Module-2
Module-2
Module #2
Productivity Tip:
Stay organized and be thorough.
Have a designated study space that is free of distractions so you can focus on your work.
Prepare as if you have to teach the information you are studying. Organize information by
creating charts, outlines, study guides, flashcards, concept maps and chapter maps.
Use smart test-taking strategies. Before a quiz or exam, write down formulas or other
information you may need.
A. LESSON PREVIEW/REVIEW
1) Introduction (2 mins)
Relevance is the ability of the given information to provide a meaningful and useful result. Relevant
information must be useful, understandable, timely, and needed for decision making.
Objectivity is the extent that the resulting information is not influenced by the personal bias or
judgments of those who provides it. Objective information must be based on solid evidence and facts.
1
FLM 1.0
Course Code: ACC 102
Module #2
Feasibility is the ability that the principle can be implemented without undue complexity to cost.
Feasible principle is practical.
2
FLM 1.0
Course Code: ACC 102
Module #2
Try answering the questions below by writing your ideas under the What I Know column. You may use
key words or phrases that you think are related to the questions. Answer the What I learned section
after reading the Concept notes
B. MAIN LESSON
1) Activity 2: Pre-Printed Content Notes (13 mins)
Several fundamental concepts underlie the accounting process. In recording business transactions, accountant
must consider the following:
3
FLM 1.0
Course Code: ACC 102
Module #2
2. Periodicity concept – divides the life of an entity into equal time periods, like month, quarter or
years; allows users to obtain timely data for a specific period to serve as a basis of decision
making
3. Stable monetary unit concept – treats peso amounts as though each peso has the same
purchasing power as any other peso at any time; effects of inflation are ignored
4. Going concern – financial statements are prepared on the assumption that the business will
continue to operate in the foreseeable future. It is assumed further that the enterprise has
neither the intention nor the need to liquidate its operations.
4
FLM 1.0
Course Code: ACC 102
Module #2
2. Faithful Representation - There is agreement between the description and the economic event
it purports to represent. To be a perfectly faithful representation, a depiction should have the
following characteristics:
Completeness – all and only events that occurred in a specific period are
presented
Neutrality - free from bias
Freedom from error – the system that processed the information were tried and
tested
5
FLM 1.0
Course Code: ACC 102
Module #2
As you are aiming to become a Certified Public Accountant in the future, it is a must for you to know the
following fundamental principles that a professional accountant must observe.
Accounting Standards are authoritative statements of how particular types of transaction and other events
should be reflected in financial statements
The main objective of the International Accounting Standards Board (IASB) is to develop a uniform set of
high quality, understandable and enforceable global accounting standards
Financial Reporting Standards Council (FRSC) was created to assist the Board of Accountancy (BOA) to
carry out its powers and functions provided under Republic Act No. 9298 or the Philippine Accountancy Act of
2004.
6
FLM 1.0
Course Code: ACC 102
Module #2
2) Activity 3: Skill-building Activities (with answer key) (18 mins + 2 mins checking)
_____ 1. The main objective of faithful presentation is to achieve public trust and confidence in
the financial statements.
_____ 2. Accounting information has confirmatory value if it has the ability to forecast the
outcome of future events.
3. The two qualitative characteristics of accounting information are relevance and
completeness.
_____4. Financial information must be free from material error to faithfully embody the
representation contained therein.
_____5. To be complete, financial reports must contain all necessary information that would
influence an economic decision.
_____6. Understandability means that accounting information must comprehensible.
_____7. Verifiability enables the users to identify similarities and differences between two or
more sets economic circumstances.
_____8. The enhancing qualities of accounting information are understandability, faithful
representation, timeliness and comparability.
_____9. Free from error is an ingredient of relevance.
_____10. Timeliness means that the accounting information must be available on time when
needed if it is to influence decision.
8
FLM 1.0
Course Code: ACC 102
Module #2
Directions: Match the regulatory agency in Column A with the specific functions in Column B. Put
your answer after all the questions.
Column A Column B
1. Bangko Sentral ng Pilipinas (BSP) a. To ensure compliance of National Taxes
(Income Taxes and Business Taxes) and
license requirements of all businesses.
2. Philippine Institute of Certified Public b. To ensure payment of local business taxes
Accountants (PICPA) and other local taxes such as community tax,
real property tax and professional tax.
3. Bureau of Internal Revenue (BIR) c. To keep an eye on the operation
4. Security and Exchange Commission d. To regulate the operations of all banks and
(SEC) business import and export activities.
5. Local Government Units (LGU) e. To protect the credibility of CPA certificates
and instil ideals of professionalism, ethics and
competence among CPAs.
A. LESSON WRAP-UP
1) Activity 6: Thinking about Learning (5 mins)
Congratulations for finishing this module! Shade the number of this module that you have finished.
9
FLM 1.0
Course Code: ACC 102
Module #2
b) Think about your learning by filling up your “My Learning Tracker” below. Write your learning targets,
your scores, and learning experience for this session and deliberately plan for our next learning
session.
FAQs
10
FLM 1.0
Course Code: ACC 102
Module #2
11
FLM 1.0
Course Code: ACC 102
Module #2
12
FLM 1.0