lesson plan in bookkeeping for demo .docx

7/28/2019 Lesson Plan in bookkeeping for demo .docx

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Polytechnic University of the Philippines

COLLEGE OF EDUCATIONMabini Campus, Sta. Mesa, Manila

Lesson Plan in Bookkeeping (CHAPTER 4: Measuring Business Income)I. TARGETS

At the end of the lesson, the students will be able to:

1. Identify the difference between the cash basis of accounting and accrual basis ofaccounting.

2. Determine the importance of the accounting period in any business entity.3.

Explain the revenue principle and the expense principle of accounting as well theframework it has for the preparation and presentation of financial statements.

4. Generalize the significance of the time-period concept in a business.II. CONCEPT

Measuring Business Income

SUBCONCEPT: Cash vs. Accrual Basis of Accounting Accounting Period Revenue Principle Expense Principle Time-Period Concept

MATERIALS: Projector Laptop Cartolina and score cards Chalk / Whiteboard Marker

REFERENCE:Hernane, Milagros. Principle in Financial Accounting, pages 101-103


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III. STRATEGIESA. PREPARATION1. Routine Activities

Greeting the class, prayer, passing of assignments (if they have) and ask them to keep all

their notes away.

2. Review

Show them the illustration in the cartolina paper which indicates the table of debit and

credit rules and let the whole class answer for the corresponding exercise. Ask one of the

students for each right answer to write the correct answer in the board.

DEBIT AND CREDIT RULESIncrease Decrease Norm

BalanceASSETS **Debit Credit Debit

LIABILITIES Credit Debit Credit

CAPITAL Credit Debit Credit

Owners,

Drawing

Debit Credit Debit

REVENUE Credit Debit Credit

EXPENSE Debit Credit Debit

**the shaded part shown in this table will be eliminated in the actual material.3. Motivation

A student has the tendency to divert his/her attention in some other stuff during the

discussion especially in a math class. Throughout the discussion this motivation would play

part. The class will be divided into two groups. The name of the game is Pick Your Luck. Each

group should have different representative to answer the questions throughout the discussion.

The first player who raises his hand will be given the chance to answer the question. If the

player got the correct answer then, he will choose a number of his want in the score board

then he will reveal whats inside it and the points will be added to the groups score. Take note

that the score cards in the score board has special powers that can get the rivals point, import

one of the member of the other group and neutralizes the opponent so that it cannot get the

chance to answer the next question or they can share scores.


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B. PRESENTATIONCash vs. Accrual Basis of Accounting

Cash Basis of Accounting

Recognizes revenuewhen cash is received. Recognizes expensewhen cash is paid.

Under the cash basis, service rendered in current year (2013) for which cash is

collected in the next year (2014) would be treated as 2014 revenue.

Under the cash basis, expense incurred in current year (2013) for which cash is disbursed in

the next year (2014) is 2014 expense.

Because of these improper assignments of revenues and expenses, the cash basis of

accounting is generally considered unacceptable. There is no need for adjusting entries under

the cash basis of accounting.

Accrual Basis of Accounting Recognizes revenue when sales are made or services are performed, regardless of when

cash is received.

Recognizes expenseas incurred, whether or not cash is paid out.Under the accrual basis of accounting, adjusting entries are prepared to bring the accounts

up-to-date for an economic activity that has taken place but has not been recorded.

Accounting PeriodAccounting period is the period of time: One month One quarter One year

Into which an entitys life is arbitrarily divided for financial statement purposes. Every

business prepares Annual Financial Statements.

Fiscal Year

Twelve month accounting period used by an entity. Used by most companys coincides with the calendar year which ended on (some other)

December 31.

Revenue PrincipleRevenue Principle is the basis for recording revenues

Tells accountants when to record revenue and the amount of revenue to record. Says to record revenue when it has been earned-but not before.


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Framework for the Preparation and Presentation of Financial Statements

States that Income or Revenue is recognized in the income statement when an increase infuture economic benefit related to an increase in an asset or a decrease of a liability has

risen that can be measured reliably.

The Matching PrincipleMatching Principle guides accounting for expense.

Identifies all expenses incurred during the period, measure the expenses, and match themagainst the revenue earned during the same time period.

The Framework for the Preparation and Presentation of Financial Statements

Expenses are recognized in the income statement when a decrease in future economicbenefit related to a decrease in an asset or an increase of a liability has arisen that can be

measured reliably.

Time-Period Concept Ensures that information is reported at regular intervals.

Fire insurance policies, for example, cover a period of 12 months. If a company prepares

monthly income statements, a portion of the cost of such policy should be allocated to the cost

of insurance expense each month that is policy is in force. Cost of the policy=total cost/12

months.

Not all transaction can be precisely divided by the accounting periods. The purchase of a

building, furniture & fixtures, machine & equipment provides benefits to the business over all

the years in which such an asset is used.

For some expenditures, such as advertising/employee training programs it is not possible to

estimate objectively the number of accounting period. Accounting principle require that the

expenditure be charge immediately to expense.

C. APPLICATIONAsk questions to the students about the topic that has been discussed.

1. How many months does the fiscal year has?2. State the basic principle of revenue in your own words.3. State the basic principle of expense in your own words.4. For you, which is better? Cash or Accrual basis of accounting?


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D. EVALUATIONSee attached paper

E. AGREEMENTBefore dismissing the class, ask them to read ahead the next topic.

Reference: Hernane, Milagros. Principle in Financial Accounting, pages 103-106


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Polytechnic University of the Philippines

COLLEGE OF EDUCATIONMabini Campus, Sta. Mesa, Manila

Name: _________________________________ Date: _______________

Course, Year & Section: ___________________ Miss Christine Garcia

GENERAL INSTRUCTIONS: Erasures and any form of alterations are invalid and will be

considered wrong.

I. IDENTIFICATION: Write on the spaces provided the term that is being described

______________1. Tells accountants when to record revenue and the amount of revenue torecord.

______________2. Twelve month accounting period used by an entity.

______________3. Ensures that information is reported at regular intervals.______________4. Recognizes revenue when cash is received.

______________5. Recognizes in the income statement when an increase in future economic

benefit related to an increase in an asset or a decrease of a liability has risen

that can be measured reliably.

______________6. Recognizes in the income statement when a decrease in future economic

benefit related to a decrease in an asset or an increase of a liability has arisen

that can be measured reliably.

______________7. Identifies all expenses incurred during the period, measure the expenses,

and match them against the revenue earned during the same time period.

______________8. Into which an entitys life is arbitrarily divided for financial statement

purposes. Every business prepares Annual Financial Statements.

______________9. Recognizes expenseas incurred, whether or not cash is paid out.

______________10. Recognizes expense when cash is paid.

lesson plan in bookkeeping for demo .docx

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