2. ObjectivesObjectives
At the end of the lesson, students should be able to :
• explain the concepts of Accounting Entity,
Accounting Period, Monetary Convention,
Going Concern and Historical Cost.
• know the Accounting Cycle.
5. The business exists as a unit by itself.
It is separated from its owner.
Only transactions and events related
to the business are recorded in the
business books.
13. Can you tell me…
• How much is your health worth?
• If I want to buy your attitude, how much
should I pay you?
• Can I buy laziness from you?
How much are you willing to sell?
14. Do you think everything in the
world can be measured in terms of
dollars and cents?
15. Therefore,Therefore, ONLY MONEYONLY MONEY is usedis used
as the basic measuring unit foras the basic measuring unit for
financial reportingfinancial reporting
17. Imagine you just set up a new company.
Do you think you want to sell off your
business next year? Why not?
Assumption: The business entity will
continue to operate and it will not close
down.
18. All assets owned by the business are
assumed to be used into the
unknown future.
Hence, we value the assets at
historical costs.
24. One day, you bought a new handphone Nokia 8310…
You also received an invoice from M1…
25. You decided to write down what you have spent on
a notebook so that you will not forget…
26. To record every different expenses on your
notebook seem very messy to you, so you decided
to keep a notebook for hobbies, books &
stationery, food & transport etc…
27. Income Expense
$ $
Pocket money received 140
Hobbies 20
Food & Transport 70
Books & Stationery 10
Sports & Recreation 15
Handphone bill 20
Left* 5
140 140
You want to see if your records are correct at the end of
the month… Did you forget to record anything?…
28. At the end of the month, you added up all your pocket
money received and the total amount of money spent.
Did you overspent on your hobbies? Do you have
some money to save for the month? How much money
do you have left at the end? Should you cut down on
your expenses next month? …