Gensantos Foundation College Inc.

Buaong Extention, General Santos City

The Foremost Outcome of Mastering the

Fundamentals of Accounting 1

Prepared by:
Cancer,Kimberly Cloi T.
Sing, Jeffrey G.

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Table of Contents

I.
II.
III.
IV.

Introduction

Photographic Evidence

Questions and Answers

Recommendation

12

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V.

References

13

Introduction
Whenever we hear the word accounting we often associate it
with figures and then relate it to business. We failed to realize that
accounting is not for business alone. Actually, nearly everyone
practices accounting in one form or another every day. Whenever we
go and everything we do which involves decision-making, accounting is
present. Whether we are at home, in school or anywhere else,
accounting has always been a part of our daily struggle for survival,
this makes accounting to have a universal existence.
Even in professions which we may think their fields of studies are
not related to business like engineering, architecture, law, medicine,
etc-they too need a working knowledge of accounting in pursuit to the
practice of their professions.
Accounting is often called the language of business; the
language we often hear in business conversation. But how can we
participate actively and communicate effectively in the business
community if we dont speak the same language. Its the way business
people sets goal, measure results and evaluate performance.
In todays business world, learning and understanding the art of
accounting is not just an uphill climb, but rather its a survival skill.

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Photographic Evidence

Learning and understanding the art of accounting is not just

an uphill climb but rather a survival skill

Basic accounting equation

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Bridging communication through Financial Statements

Questions and Answers

1. Why do need to study accounting?
Answer:
Simply put, Accounting is the language of business. It is the
means by which relevant and reliable financial information can
be communicated to the users who can analyze that information
to

make

business

decisions.

Think of all of the different groups of people that use

financial information. Current and potential investors analyze a
firm's financial statements to determine growth potential, how
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effectively a firm has been using its resources and how profitable
it is. Similarly, creditors use them to determine how liquid a firm
is (how likely it is that the firm can meet its short-term
obligations)

or

may

be

how

solvent

the

firm

is.

Managers use different financial information to make

decisions

about

various

costs

to

the

firm.

Furthermore,

accounting allows firms to analyze the tax impacts of their

various

business

decisions.

Even if you do not choose to accounting as a course of

study, you will very likely need to be able to use information
prepared by accountants if you find yourself in any position in
which you are required to make business decisions. That is not to
say that financial information is the only factor that should
influence your decisions; but it is a tool that it often works to
your advantage to use.
a. What knowledge is required in the study of accounting?
Answer:
Firstly, it is our analytical ability that counts most;
ability to analyze transactions and situational problem
requirements. As a beginner, the most difficult part is
the determination of the correct accounts and amounts
to be debited and credited- the theory of what you
received and what you gave away in return. Learning
ability can be developed sometimes as one gets mature.
However theres no room for waiting an accountancy
student to get mature before realizing the importance of
the subject. With what is happening in the academe
right now, where there are schools which are tightly
screened the students before admission to the said
course. And some schools require an 85% cut-off in all
accounting subjects.
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Secondly, it is our stacked knowledge in arithmetic

and not mathematics that are needed. Of you know the
process of addition, subtraction, multiplication, division
and the reasons why these are applied.
Thirdly, there is a psychological factor behind. Many
students shy away from accounting subject because of
the impression that accounting is very difficult subject.
Lastly, change a little study habit. Spend more time
in your studies now. What is five years of sacrifices, then
a life time harvest! Think of your future. Regrets will
come at last.
b. Where we start with our study in accounting?
Answer:
We should start our study in accounting from:
1st Portraying the role as accountant
business

in

2nd Study the Generally Accepted Accounting

Principles
3rd Study the Basic Accounting Assumptions
4th
Study
the
Financial
Statements

(Accountants report)
2. How do accounting differ from:
a. Bookkeeping
Answer:
Bookkeeping is a procedural and largely concerned
with development and maintenance of accounting
records. It is the how of accounting. While, accounting
is conceptual and is concerned with the why, reason or
justification

for

any

adopted.

Bookkeeping

is

procedural element of accounting as arithmetic is a

procedural element of mathematics.
b. Auditing
Answer:
In a broad sense, accounting embraces auditing.
Auditing is one of the areas of accounting specialization.
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In a limited sense, accounting is essentially constructive

in nature. Accounting ceases when financial statements
are already prepared. On the other hand, auditing is
analytical. The work of an auditor begins when the work
of the accountant ends. After the financial statements
are prepared, the auditor will begin to perform his task.
The auditor examines the financial statements to
ascertain

whether

they

are

conformity

with

the

generally accepted accounting principle.

3. Why did accounting define as a process of:
a. Identifying
Answer:
Accounting is a process of identifying because it is
the

recognition

and

nonrecognition

of

business

transactions as accountable events. An event is

accountable or quantifiable when it has an effect on
assets, liabilities and equity. In other words, the subject
matter of accounting is economic activity or the
measurement of economic resources and economic
obligations. Only economic activities are emphasized
and recognized in accounting.
b. Measuring and;
Answer:
This is an accounting process in assigning of Peso
amounts to the accountable economic transactions and
events. If the accounting information is to be useful, it
must be expressed in terms of a common financial
denominator. Financial statements without monetary
amounts

would

be

largely

unintelligible

or

incomprehensible. The Philippine Peso is the unit of

measuring accountable economic transactions. The

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measurement bases are historical cost, current cost,

realizable value and present value.
c. Communicating
Answer:
Communicating is a process

of

preparing

and

distributing accounting reports to potential users of

accounting information. Identifying and measuring are
pointless if the information contained in accounting
records cannot be communicated to the potential
users , like investors, owners, managers, creditor and
other interested parties. Actually, it is for this reason
that accounting has been called the universal language
of business
4. What are the career opportunities of an accountant?
Answer:
Once we become an accountant, there we find several
opportunities to grab with. We can be employed and worked in
various fields of endeavor such as being a Public Accountant in
a way that we are in a public practice. And as a public
practitioner, we are able to render services to the public for a
fee. We are not an employee of the client company under audit
but assume the role as independent entity vested with the
freedom to exercise our own judgment carrying out the
engagement requiring our independence and impartiality of the
report we prepared. We can be also become a Government
Accountant, under this field, we are able to render services to
the

government.

This

widens

the

job

opportunities

of

accountants. Once we choose this field, we will become a

member of the Government Association of CPAs GACPA) sector.
We can also be a Private Accountant in which we will gain
employment in private firms and hold positions as Chief
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Accountant,

Accounting

Manager,

Internal

Auditor,

Finance

Manager or the highest accounting officer of an enterprise which

known as the Comptroller.
Lastly, we can also become an Accounting Instructor in a way
that some CPAs join in the academe and sacrifice the high
income generating profession for the sake of love in accounting
education.
5. How accounting made a big leap towards globalization?
Answer:
Globalization has resulted in business enterprises entering
into transactions that extend beyond the borders of their home
country as evidence by multinational corporations which have
grown widely with their subsidiaries and affiliates located in other
parts of the world. It has also awakened the need for accounting
principles and standards to have international acceptability. As
the Accounting Law of 2004s declaration of policy provided that
the state recognizes the importance of accountants in nation
building and development. Hence, it shall develop and nurture
competent, virtuous, productive and well-rounded professional
accountant whose standards of practice and service shall be
excellent, qualitative, world class and globally competitive
through regulatory measures, programs and activities that fasten
their professional growth and development. As the saying goes,
think globally, act locally for a moment while waiting for this
phenomenon to make a full blast.

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Recommendation
Accounting is designed to be self-contained. As an accounting
students we want to expand our knowledge beyond that we can cover
in this subject matter or who want more in-depth explanations in
reading this book, Fundamentals of Accounting that geared towards
BSA and BSAT students.
If you want a spontaneous success in business, you should know
about the Fundamentals of Accounting. No matter how skilled you are
at creating a product, providing services, or even marketing your
wares, the money you earn will slip between your fingers if you dont
know how to efficiently collect it, keep track of it, save it and spend or
invest it wisely.
This Book report is recommended for those people who are
highly engaged in business and also for the students with little or no
prior background in basic accounting that want to improve their
accounting literacy. There are no academic prerequisites for this
subject matter. Although we will work with numbers, the only required
math knowledge is addition, subtraction, multiplication and division.

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References
Lopez, Rafael Jr. Fundamentals of Accounting, MS Lopez Printing
and Publishing, 1st October Street, Don Julian Village Ma-a, Davao
City, Philippines,2013
Valix, Conrado, Peralta, Jose and Valix, Christian Aris. Financial
Accounting Volume one, GIC Enterprise & Co., Inc., 2017 C.M.
Recto, Manila, Philippines
Carter, Willam. Cost Accounting (14th Edition), MG Reprographics,
Manila, Philippines

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