ACCOUNTING INTRODUCTION LESSON PLAN

 

Teaching Materials

• Lesson - Fundamental Concepts of Accounting (see below for printable lesson)

• Concepts of Accounting Worksheet

 

Lesson Activity

Introduce each accounting concept and discuss its relevance and application. Use or modify the following situations and ask the students how the concept applies:

Entity – the owner of a painting company takes some paint to use in his home renovations.  Is this paint recorded as a business expense?

Money-Measurement – a printing business is about to be sold to new owners who have no experience in the industry. Is this information recorded in the financial statements?

Going Concern – a company’s stock price has plummeted 70% in the past six months due to increased industry competition.  Do we assume the company is still in business?

Cost – A construction company owns two excavators and is preparing to sell both of them in order to buy one brand new one.  The book value of the two used excavators is $10,000, is that the price that the owner should expect to get as a trade-in value?

Dual Aspect – A company has $40,000 in assets, owes the bank $12,000, and owes creditors an additional $8,000.  How much equity does the owner have in the company?

Objectivity – Have students name five different types of source documents used for accounting purposes.  Invoice, checks, bank statement, purchase orders, cash receipts, bill of lading, loan certificate

Time Period – department stores often have fiscal years that end Jan 31.  Ask students to explain why that is the case. 

Conservatism – discuss the pros and cons of choosing to be prudent when reporting income and expenses. 

Realization – if a toy manufacturer receives an order for 96,000 yoyo’s at $2 each to be delivered in equal installments over the next year, when would the revenue from the order be recorded?  What would the amount(s) be? 

Matching – a dry-cleaning company sells $5000 worth of services in October.  They pay $3000 for their dry-cleaning fluid and supplies every quarter in March, June, September, and December.  What expense, if any, would be recorded in October for dry-cleaning supplies?

Consistency – discuss the importance of consistent accounting between reporting periods. 

Materiality – discuss the impracticality of accounting for every change that occurs within a business on a day-to-day basis.  Use office supplies as the most obvious example.

 

Assessment/Evaluation

Have students complete worksheet. A suggested passing grade is 70% or greater.

 

 

 

Lesson Printable Materials - Worksheets

Print out the teaching lesson pages and exercise worksheets for use with this lesson:

 

ACCOUNTING CONCEPTS LESSON
	Accounting Concepts Lesson * This is a lesson on fundamental accounting concepts..
ACCOUNTING WORKSHEET - STUDENT EXERCISE
	Accounting Concepts Worksheet * Student worksheet based on the above lesson.
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