Accounting · Lesson Plan
Fundamental Concepts of Accounting
Accounting is the language of business — and it rests on a set of fundamental concepts that form the basis of Generally Accepted Accounting Principles (GAAP). This lesson explains the key concepts (entity, money-measurement, going concern, cost, and dual aspect) so students can read financial statements without guessing what the numbers mean, and introduces the fundamental accounting equation.
For Teachers
Lesson at a glance
- Topic
- Accounting
- Grade Level
- Grades 11–12 / College
- Resource Type
- Lesson + Worksheet
- Estimated Time
- 45–60 minutes
- Format
- Lesson + worksheet
- Materials
- Printable lesson, worksheet, calculator
What Students Learn
Learning objectives
- Explain why accounting needs shared concepts
- Describe the entity and money-measurement concepts
- Explain the going-concern and cost concepts
- State the dual-aspect concept and the accounting equation
- Read an asset’s book value correctly
Materials
What you’ll need
- Printed lesson and worksheet (one per student)
- Calculator
- Pencils
Key Terms
Vocabulary
- GAAP
- Generally Accepted Accounting Principles.
- Entity
- The business, kept separate from its owners, in the accounts.
- Going concern
- The assumption a business will keep operating indefinitely.
- Cost concept
- Recording assets at the price paid to acquire them.
- Dual aspect
- Every transaction affects at least two accounts.
- Accounting equation
- Assets = Liabilities + Equity.
For Teachers
Lesson plan
Estimated time: one 45–60 minute class period.
Lesson sequence
- Why concepts? (10 min). Use the truck-value example to show why shared concepts matter.
- Key concepts (20 min). Entity, money-measurement, going concern, and cost, with examples.
- Dual aspect (10 min). Introduce Assets = Liabilities + Equity.
- Worksheet (15 min). Students apply the concepts and interpret book values.
Assessment
Assess the worksheet for correct application of the concepts and the accounting equation.
Discussion
Discussion questions
- Why does accounting rely on shared concepts?
- What does the entity concept require?
- What does the going-concern concept assume?
- How does the cost concept treat an asset’s value?
- What is the dual-aspect concept?
Printable Lesson & Worksheet
Fundamental Concepts of Accounting — Lesson & Worksheet
A printable lesson on the fundamental accounting concepts behind GAAP — entity, going concern, cost, dual aspect — and the accounting equation.
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