
_______6. Accounting is a service activity. Its function is to provide qualitative
information.
_______7. Information System is a systematic series of actions directed towards a
particular outcome.
_______8. Financial in Nature requires that business transactions have to be
measures in terms of money.
_______9. Luca Bartolomeo de Pacioli is the FATHER OF ACCOUNTING.
_______10. Accounting records dating back more than 7,000 years have been found
in Sumeria.

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Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
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Module 1: Introduction CRT
to Accounting
Good Job on finishing Module 1.1!
How do you feel about it? Check the box that describes what you feel about this
lesson.

It was OKAY. I It was HARD. I

might need to have several
It was EASY! review some questions.
parts.

A teacher also learns a lot from their students.

Let me hear your thoughts. You can write your comments, suggestions, questions,
or feedback in this paper.

KEEP IN TOUCH!
If you have Questions and Clarifications.You may reach me through my
Gmail: [email protected]
Facebook messenger: jocelyn.espanola.39
contact#: 0951 695 5806

Document No. 001-2020

Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
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Module 1: Introduction CRT
to Accounting
Referrence:
Rabo, Tugas, and Salendez. “Introduction to Accounting.” In Fundamentals of
Accountancy, Business and Management 1. Quezon City:Vibal Group, Inc.
2019.
Rabo, Tugas, and Salendez. “Branches of Accounting.” In Fundamentals of
Accountancy, Business and Management 1. Quezon City:Vibal Group, Inc.
2019.
Rabo, Tugas, and Salendez. “Users of Accounting.” In Fundamentals of
Accountancy, Business and Management 1. Quezon City:Vibal Group, Inc.
2019.

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806160

Document No. 001-2020

Fundamental of Date Developed: August 08, 2020
Accountancy, Date Revised:
Business and Developed by: Issued by:
Management 1 Jocelyn F. Española, LPT Page 17
Module 1: Introduction CRT
to Accounting