Program : BACHELOR OF SCIENCE IN

OFFICE MANAGEMENT

Course Code : OAcc 413

Course Title : Applied Office Accounting

Course Credit : 3 units Contact Hours : 3 hours/week

BULACAN POLYTECHNIC COLLEGE

Bulihan, City of Malolos

Date Developed:
Bachelor of Science in Bulacan June 2020
Office Management Polytechnic Page 1 of 8
Date Revised:
Applied Office College July 2020
Accounting Document No. Developed by:
(OAcc 413) Noemie Gleabo, CPA Revised #02
30-OACC 413
 MODULE MATERIALS

List of Modules

No. MODULE
MODULE TITLE
CODE

1. Introduction to Accounting Concepts OAcc-413-1

2 Accounting Principles and Concepts OAcc-413-2

3 The Accounting Cycle OAcc-413-3

4 The Adjusting Process OAcc-413-4

5 Worksheet Preparation OAcc-413-5

6 Merchandising/Retailing Operations OAcc-413-6

7 Cash OAcc-413-7

8 Receivables OAcc-413-8

9 Inventories OAcc-413-9

10 Property, Plant & Equipment OAcc413-10

11 Liabilities OAcc413-11

12 Partnership OAcc413-12

13 Corporations OAcc413-13

Date Developed:
Bachelor of Science in Bulacan June 2020
Office Management Polytechnic Page 2 of 8
Date Revised:
Applied Office College July 2020
Accounting Document No. Developed by:
(OAcc 413) Noemie Gleabo, CPA Revised #02
30-OACC 413
 ACCOUNTING
PRINCIPLES AND
CONCEPTS

Bachelor of Science in Date Developed:

Bulacan June 2020
Office Management Polytechnic Page 3 of 8
Date Revised:
Applied Office College July 2020
Accounting Document No. Developed by: Revised July
(OAcc 413) Noemie Gleabo, CPA 2020
 MODULE CONTENT

COURSE TITLE: Applied Office Accounting

MODULE TITLE: Accounting Principles and Concepts

NOMINAL DURATION: __3___ HRS ( NO. of Hours per topic)

SPECIFIC LEARNING OBJECTIVES:

At the end of this module you MUST be able to:
1. Study the different accounting principles and concepts to give students an
idea of how accounting processes work.
2. Identify the different accounting principles.

TOPIC:
1. Development of office accounting/auditing standards
2. The nature of accounting principles
3. Accounting principles/Auditing standards
4. Accounting principles
5. Financial reporting
6. Additional Generally Accepted Accounting Principles
7. Professional judgment

ASSESSMENT METHOD/S:
Lesson/Discussion

REFERENCE/S:
https://www.taxmann.com/blogpost/2000001622/accounting-principles-and-
concepts.aspx
https://www.accountingcoach.com/accounting-principles/explanation
https://www.accountingtools.com/articles/what-is-the-purpose-of-financial-
statements.html#:~:text=The%20general%20purpose%20of%20the,cash%20flo
ws%20of%20an%20organization.&text=The%20purpose%20of%20the%20balan
ce,listed%20on%20the%20balance%20sheet.

Bachelor of Science in Date Developed:

Bulacan June 2020
Office Management Polytechnic Page 4 of 8
Date Revised:
Applied Office College July 2020
Accounting Document No. Developed by: Revised July
(OAcc 413) Noemie Gleabo, CPA 2020
 Information Sheet OAcc-413-2
Accounting Principles and Concepts

Learning Objectives:
After reading this INFORMATION SHEET, YOU MUST be able to:
1. study the different accounting principles and concepts to give students
an idea of how accounting processes work.
2. identify the different accounting principles.

Accounting principles are uniform practices that entities follow to

record, prepare, and present financial statements. An entity must prepare its
financial statements as per acceptable accounting principles to present a true
and fair view of the state of affairs of the entity.

ACCOUNTING PRINCIPLES AND CONCEPTS

I. Development of Office Accounting/Auditing Standards

The users of accounting information are classified either as external

users or internal users and either as direct users or indirect users.
Accounting is divided into two broad branches: Financial accounting and
Managerial accounting. Financial accounting produces general purpose
financial statements mainly for external, while Managerial Accounting
provides special-purpose reports mainly for specific information needs of
the internal users. There are other branches of accounting such as Cost
Accounting, Tax Accounting, and Government Accounting. Auditing, a
related but separate discipline, deals with an independent examination of
an enterprise’s financial statements for the purpose of rendering an
opinion as to the fairness by which these financial statements are
presented.
The Board of Accountancy regulates the professional practice of
Accountancy in the Philippines. The Accounting Standards Council, which
was created in 1981, was the original accounting standard-setting body in
the Philippines. The Accounting Standards Council performed its function
of establishing generally accepted accounting principles from 1981 up to
the date it was succeeded by the Financial Reporting Standards Council
in 2006. The Financial Reporting Standards Council was established by
the Board of Accountancy under the Implementing Rules and Regulations
of the Philippine Accountancy Act of 2004. The FRSC carries on the
decision made by the ASC to converge Philippine Accounting Standards
with the International Financial Reporting Standards (IFRSs) issued by the
International Accounting Standards Board. The FRSC formed the
Philippine Interpretations Committee for the latter to issue
implementation guidance on the Philippine Financial Reporting
Standards.

Bachelor of Science in Date Developed:

Bulacan June 2020
Office Management Polytechnic Page 5 of 8
Date Revised:
Applied Office College July 2020
Accounting Document No. Developed by: Revised July
(OAcc 413) Noemie Gleabo, CPA 2020
II. The Nature of Accounting Principles

The financial information makes sense with the basic accounting

principles and concepts. The concepts are known as GAAP that stands for
Generally Accepted Accounting Principles. These concepts and principles
are used as a foundation of accounting. GAAP helps in understanding the
standard rules and concepts of the accounting world.
- Accounting principles are the rules and guidelines that companies must
follow when reporting financial data.

- Accounting principles determine which events should be recorded when

the events should be recorded and the peso amount at which they should
be measured
- Accounting principles may be defined as those rules of action or conduct
which are adopted by the accountants universally while recording
accounting transactions. They are a body of doctrines commonly
associated with the theory and procedures of accounting. They are serving
as an explanation of current practices and as a guide for the selection of
conventions and procedures where alternatives exist.

III. Accounting Principles

The following is the list of the main accounting principles and
guidelines together with a highly condensed explanation of each.

A. Business Entity
A business is considered a separate entity from the owner and
should be treated separately. Any personal transactions of its owner
should not be recorded in the business accounting book unless the
owner’s personal transactions involve adding and/or withdrawing
resources from the business.

B. Going-Concern
It assumes that an entity will continue to operate indefinitely. On
this basis, generally, assets are recorded based on their original cost
and not on market value. Assets are assumed to be held and used
for an indefinite period of time or during its estimated useful life.
And that assets are not intended to be sold immediately or
liquidated.

C. Monetary Unit
The business financial transactions recorded and reported should
be in a monetary unit, if not, a memorandum will be used.

D. Historical Cost
All business resources acquired should be valued and recorded
based on the actual cash equivalent or original ss of closure and
liquidation.

E. Accounting Period

Bachelor of Science in Date Developed:

Bulacan June 2020
Office Management Polytechnic Page 6 of 8
Date Revised:
Applied Office College July 2020
Accounting Document No. Developed by: Revised July
(OAcc 413) Noemie Gleabo, CPA 2020
 This principle entails a business to complete the whole accounting
process over a specific operating time period. The accounting period
may be monthly, quarterly, or annually. For the annual accounting
period, it may follow a Calendar or Fiscal year.
F. Matching Principle

Matching principle is the basis of the accrual principle. As per the

matching principle, it is said that if a company recognizes and
records revenues, it should also record all costs and expenses
related to it to show the true profit of the business.
G. Consistency

This principle ensures similar and consistent accounting procedures

are used by the comparison of the financial information between two
accounting periods.

H. Materiality

Business transactions that will affect the decision of a user are

considered important or material, thus, must be reported properly. This
principle states that errors or mistakes in accounting procedures, that
which involves immaterial or small amount, may not need attention or
correction.

I. Objectivity

This principle states that the recorded amount should have some form
of impartial supporting evidence or documentation. It also states that
recording should be performed with independence, that’s free from bias
and prejudice.
J. Conservatism

This principle states that given two options in the amount of business
transactions, the amount recorded should be the lower rather than the
higher value.
K. Accrual

This principle requires that revenue should be recorded in the period it

is earned, regardless of the time the cash is received. The same is true
for expenses. Expenses should be recognized and recorded at the time
it is incurred, regardless of the time that cash is paid. This is to show
the picture of the business's financial performance.
L. Full Disclosure

A company should disclose all financial information to help the readers

see the company transparently. Without the full- disclosure principle,
the investors may misread the financial statements because they may
not have all the information available with them to make a sound
judgment.

Bachelor of Science in Date Developed:

Bulacan June 2020
Office Management Polytechnic Page 7 of 8
Date Revised:
Applied Office College July 2020
Accounting Document No. Developed by: Revised July
(OAcc 413) Noemie Gleabo, CPA 2020
 I. Financial Reporting

Financial Reporting is the process of producing statements that disclose

an organization’s financial status to management, investors, and the
government.
Financial Reporting includes the following Financial Statements such as
Income Statement, Balance Sheet, Statement of Comprehensive Income,
Statement of Cash Flows, and Statement of Stockholder’s Equity.
What is the main objective of Financial Reporting?
--The objective of financial reporting is “to provide information about the
financial position, performance, and changes in the financial position of an
enterprise that is useful to a wide range of users in making economic decisions.
--The general purpose of Financial Statements is to provide information
about the results of operations, financial position and cash flows of an
organization. This information is used by the readers of Financial Statements to
make decisions regarding the allocation of resources.

II. Professional Judgment

What is professional judgment?

-- Professional judgment means the application of relevant training,
knowledge, and experience, within the context provided by auditing,
accounting, and ethical standards, in making informed decisions about the
courses of action that are appropriate in the circumstances of the audit
engagement.
--Applying knowledge, skills, and experience, in a way that is informed by
professional standards, laws, and ethical principles, to develop an opinion or
decision about what should be done to best serve clients.

Bachelor of Science in Date Developed:

Bulacan June 2020
Office Management Polytechnic Page 8 of 8
Date Revised:
Applied Office College July 2020
Accounting Document No. Developed by: Revised July
(OAcc 413) Noemie Gleabo, CPA 2020