A lesson on the core principles, definition, and purpose of accounting, including its role as the language of business, the fundamental accounting equation, and the distinction between financial and managerial accounting.
Students learn the basics of accounting in this comprehensive guide by learning what accounting is, including its role as the “language of business” that communicates a company’s financial health to stakeholders. Explore the basics of how accounting works, from revenues and expenses to the calculation of net income. Dive into important concepts such as assets, liabilities, and equity, and see how they come together in the fundamental accounting equation. We’ll distinguish between the two main types of accounting: financial accounting, and managerial accounting. Finally, appreciate why accounting is so crucial, not just for businesses, but also for individuals managing their personal finances or making investment decisions
CONCEPTS
Use this video lesson on the topic of accounting basics. Learn related concepts of:
- Financial Transactions
- Assets and Liabilities
- Revenues and Expenses
- Equity Concepts
- Financial vs Managerial Accounting
- Personal Finance Management
- Investment Decisions
- Financial Responsibility
- Planning and Money Management
- Credit and Debt
GRADE LEVEL
9-12th grades. High School. College. Adult Education.
TIME REQUIRED
45-60 minutes. It may be necessary to adjust the lesson plan and allocate more or less time to certain topics, depending on the needs and interests of the students.
PROCEDURE
Hand out the worksheet below (see the GET LESSON button near the bottom of the page).
Show students the video and have and have them complete the worksheet. Review the questions on the worksheet. A more comprehensive and detailed lesson plan can be accessed below for further instruction and study.
What is Accounting? Introduction
After watching the video, have students tell what the most important things they learned from the video.
Lesson Plan: Understanding Accounting
Objective:
By the end of this lesson, students should be able to define accounting, identify its importance in business and personal finance, and differentiate between financial and managerial accounting.
Materials:
- Video: “What is Accounting?”
- Whiteboard/Blackboard
- Markers/Chalk
- Handouts for activity
- Quiz materials (see below)
Lesson Procedure:
1. Introduction (5 minutes)
Start by asking students what they think accounting is and why it might be important. Encourage them to share their ideas and experiences. Write down some of the answers on the board.
2. Video Presentation (15 minutes)
Show the video, “What is Accounting?” Ask students to note down any important points or questions they might have during the video.
3. Group Discussion (15 minutes)
Facilitate a discussion based on the video. Use the following questions to guide the discussion:
- How was accounting defined in the video?
- What are the roles of accounting in a business?
- What are revenues and expenses? How do they determine a business’s profitability?
- Can anyone explain the basic accounting equation: Assets = Liabilities + Equity?
- What are the differences between financial and managerial accounting? Why might a company need both?
- How can understanding accounting help us in our personal lives?
4. Activity: Financial Statement Analysis (20 minutes)
Split the class into small groups. Provide each group with a handout containing a simplified financial statement of a fictional company. Ask them to analyze the financial health of the company using what they’ve learned about revenues, expenses, assets, liabilities, and equity.
They should identify:
- The company’s revenues and expenses.
- The net income or loss.
- The company’s assets, liabilities, and equity.
- How profitable the company is.
- The sources of the company’s resources, based on the accounting equation.
After completing the analysis, each group should present their findings to the class.
5. Summary and Recap (5 minutes)
Summarize the main points from the video, discussion, and activity. Ask the students if they have any remaining questions.
6. Homework: Quiz
Provide a multiple-choice quiz (see below) based on the video to test students’ understanding of the basic concepts of accounting. This can be a take-home assignment or in class. The quiz includes questions about accounting’s role, the basic accounting equation, the difference between financial and managerial accounting, and the importance of accounting in business and personal life.
Assessment:
The students’ understanding of accounting will be assessed through their participation in the group discussion, their analysis in the activity, and their performance on the quiz. Feedback will be provided to guide their learning process.
Modifications:
For students who might need additional support, provide them with a glossary of key accounting terms and phrases. Also, consider providing scaffolding for the activity, such as guiding questions or a step-by-step analysis guide.
Closure:
End the class by emphasizing the importance of accounting in business and in everyday life, reinforcing the idea that accounting is not just about crunching numbers, but making informed decisions and plans for the future.
Lesson Resources
LESSON WORKSHEET
Worksheet Quiz
