FAR REVIEWER FRA.

Luca Pacioli – FATHER OF

ACCOUNTING.
CHAPTER 1
- Franciscan friar and mathematician.
- He associated the introduction of
Accounting – is a service activity. double entry bookkeeping.
- Its function it to provide quantitative - 1494 he published his book “SUMMA
information, primarily financial in DE ARITHMETICA, GEOMETRIA,
nature, about economic entities that is PROPORTIONI ET
intended to be useful in making PROPORTIONALITA.
economic decision making. - There are 36 chapters on bookkeeping.
- An information system that measures,
Savary and Napoleonic commercial code
process and communicates financial
information about economic entity. - Earliest systematized form of
- Is an art of recording, classifying and accounting regulation developed in
summarizing in a significant manners continental Europe.
in terms of money. - Established under Napoleon Bonaparte
on March 21,1804. The commercial
Primitive accounting – the origin of keeping
code was adopted in 1807.
accounts has been traced as far back as 8500
B.C. date archeologist have established for Jacques Savary – the elder in early
certain clay tokens- cones, disks, spheres accounting text (1622-1690).
and pellets found in MESOPOTAMIA (
modern IRAQ). Nicolas Petri - the first person to group
similar transaction in a separate record and
The tokens were often sealed in CLAY enter the monthly totals in journal.
BALLS, called BULLAE which were broken
on delivery so the shipment could be checked Benjamin Workman – publish The
against the invoice. American accountant the earliest known
American Accounting textbook.
Account records date back to the ancient
civilization of CHINA, BABYLONIA, Eugen Schmalenbach – a german academic
GREECE and EGYPT. and economist.

Middle Ages – ARABIC NUMERALS used - His book is “ the model of chart of
as a result of trade allowing columns of accounts”
numbers to be added and subtracted.

Double-entry bookkeeping – most common

type accounting used in business that every FUNDAMENTAL BUSINESS MODEL
financial transaction has two sides: debit and 1. The investors provide the required
credit side. capital for the business.
Giovanno Farolfi & company – appears 2. The cash in the business can be:
from the “ledger” • Converted into any type of asset
• Spent on operating costs such as
Amatino Manucci – inventor of DOUBLE- salaries, rentals and utilities.
ENTRY BOOKEEPING. 3. Combination of business resources
provides the basis for producing the
- Managed to construct a comprehensive products or services.
and fully-articulated set of double 4. The sale of a product or services
entry records. generates an asset called a receivable.
 5. The cash inflow from collections will 3. Operating activities - involve the use of
be usedto provide the debt providers resources to design, produce, distribute
with interest with there loans to the and market goods and services.
company.
Purpose and phrases of accounting
Types of business
- It handles the financial operations of
A. Services the business but also provides
B. Trader information and advice to other
C. Manufacturer departments.
D. Raw materials
E. Infrastructure
F. Financial Memorandum- books where all transaction
G. Insurance are recorded.
Forms of business organization - Prepared in all chronological order.
Sole proprietorship – has a single owner - Document that shares important
called proprietor who generally is also the financial information.
manager. Journal – is the merchants private book.
- Most common form of business - Entries made here are in one currency,
organization. in chronological order, and in narrative
Partnership – operated by two or more form.
persons who bind themselves to contribute Ledger - an alphabetical listing of all the
money, property, or industry to a common business’s accounts along with the running
fund. balance of each particular account.
Corporation – owned by its stockholders.

FUNDAMENTAL CONCEPTS
Activities of business organization Entity concept – most basic concept in
1. Financial activities – require financial accounting.
resources to obtain other resources used - The business and the personal
to produce goods and services. transaction of the owner are separate.
2. Investing activities – acquire other
resources used in the transformation Periodicity concept - meaningfully
process that is, to transform resources subdivided into equal time period dor
from one form to a different form, which reporting purposes.
is more valuable to meet the needs of
people. - Will be aimless to wait for the actual
Efficient business – provides good and last day of operations to perfectly
services at low costs relative to their measure the entity’s profit.
selling price.
Stable monetary unit concept – Philippine
Effective business – successful in
peso is a reasonable unit f measure and that
providing goods and services demanded
its purchasing power is relatively stable.
by customers.
Going concern – assumed that the business Practice in education/ academe – person in
entity will continue its operations in the an educational institution which involve
future and will not liquidate. teaching of accounting. EX. ACCOUNTING
INSTRUCTOR
Basic Principles
Practice in government - person who holds,
1. Objectivity principle- information is or is appointed to, a position in accounting
not influenced by the personal bias or professional group in government or in
judgement of those who furnish it. government owned. EX. BIR
- connotes verifiability of finding out
whether the information is correct.
- Receipt
2. Historical cost – acquired assets Role of ethics in business
should be recorded at their actual cost. Ethics – concerned with right or wrong and
- Like cost principle dapat kung ilan ang how conduct should be judged to be good or
pagkabili ayun ang irecord. bad.
3. Revenue recognition principle –
revenue is to be recognized in the Business ethics – tells what is right or wrong
accounting period when goods and in a business situation.
services are RENDERED or
performed. Ethical dilemma – situation in which there
4. Expense recognition principle - is no obvious right or wrong decision but
recognized in the accounting period in rather than right or right answer.
which goods and services are USED.
5. Adequate disclosure – all relevant
information that would affect the users
understanding and assessment of the
accounting entity be disclosed in the Fundamental principles
financial statement.
Integrity- a professional accountant should
6. Materiality- only concerned with
be straightforward and honest in all
information that is significant enough
professional and business relationship.
to affect evaluation and decision.
7. Consistency principle – firm should Objectivity – should not allow bias, conflict
use the same accounting method from of interest or undue influence of other to
period to period to achieve override professional or business judgement.
comparability over time within a single
enterprise. Confidentiality – respect the confidentiality
of information acquired as a result of
Accountancy act of 2004 professional and business relationships and
should not disclosed any such information to
Practice of public accountancy – shall
third parties without proper and specific
constitute in a person, bit it her individual
authority unless there is a legal or
capacity, holding out one skilled in the
professional right.
knowledge.
Professional behavior - comply with
Practice in commerce and industry- person
relevant laws and regulation and should avoid
involved decision making requiring
any action that discredits the profession.
professional knowledge in science of
accounting. EX. FINANCIAL Branches of accounting
ACCOUNTING STAFF
Auditing – accountancy professions most Application software – perform useful work
significant service to the public. on general purpose problems.

Bookkeeping – mechanical task involving Basic application:

the collection of basic financial data. • Browsers – navigate, explore, find
information on the internet.
Cost bookkeeping, costing , and cost
accounting – involve the recording of cost • Word processor – prepare written
data in books of accounts. document.
• Spreadsheet – analyze and summarize
Financial accounting – focused on the numerical data.
recording of business transaction and the • Data based management – organize
periodic preparation of reports on financial and manage data information.
position and results of operations. • Presentation graphics –
communicate a messenger or persuade
Financial management – new branch of
other people.
accounting that has grown rapidly over the
last 30 years. Advanced application :

Management accounting – incorporates • Multimedia – create interactive

cost accounting data and adapts them for presentations.
specific decisions which management maybe • Web publisher – create interactive
call upon to make. multi- media web pages.
• Graphic programs – create
Taxation – preparation of tax returns and the professional publication.
consideration of the tax consequence of • Virtual reality – create realistic three
proposed business transactions or alternative dimensional virtual.
courses of action. • Artificial intelligence – simulated
human thought process and actions.
• Project managers – plan projects.
ASEAN ( academicians, students and
educators alliance ) Hardware – consists input devices.
Input devices – translate data and programs
that human can understand into a form the
CHAPTER 2 computer can process.
Parts of information system System unit- consists electronic circuitry
People- users use hardware and software to with two parts.
solve information related or decision making • Central processing unit (cpu) –
problems. controls and manipulate data.
Procedure – manuals and guidelines that • Memory (primary storage ) –
instruct users on how to use the software and temporarily holds data.
hardware. Secondary storage – stores data and
Software- another name of programs tell the programs.
computer how to use data. Output device – processed information from
System software – background software the the CPU.
helps a computer manage its internal Communication device – send and receive
resources. data and programs from one computer to
another.
Data – raw material for data processing. a. Rights to receive cash
b. Rights to receive goods and services
c. Rights to exchange economic
Accounting information resources with another party
The Accounting d. Rights to benefits from obligation of
Process another party.

Liability – present obligation of the entity to

transfer an economic resource as a result of
Economic Accounting past event.
Activities Infromation
Equity – residual interest in the assets of the
entity after deducting its all liabilities.

Decision Makers Financial performance

Income – increases in assets or decreases in

liabilities that results in increase in equity,
Types of accounting information system
other than those relating contributions from
1. Manual system – utilized paper based holders of equity claims.
journals.
Expenses – decrease in assets or increase in
2. Computer based transaction system
liabilities that results in decrease in equity.
– replace paper records with computer
records.
3. Database system – embed accounting
data within the business event data on The account – basic summary device of
which they are based. accounting is the account. A separate
account is maintained for each element that
Elements of financial statements appears in the BALANCE SHEET ( assets,
liabilities and equity) and in the INCOME
• ASSETS, LIABILITIES and EQUITY
STATEMENT (income and expenses).
– relate reporting entity’s financial
position. T account – the simplest form of the account
• INCOME and EXPENSES – relate to because of its similarity to the letter T.
a reporting entity’s financial
performance. The accounting equation

5 ELEMETS PF ACCOUNTING ASSETS = LIABILITIES + EQUITY

1. Asset Assets must always equal to liabilities and

2. Liability equity.
3. Equity
Debits and Credits – The Double entry
4. Income
system
5. Expenses
Debited – amount is entered on the left side
Financial Position
of the account. The abbreviation for debit is
ASSET- present economic resource DR.
controlled by the entity and has a result of
Credited – amount is entered on the right
past events.
side. The abbreviations for credits if CR.
Assets rights:
Normal balance of an account
ASSETS – DEBIT Current Assets
Cash – exchange that a bank will
LIABILITIES – CREDIT accept for deposit.
EQUITY – CREDIT Cash equivalent – readily convertible
to known amounts of cash.
WITHDRAWALS - DEBIT Notes receivable – written pledge that
the customer will pay the business.
INCOME – CREDIT Accounts receivable – customer
arising from sale of services or goods
EXPENSES – DEBIT
on credit.
Accounting events – occurrence that causes Inventories- assets which are held for
changes in an enterprise’s assets, liabilities, sale in the ordinary course of business.
and equity. Prepaid expenses – expenses paid for
by the business in advance.
Transaction – particular kind of event that Non- Current Assets
involves the transfer of something of value Property, plants and equipment -
between two entities. tangible assets that are held by an
enterprise for use in the product or
Type of effects of transaction
supply.
1. Source of asset- asset account Accumulated depreciation – contra
INCREASE and a corresponding account that contains the sum of the
claims liabilities and equity account periodic depreciation charges.
INCREASE. Intangible assets- identifiable
2. Exchange of assets – asset account nonmonetary assets without physical
INCREASE and another asset substance held for use in the
DECREASE. production.
3. Use of assets- asset DECREASE and
corresponding liabilities and equity
DECREASE. Liabilities
4. Exchange of claims – liabilities and Current liabilities
equity INCREASE and another Accounts payable – reverse
liabilities and equity DECREASE. relationship of the accounts receivable.
Notes payable – like a note receivable
Typical Account Titles Used but in a reverse sense.
Accrued liabilities – amounts owed to
Assets – classified only into two: CURRENT
others for unpaid expenses.
and NON- CURRENT
Unearned revenues – receive
Current when: payment before providing its
customers with goods and services.
a. Realized within 12 months Current portion of long term debt –
b. Purpose of trading long term indebtedness which are to be
c. Normal operation paid within one year.
d. Cash and equivalents Non-current liabilities
Mortgage payable – entity has pledge
Non- current when: certain assets as security to the
- Normal operating cycle is not clearly creditor.
indentifiable. Bonds payable – contract between the
issuer and the lender specifying the
terms of repayment and the interest to 2. Indicate the account either assets,
be charged. liabilities, equity, income and
expenses.
Owners Equity 3. Ascertain whether each account is
Capital – investments of the owner of increased or decreased.
the business entity. 4. Determine whether to debit or
Withdrawals – entity withdraws cash credit.
or other assets.
Income summary – temporary Source document – can be analyzed as to
account used at the end of the how they will affect performance and
accounting period. financial position.

Income statement
Income Accounting cycle
Service income – revenue earned by
performing services for a customer. 1. Identification of events
Sales – earned as a result of sale of 2. Transaction are recorded to journal
merchandise. 3. Journal entries are posted to ledger
Expenses 4. Preparation of trial balance
Cost of sales – cost incurred to 5. Preparation of worksheet including
purchase or to produce the product adjusting entries.
sold to customer during the period. 6. Preparation of financial statement.
Salaries and wages expense – 7. Adjusting journal entries are
payments as a result of an employer- journalized and posted.
employee relationship. 8. Closing journal entries are journalized
Telecommunication, electricity, fuel and posted.
and water expenses – related to used 9. Post closing trial balance
of that. 10. Reversing journal entries are
Rent expense – expense for space or journalized and posted.
asset rentals.
First three step are accomplished during the
Supplies expense- expense using
period, fourth to ninth occur after the
supplies in the conduct daily business.
period, last step occurs at the beginning of
Insurance expense – premium paid on
the next period.
insurance coverage.
Depreciation expense – portion of the
cost of a tangible asset.
Uncollectible accounts expense – Journal – chronological record of the entity’s
amount of receivables estimated to be transaction.
doubtful of collection.
- Shows all the effects of a transaction in
Interest expense – use of borrowed
terms of debits and credits.
funds.
- Called the BOOK OF ORIGINAL
ENTRY.
CHAPTER 3 General Journal – “simplest journal”
Transaction analysis
1. Identify the transaction from source FORMAT:
documents.
1. Date – the year and month are not
written for every entry.
 2. Account titles and explanation – 4. Enter the account number in the
account to be debited is entered at the posting reference column of the jounal.
extreme left, account to be credited is
entered slightly indented on the next Ledger account after posting
line, and brief description.
• Each account balance determined by
3. P. R. posting reference – used when
adding all the debits and credits.
the enteries are posted until the
• Sum of an account’s debits is greater
amounts are transferred to the related
than the sum of credits, that account
ledger accounts.
has a debit balance.
4. Debit – amount is entered in this
• Sum of credits is greater, that account
column.
has credit balance.
5. Credit - amount is entered in this
column. Trial balance - list of all accounts with their
respective debit and credits balances.

Preparation of trial balance:

Simple and Compound entry
1. List the account titles in numerical
Simple – only two accounts are affected.
orders.
Compound entry – three or more accounts 2. Obtain the account balances of each
are affected. account from the ledger.
3. Add the debits and credits column.
General Ledger – “ reference book” 4. Compare the totals.
- Classify and summarize transaction,
and to prepare data for basic financial
statement. Locating errors

Classified into two groups: 1. Error in posting a transaction to the

ledger:
1. Permanent accounts or balance sheet • Erroneous amount was posted to the
– ( assets, liabilities and equity) account.
2. Temporary accounts or income • Debit entry was posted as a credit.
statement – ( income and expense) at • Debit or credit posting was omitted.
the end of the period the balances of 2. Error in determining account
there accounts are transferred to a balances:
permanent owner’s equity account.
• Balance was incorrectly computed.
Chart of Accounts – listing of all the • Balance was entered in the wrong
accounts and their account numbers. balance column.
3. Error in preparing trial balance:
Posting – transferring the amounts from the • Trial balance was incorrectly added.
journal to the appropriate accounts in the • Incorrectly added on the trial balance.
ledger. • Debit was recorded in the trial balance
as a credit.
Steps :

1. Transfer the date

2. Transfer the page number from the 1. Prove the addition of the trial balance
journal to the journal reference columns by adding opposite direction.
3. Post the debit figure 2. Is the discrepancy is divisible by 9,
transposition (reversing the order of
 numbers) slide (moving the decimal
point).
3. Compare the accounts and amounts in
the trial balance and the ledger.
4. Recompute the balance of each ledger
account.
5. Trace all postings from journal to
ledger accounts.

Errors are not detected by a trial balance :

1. Failure to record or post transaction.

2. Recording the same transaction more
than one.
3. Recording same entry but with the
same error.
4. Posting a right debit but wrong credit.

INSTRUCTOR NAME:
Kevin Gutierrez Bachiller
 PATHFIT REVIEWER 4. Social wellness – focuses a building
and maintaining healthy relationships,
Wellness – the quality or state of being in feeling connected to others, and having
good health especially as an actively sought a strong support network.
goal.
- The state of being healthy How to improve social wellness:
- Approach to healthcare that
• Interact daily and engage in healthy
emphasizes preventing illness and
discussion
prolonging life, as opposed to
• Create healthy friendship with
emphasizing disease.
individuals
- Achieving optimal health in various
• Participate in community service.
dimensions of life.
5. Spiritual wellness - having sense of
purpose, meaning in life and
connection to something greater that
8 dimension of wellness oneself.
1. Physical wellness - maintaining a How to improve spiritual wellness:
healthy body through regular exercise,
proper nutrition, adequate sleep, and • Take times to reflect about who you
appropriate healthcare. are.
• Meditate.
How to improve physical wellness: • Strengthen religious faith.
• Exercise in daily routine. • Travel and experience nature and other
cultures.
• Eat well-balanced nutrition foods.
6. Environmental wellness –
• Maintain regular sleep.
recognizing the responsibility to care
• Stay away from vices.
for the planet and making choices that
2. Emotional wellness – ability to
contribute to the health of the
understand, manage and express
environment.
emotions in a healthy way, as well as
the ability to cope with stress. How to improve environmental wellness:
How to improve emotional wellness: • Participate and promote recycling
• Conserve water and electricity
• Relax one’s mind and reflect.
• Segregate trash
• Sharing thought and feelings
• Spend time with nature
• Be nice and appreciative.
7. Occupational wellness – finding
• Accept fault, failure and learn from it.
satisfaction and enrichment in one’s
3. Intellectual wellness – engaging in
work and aligning it with personal
mentally stimulating activities and
values and goals.
expanding knowledge, skills and
creativity. How to improve occupational wellness:
How to improve intellectual wellness: • Explore different careers.
• Set career goals and work towards
• Read to stimulate brain.
accomplishing these goals.
• Expand knowledge by enrolling school
• Practice open communication.
• Engage in a hobby
8. Financial wellness – managing
• Share knowledge and skills through
resources, budgeting and planning for
community.
future financial stability.
how to improve financial wellness: c. Power – perform one maximum effort
in a short period of time.
• Start saving money. d. Reaction time – quickly react to an
• Plan for future. external stimulus.
• Identify needs and wants. e. Agility – quickly shist or changes
• Do your own beverage. direction of the body from one point to
another.
f. Speed – perform a task or move from
Physical Fitness – ability to perform one’s one point to another in the shortest
daily task efficiently without undue fatigue possible time.
but with extra “reserve” in case of
emergency.
Physical Activity – any bodily movement
Physical fitness “ GOOD LIFE” – to live produced by skeletal muscles that requires
healthy, satisfying and useful life. energy expenditures.
Two components of physical fitness : - Refers to all actions done either during
1. Health related fitness – primarily work or school, leisure time, and
focuses on the individuals physical household chores.
health and is also linked to prevention
of diseases to maintain quality of life.
a. Body composition – refers to the INSTRUCTOR NAME :
proportion of lean body mass to fat
body mass. Flora May Retreta Walat

BMI = weight in kilogram / height in meter CONTEMPORARY WORLD REVIEWER

b. Cardio respiratory endurance – Contemporary world – period of history

ability of the heart, blood vessels and that is present.
the lungs to adapt to physical exertion
- Significant in global changes
for a prolonged duration.
- Technical advancement
c. Flexibility – ability of the muscles and
- Cultural
joints to go through a full range
motion. Issue of globalization :
d. Muscular strength- ability of the
muscles to exert maximum effort. • International connections
e. Muscular endurance – ability of • Human rights and justice
muscles to endure sub- maximal effort. • Technological

2. Skill related fitness – refers to a

physical abilities which help an
individual learn different sports skills. Brief history of globalization
a. Balance – maintain equilibrium in
Globalization – connectivity across the
relation to changes in body position.
entire world of the economic and cultural life
b. Coordination – relationship between that increased throughout the centuries.
skeletal muscle and nerves in one
aspect movement. - Describe how trade and technology
have made.
1897 “ Charles taze Russel Disadvantages of globalization

- CORPORATE GIANTS – refers to the 1. Economic inequality

large national task or other large 2. Job losses and economic displacement
company’s or enterprise during that 3. Cultural homogenization
time. 4. Environmental impact
5. Political and economic vulnerabilities
1930 – “GLOBALIZE” as a known appeared
publication “towards new education” Advantages of globalization

- Holistic view of human experience in 1. Economic growth

education. 2. Access resources and technology
3. Cultural exchange and diversity
1970’s – word “globalization” was coined. 4. Improve standard of living
Late 1980’s – globalization of “TEODORE 5. Enhanced global cooperation
LEVITT” popularized.

Early 1981 – globalization used as Various Contemporary Drivers of

“ECONOMIC SENSE”
Globalization
Late 2000 – the IMF (international monetary
Economic integration. The setting of
fund) identified 4 basic aspects of
regulatory chains allows for the
globalization
harmonization of regulatory regimes,
2013 - the globalization use to defines particularly through trade agreements.
“BOARDLESS SOCIETY”
Production. The setting of global value
2017 – globalization was use in the chains, particularly through offshoring and
ACADEME manufacturing clusters allows for networked
forms of global production
2018 – globalization was USE IN ALL
DISCIPLINE/FIELD. Transportation. The setting of transport
chains supported by containerization enables
3 indicators of globalization the potential to move large quantities of
goods over long distances.
1. Economic integration –
interconnectedness of economies Transactions. The setting of information
through international trades. chains through information and
2. Cultural exchange communication technologies allow
3. Technological connectivity – investments and capital to be transferred.
communication
Arjun Appadurai different kinds of
Nature of globalization Globalization:

1. Economic nature a. Ethnospace - Refers to the global

a. Integration of markets movement of people.
b. Economic independents b. Technospace -Refers to the circulation
2. Cultural of mechanical goods and software.
a. Cultural exchange and hybridization c. Mediaspace - -It is all about the flow
b. Global cultural influence of a culture.
3. Technological d. Financespace - -Denotes the global
a. Advancement in communication circulation of money.
 e. Ideospace - Realm wherein political - Integration of economies worldwide
ideas move around. through the movement of goods,
capital and across borders.
WHY WE NEED TO STUDY THE - Historical process (human inflation
WORLD? and technological progress.)
1. Because we are all citizen of the world International trading system
2. To cure parochialism.
- Global network of trade rules,
Globalization – increasing interaction of agreements, and institutions.
people, state or other countries through - WTO and regional trade agreements
growth of the international flow of money, (e.g., EU, USMCA) are central.
ideas, and culture. - Promotes economic integration but
Manfred Stedger – expansion, faces challenges like protectionism
intensification of social relations and and fair trade issues.
consciousness across the world. Ex. Silk Road ( it is international but not
Expansion – refers to the both relation of global )
local networks and multiplication of social - Network of pathway in the ancient
networks. world that spand in china. ( from china
Intensification – refers to the expansion, to what is know middle east and
stretching, and acceleration of this network. Europe).

Characteristics of globalization Galleon Trade ( from 16th- 18th century)

1. Social mobility - Connected from manila, Acapulco, and

2. Intensification of interaction Mexico.
3. Active process - Europe competed with one another to
4. Borderless interaction sell more goods in order to increase
5. Spread of ideas, knowledge, culture, their countries income. ( which was
religion and etc. soon termed monetary reserves)

Primary focus of globalization – economic Gold standard – common system where the
growth basis for currency prices and fixed exchange
rate system are base the value of gold.
Globalism – more political because wide
belief. Great Depression (1920’s – 1930’s )

- Cause by the gold standard

- Circulation of money was limited
The Globalization of World Economics
Fiat currencies
World Economy - the global network of
economic activities, including trade, - Is not backup by precious metals and
investment, and finance, that connects all whole values are determine by either
nations. cost relatives to other currencies.

Economic Globalization - refers to the Bretton Woods System ( john maynard

integration of national economies through Keynes)
increased trade, investment, and capital flows
across borders.
 - The network of global financial LAW OF BLOOD – Jus Sanguinis
institution that promote economic
interdependence and prosperity. Naturalization – process of oath- taking

Concept of Keynes: - Legal process by which a person can

be a citizen after birth.
1. GLOBAL KEYNESIANISM – • Territory – border of the country
managing economic crises / managing • Government – agency which the
the spending of our nation. people established.
International Bank for Reconstruction Structure of Government
and Development ( IBRD)
1. Legislative power-
- Responsible for funding postwar 2. Executive power – power to enforce
reconstruction projects. the law and administer the law
3. Judicial power – has a power to
International Monetary Fund (IMF)
interpret the law.
- The GLOBAL LENDER
Sovereignty – state has a supreme power
Stagflation – stagnation and inflation
• INTERNAL SOVEREIGNTY – no
combination
individuals or drew can operate in a
• STAGNATION – decline in economic give national territory to be given by
growth and employment. state.
• INFLATION – place alongside a sharp • EXTERNAL SOVEREIGNTY –
increase in prices. policies and procedures are
independent of the intervention of
Washington Consensus – proponents argued other state.
that government expenditures should be kept
to have bare minimum in order to minimize
debt.
History of global politics: creating an
Mortgage Backed Securities – combination international order
of multiple mortgage that they assumed
Internationalization – not equal to
would pay a steady rate.
globalization.

- It is the major part of the

State – political entity with define territory, globalization.
government and sovereignty recognized by - Lens through which one can evaluate
other state. the globalization of politics.
- refers to the increasing importance of
Nation – group of people who share common international trade, international
cultural, linguistic, ethnic or historical ties. relations, treaties, alliances, etc.

Not all political states aligned with a single THE FOUR KEY ATTRIBUTES OF
nation and not all nations have achieve TODAY POLITICS:
statehood.
• -Independent and self-
Citizen of Population governing countries or states.

LAW OF SOILS – Jus Soli • -These countries interact with

each other through diplomacy
 • Presence of international territory. He argued that a state must have a
organization such as United form of government.
Nations (UN)
Guiseppe Mazzini - the first thinker to
• -International organizations also reconcile nationalism with liberal
take lives of their own internationalism. He believed in a Republican
government and proposed a system of free
World war ll – the Germany, Italy, and Japan nations.
contradicts internationalism.
Woodrow Wilson - became one of the 20th
Internationalism - Internationalism is a century’s most prominent intenationalist. He
political principle which transcends believed in the principle of self-
nationalism and advocates a greater political determination-the belief that the world’s
or economic cooperation among nations and nations had a right to a free, and a sovereign
people. Internationalism is most commonly government.
expressed as an appreciation for the diverse
cultures in the world, and a desire for world Karl Marx - was also an internationalist, but
peace. who different from the former because he did
not believe in nationalism. He believed that
Nationalism - Nationalism emphasizes and true form of internationalism should
collective identity - a 'people' must be deliberately reject nationalism.
autonomous, united, and express a single
national culture. Market – overall system where the sellers
and buyers come together to engage
Inter state system - The theory of the exchange asset.
interstate system holds that all states are
defined through their relationship to other Integration – process of combining different
states or through participation in the world components or entities in to a unifies whole.
economy, and that divisions between states
help to divide the world into a core, periphery Market integration – expansion of terms by
and semi-periphery. consolidating additional marketing functions
and activities under single management.
Napoleon Bonaparte - believed in spreading
the principles of the French Revolution- 1. Remove transaction cost.
liberty, equality, and fraternity. 2. Poster competition
3. Provide better signals for optimal
Napoleonic code – equal rights, forbidden generation and consumption
births priveleges, freedom to choose religion, 4. Improve security supply
and promoted meritocracy in government 5. Integrate 2 markets without
service. interconnection

Jeremy Bentham - Writing the late 18th Types of market integration

Century after Kant, British philosopher
Jeremy Benthan (who coined the word 1. Horizontal integration – firm or
“international” in 1780), advocated the agency gains control of other or
creation of “international law” that would agency performing similar marketing
govern the inter-state relations. function at the same level at marketing
systems.
Immanuel Kant - was a German Philosopher
and was the first major thinker of liberal Effects :
internationalism. Kant likened states in a. Reduce competition
global system people living in agiven
 b. Gaining larger share of the
market and higher profits.
c. Attaining economies of scales.
d. Specializing in the trade.
2. Vertical integration – when a term
performs more than 1 activity in the
sequence of the marketing process.

Ex. Apple Brand

Two kinds of vertical integration:

a. Forward integration – ex. Whole

sales siya at siya rin and nagreretail
b. Backward integration – ex.
Delmonte corporation you are the
manufacturer but you will buy raw
materials in others.

Effects of vertical integration:

a. More profits
b. Risk reduction
c. Improve imbargenning power
d. Lowering cost
3. Conglomeration integration -
process by which a large company
draws by acquiring or merging with a
diverse range of business open across
different industries.

Ex. SM investment corporation

Effects :

a. Risk reduction through diversification

b. Acquisition of financial liverage
c. Empire building

Degree integration

1. Ownership integration – assets of a

firm. Ex, processes firms buy
wholesale firm
2. Contract integration – agreement
between 2 firm.

INSTRUCTOR :

Janet Gonzales Burce