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Fundamentals of Accountancy Business and Management 1 PDF
Fundamentals of Accountancy Business and Management 1 PDF
FUNDAMENTALS OF
ACCOUNTANCY,
BUSINESS,
AND
MANAGEMENT 1
Activity Sheets
ii
iii
Table of Contents
A. Cover Page i
B. Title Page ii
Challenging Activities 8
Rubrics 17
Rubrics 31
iv
Challenging Activities 38-40
Rubrics 65
v
Moderate Activities 99-100
G. References 149
vi
BACKGROUND INFORMATION
The objectives of this Activity Sheets are as follows: 1.) to appreciate the evolution of
Accounting, 2.) to enhance the learner’s ability in understanding fundamental accounting
concepts, 3.) learn on how to solve exercises on accounting principles as applied in various
cases, 4.) to illustrate the accounting equation, and perform operations involving simple cases
with the use of accounting equation, 5.) to classify the five major accounts and prepare chart of
accounts, 6.) to prepare journals and ledgers, 7.) to analyze common business transactions
using rules of debit and credit and solve simple problems and exercises in the analyses of
business transactions, 8.) to describe the nature of transactions in a service business, record
transactions of a service business in the general journal, post transactions in the ledger and
prepare the trial balance, 9.) to prepare adjusting entries and complete the accounting cycle,
and 10.) to describe the nature of transactions in a merchandising business; record transactions
of a merchandising business in the general and special journals; post transactions in the general
ledger and subsidiary ledgers; prepare trial balance; prepare adjusting entries; and complete the
accounting cycle of a merchandising business.
The authors hope that users of this Activity Sheets will be able to build good foundation on the
Basic Accounting which is very important specifically in the preparation of financial
statements. Wherein from this reports, users can decide well on how to allocate and use their
limited resources efficiently and effectively
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Republic of the Philippines
DEPARTMENT OF EDUCATION
Region I
San Fernando City
La Union
Objectives:
The learner shall be able to:
1. Define accounting, describe the nature of accounting, explain the functions of
accounting in business, and narrate the history/origin of accounting.
2. Define external users and give examples and define internal users and give examples.
3. Identify the type of decisions made by each group of users and describe the type of
information needed by each group of users.
Prepared by:
LEONIDES L. GAVINA
Master Teacher 1
Name: _____________________________________________________ Date: __________
Grade/Section: _______________________________________________Score:__________
Most Essential Learning Competency: The learner defines accounting; describes the
nature of accounting; narrates the history/origin of accounting; defines external users
and gives examples; and defines internal users and give examples.
I. Finder’s Keepers: The following are jumbled letters, arrange them to form a word.
1. GNTIACNCOU 6. SACIOTNTRAN
2. GINYIFNTIED 7. FROAMNIOTIN
3. GINDORCER 8. SNOISICED
4. MANEAGENTM 9. KOOBINGPEEK
II. True/False: Write the word True if the statement is correct otherwise write the word
1
_____7. The AICPA mentioned four phases of accounting in its definition
namely: recording, classifying, summarizing and communicating.
III. Ako na lang, Ako na lang uli: Choose the letter that best correspond to your answer
___4. This type of users makes use of general purpose financial statement.
2
B. Economic system D. Information system
3
Name: _____________________________________________________ Date: __________
Grade/Section:_______________________________________________ Score:__________
Most Essential Learning Competency: The learner defines accounting; describes the
nature of accounting; narrate the history/origin of accounting; defines external users
and gives examples; and defines internal users and gives examples.
4
9. In the 14th century Luca Pacioli described the system __________ used by
Venetian merchants in his Summa de Arithmetica, Geometria, Proportioni et
Proportionalita.
5
II. Matching Type: Match descriptions in Column B with appropriate terms in Column A.
Column A Column B
_____1. Communication A. Journals and ledgers are used in this process as well as
classifying and summarizing
_____2. Identification
B. Financial Statements are analyze and interpreted by users
_____3. Recording
to make economic decisions
_____4. Luca Pacioli
C. By looking or referring into the Business Documents, one
_____5. Accounting know what transactions transpired
6
III. Fill in the Blanks: Fill in the missing words in the blank provided.
7
Name: ___________________________________________________ Date: _____________
Grade/Section:____________________________________________ Score:_____________
Most Essential Learning Competency: The learners define accounting; describe the
nature of accounting; narrate the history/origin of accounting; define external users and
give examples; and define internal users and give examples.
K to 12BEC CG:ABM_FABM11-III-a-1,2,4,7,8
I. Direction: Illustrate the connectivity of the four (4) phases of Accounting and state
a concise explanation for each phase.
II. Direction: Differentiate internal users from external users and cite examples under
each type.
8
Name: ___________________________________________________ Date: _____________
Grade/Section:_____________________________________________ Score:____________
Most Essential Learning Competency: The learner define accounting; describe the
nature of accounting; narrate the history/origin of accounting; define external users and
give examples; and define internal users and give examples.
I. True/False: Write the word True if the statement is correct otherwise write the word
False in the space provided and underline the word/s that make the statement incorrect.
_____1. There are four (4) phases of accounting which are found in the definition
given by the AICPA namely: recording, classifying, summarizing, and
interpreting.
_____2. 14th Century was the beginning of Modern Accounting in Europe and
America.
_____5. Interpreting is the phase of accounting wherein only the owner use
financial statements to make an economic decision.
9
_____10. Accounting is a service activity wherein its function is to provide
qualitative information.
II. Multiple Choice: Choose and write the letter that best correspond to your answer on
___4. This type of users makes use of special purpose financial statement.
10
___7. Accounting is a/an
___10. They are person within business firm who use financial information.
III. Identification: Identify what is being asked for. Write your answer in the space
provided.
_______8. These are reports prepared as bases for making economic decisions
11
_______9. Accounting process which involve keeping systematic record of
business transactions.
12
Answer Key:
Simple Activities
Test I.
1. ACCOUNTING 6. TRANSACTION
2. IDENTIFYING 7. INFORMATION
3. RECORDING 8. DECISIONS
4. MANAGEMENT 9. BOOKKEEPING
5. COMMUNICATION 10. CREDITORS
Test II.
1. TRUE 6. TRUE
2. FALSE 7. FALSE
3. TRUE 8. FALSE
4. TRUE 9. FALSE
5. FALSE 10. TRUE
Test III.
1. A 6. D
2. B 7. B
3. C 8. B
4. B 9. C
5. B 10.B
Moderate Activities
Test I.
1. Accounting 11. External users
2. Identifying 12. Financial
3. Luca Pacioli 13. 19th century
4. Accounting 14. External users
5. Summarizing 15. Accounting
13
6. Internal users 16. Recording
7. Double-entry bookkeeping 17. Classifying
8. Internal users 18. Summarizing
9. Double-entry bookkeeping 19. Interpreting
10. Means 20. Internal Users
Test II.
1. B 6. F
2. C 7.G
3. A 8. J
4. E 9. I
5. D 10. H
Test III.
1. Recording 15. Art
2. Classifying 16. Financial
3. Summarizing 17. Means
4. Money 18. Information
5. Transactions 19. Customers
6. Events 20. Creditors
7. Financial 21. Prospective investors
8. Interpreting 22. Suppliers
9. Identifying 23. Management
10. Recording 24. Owners/Stockholders
11. Communicating 25. Employees
12. Users and other answers for 21 – 23
13. Service Creditors
14. Process Government agencies
15. Art Customers
14
Challenging Activities
Test I.
Recording Classifying Summarizing Interpreting
Test II.
External users are those individuals or organization who do not manage or work for
a company but uses its financial statements. Example - owners/stockholders, managers,
employees, while Internal users are people within a business organization who use
financial information. Example - creditors, suppliers, government agencies like BIR,
customers.
Test III.
History/origin
Enrichment Activities
Test I.
1. True
2. False 14th
3. False economics
4. True
5. False only
6. False monthly
7. False end/means
8. False external
9. False modern time
10. False qualitative
11. False dissemination
12. False creditors
13. False accountants
14. False external
15. False bookkeeping
15
Test II.
1. A 6. D
2. B 7. D
3. C 8. B
4. A 9. B
5. B 10.A
Test III.
1. Accounting 6. Accounting
2. Phases of Accounting 7. Identifying
3. Accounting 8. Financial statement
4. Communicating 9. Recording
5. External 10. Luca Pacioli
16
Rubrics
Challenging Activities
Test I-III.
Descriptors
Criteria 5 3
Content Answer given is based on an Answer is unrealistic, lacking
actual or real-world situation that relevant context and cannot be
can be linked to the topic. linked to the topic.
Grammar The answer contains only 1 or 2 The answer contains many spelling
spelling errors. The answer errors. The answer contains many
contains only 1 or 2 grammatical grammatical errors.
errors.
17
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region I
San Fernando City
La Union
Objectives:
The learner shall be able to:
1. Define and understand the different accounting concepts and principles and
identify the accounting concepts and principles as applied in various cases /
real-life situations.
2. Illustrate the accounting equation.
3. Solve exercises with the use of the accounting equation and the expanded
accounting equation.
Prepared by:
LEONIDES L. GAVINA
Master Teacher
Name: _____________________________________________________ Date: ___________
Grade/Section: _______________________________________________ Score:__________
Title of the Activity: Identification and Classification
Most Essential Learning Competency: The learners explain the varied accounting
concepts and principles, solve exercises on accounting principles as applied in various
cases, illustrate the accounting equation, and perform operations involving simple cases
with the use of accounting equation.
K to 12 BEC CG: ABM_FABM11-IIIb-c-15 to ABM_FABM11-IIIb-c-18
18
9. This principle states that amount shown in the financial statements should be at
its historical cost. COTS
10. Another word for conservatism. RUPEEDNC
II. Identify component of the accounting equation being described. Choose from the items
below.
III. Classify the words in the box as ASSETS, LIABILITIES, or OWNER’S EQUITY.
19
Name: _____________________________________________________ Date: ___________
Most Essential Learning Competency: The learners explain the varied accounting
concepts and principles, solve exercises on accounting principles as applied in various
cases, illustrate the accounting equation, and perform operations involving simple cases
with the use of accounting equation.
Directions: Below are situational problems. Provide what is being asked for.
I. Below are accounting assumptions, match each case or situation to the correct
accounting assumption.
20
II. Below are accounting principles, match each case or situation to the correct
accounting principle.
1. When a customer pays for the goods he/she bought from CSI, CSI must
have a copy of the receipt to represent as evidence for the goods it sold.
2. When Harvent School buys a laptop for school use, it should be recorded at
the price it was bought.
3. A school purchases a calculator with an estimated useful life of three years.
Since a calculator is immaterial relative to the schools assets, it should be
recorded as an expense.
4. When a beautician at E-Mix Salon has already finished rebonding the hair of
a customer it should be recorded as revenue eventhough the customer has
not yet paid e-mix salon.
5. Danny is car salesman in Toyota. He has sold a car to one of his customers.
The sale of the car and the commission that Danny will receive from Toyota
should be recorded at the same accounting period.
III. Supply the missing amounts to satisfy the basic accounting equation.
A ? ₱12,500 ₱50,000
B ₱225,550 ? ₱185,000
C ₱150,125 ₱40,550 ?
D ₱572,000 ? ₱286,000
E ? ₱150,000 ₱75,000
21
Name: ______________________________________________________Date: __________
Grade/Section: _______________________________________________ Score:__________
Most Essential Learning Competency: The learners explain the varied accounting
concepts and principles, solve exercises on accounting principles as applied in various
cases, illustrate the accounting equation, and perform operations involving simple cases
with the use of accounting equation.
22
II. Give examples of how we can apply the following accounting assumptions or
principles.
1. Objectivity Principle
3. Cost Principle
4. Matching Principle
23
Note: Check the equality of the accounting equation.
Assets Liabilities Owner’s Equity
Cash Supplies Equipment Accounts L, Capital Revenue Expenses
Payable
24
Name: ______________________________________________________Date: __________
Most Essential Learning Competency: The learners explain the varied accounting
concepts and principles, solve exercises on accounting principles as applied in various
cases, illustrate the accounting equation, and perform operations involving simple cases
with the use of accounting equation.
Directions: If you were not able to get a passing score for the first activities,
answer the succeeding activities below.
25
4. Cash - __________________________
5. Interest Expense - ____________________
6. Office Supplies - ________________________
7. Sales - ___________________________
8. Service Revenue - ________________________
26
Answer Key:
Simple Activities
Test I.
1. MATERIALITY
2. ECONOMIC ENTITY
3. OBJECTIVITY
4. GOING CONCERN
5. ACCRUAL
6. TIME PERIOD
7. MONETARY UNIT
8. CONSERVATISM
9. COST
10. PRUDENCE
Test II.
1. C
2. E
3. A
4. D
5. B
Test III.
27
Moderate Activities
Test I.
1. Accrual Basis
2. Time Period
3. Economic Entity
4. Monetary Unit
Test II.
1. Objectivity
2. Cost
3. Materiality
4. Revenue Recognition
5. Matching
Test III.
Assets Liabilities Owner’s Equity
Challenging Activities
Test I.
A. Accounting Assumption
1. Economic Entity Assumption
2. Monetary Unit Assumption
3. Time-Period Assumption
B. Accounting Principle
28
4. Materiality Principle
5. Objectivity Principle
Test III.
Assets Liabilities Owner’s Equity
Cash Supplies Equipment Accounts L, Capital Revenue Expenses
Payable
₱200,000 ₱200,000
-₱10,000 -₱10,000
-₱25,000 ₱25,000
₱150,000 ₱150,000
₱42,800 ₱42,800
-₱50,000 -₱50,000
-₱7,400 -₱7,400
-₱13,300 -₱13,300
₱137,100 ₱25,000 ₱150,000 ₱100,000 ₱200,000 ₱42,800 -₱30,700
₱312,100 ₱312,100
Enrichment Activities
Test I.
1. True
2. True
3. False
4. True
5. False
Test II.
1. Liability
2. Asset
3. Asset
4. Asset
29
5. Owner’s Equity
6. Asset
7. Owner’s Equity
8. Owner’s Equity
Test III.
30
Rubrics
Challenging Activities
Test II.
Descriptors
Criteria 5 4
Realism Example given is based on an Example is unrealistic, lacking
actual or fictionalized real-world relevant context and cannot be
situation that can be linked to the linked to the topic.
topic.
Grammar The example contains only 1 or 2 The example contains many spelling
spelling errors. The example errors. The example contains many
contains only 1 or 2 grammatical grammatical errors.
errors.
31
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region I
San Fernando City
La Union
Objectives:
The learner shall be able to:
1. Identify and define the five major accounts.
2. Cite examples of each type of account.
3. Prepare chart of accounts.
Prepared by:
LEONIDES L. GAVINA
Master Teacher 1
Name: _____________________________________________________ Date: ___________
Grade/Section:________________________________________________________ Score:___________
Most Essential Learning Competencies: Discuss the five (5) major accounts and
prepare chart of accounts.
I. Jumbled letters: Arrange the jumbled letters below to form a word. Please write your
answer in the space provided.
1. SOSL - __________
2. IANG -__________
3. SSEAT -__________
4. YTLIILIBA -__________
5. EIONCM -__________
6. PENSSEEX -__________
7. YTIUEQ -__________
8. SOUNTACC -__________
9. EALR -__________
10. LANINOM -__________
32
II. Matching Type
Select your answer from SET A. Write the answer of your choice in the space
provided in SET B.
SET A.
_______________2. These are accounts that can be found in the Statement of Financial
Position.
_______________4. Resources owned by the business which can be used for future
economic benefits.
_______________6. It is an income that may or may not arise in the ordinary course of
business.
33
III. Fill in the blanks
Identify the letter in the space provided
_,I,_,_,I,_,_,TY 1. It is an obligation of the entity to outside parties.
_,_,UI,_,_ 2. The difference between total assets and total liabilities.
_,_,_,E,T 3. This is an important commodity that is owned by an enterprise.
_,_,C,_,M,_ 4. It includes both revenue and gains.
_,_,_,E,_,S,E,_ 5. Depreciation, depletion, and amortization are examples of this
account.
34
Name: ___________________________________________________Date: _____________
Grade/Section:____________________________________________________Score:____________
Most Essential Learning Competencies: Discuss the five major accounts and prepare
chart of accounts
I. TRUE or FALSE: Write True if the statement is correct and if not, write False.
_____1. Expenses represent the amount paid for buying goods or services.
_____2. Selling of vehicles which is not a part of the ordinary course of business can
be categorized in income account.
_____3. When you add total liabilities from owner’s equity, you can get total assets.
_____6. Total expenses will increase if you will withdraw an asset account.
_____7. When your carabao was impaired, you need to recognize a loss.
_____8. Liability is not an important account, so you need to delete from the list of
accounts even though you are liable to someone.
_____10. If you can easily attract customers, then that is an example of your asset.
35
II. Multiple Choice: Encircle the letter which bears the right answer.
1. It is a component of Statement of Financial Position.
8. A principal from notes receivable that is to be received within one year of the balance
sheet date is reported as?
A. Current Liabilities B. Noncurrent Liabilities
9. Any portion of the notes receivable that is not due within one year of the balance
sheet date is reported as?
A. Current Liabilities B. Noncurrent Assets
36
C. Current Assets D. Liabilities
37
Name: __________________________________________________ Date: _____________
Grade/Section:_____________________________________________________ Score:_____________
Most Essential Learning Competencies: Discuss the five major accounts and prepare
chart of accounts.
I. True/False: Write True if the statement is correct and False if it is not. Write your
answer in the space provided.
_____1. Operating revenues and expenses can be categorized by business function
such as producing, selling, administrative and financing.
_____5. Accounts that are available for recording transactions should be in the chart
of accounts.
_____10. You can use an account title which is NOT reflected in the chart of accounts.
38
II. Identify the following terms as Debit or Credit. Write D for (debit) & C for (credit).
_______________1. Gain on sale of vehicle
_______________2. Interest Revenue
_______________3. Loss on sale of building
_______________4. Office equipment
_______________5. Rent Expense
_______________6. Unearned Income
_______________7. Prepaid Rent
_______________8. Accrued liabilities
_______________9. Withdrawal
_______________10. Capital
III. Formulating the Chart of Accounts: Prepare a chart of accounts based on the given
format.
ABM COMPANY
Chart of Accounts
5 2
Liabilities 3
1 4
2 5
39
3 6
Owner's Equity 7
1 8
2
40
Name: ____________________________________________________Date:_____________
Grade/Section:____________________________________________________Score:____________
Most Essential Learning Competencies: Discuss the five major accounts and prepare
a chart of accounts.
7. In every transaction, there are ________ minimum accounts that can be affected.
41
Test II. Enumerate the following on the space provided.
1-5- Current Assets
1.________________________________
2.________________________________
3.________________________________
4.________________________________
5.________________________________
6.________________________________
7.________________________________
8.________________________________
9.________________________________
10.________________________________
42
III. Setting up of Chart of Accounts
You need to make a chart of accounts based on the given format.
ABM COMPANY
Chart of Accounts
Account
Number Account Title Normal Side Description/ Explanation of Account
Current Assets
1
2
3
Noncurrent Assets
4
5
6
Current Liabilities
1
2
3
Noncurrent Liabilities
4
5
6
Owner's Equity
1
2
3
43
Answer Key
Simple Activities
Test I.
1. Loss 2. Gain 3. Asset 4. Liability
5. Income 6. Expense 7. Equity 8. Accounts
9. Real 10. Nominal
Test II.
1. Nominal 2. Real 3. Liabilities 4. Assets
5. Owner’s Equity 6. Gain 7. Expense 8. Income
9. Account 10. Revenue
Test III.
1. Liability 2. Equity 3. Asset 4. Income 5. Expenses
Answer Key
Moderate Activities
Test I.
1. False 2. True 3. True 4. False 5. True
6. False 7. True 8. False 9. False 10. True
Test II.
1. A 2. C 3. A 4. D 5. D
6. C 7. A 8. C 9.B 10. C
Test III.
1. Income 2. Income 3. Asset 4. Asset 5. Expense
44
Answer Key
Difficult Activities
Test I.
1. True 2. False 3. True 4. False 5. True
6. True 7. False 8. False 9. False 10. False
Test II.
1. Credit 2. Credit 3. Debit 4. Debit 5. Debit
6. Credit 7. Debit 8. Credit 9.Debit 10. Credit
Test III.
Sample Answers
ABM COMPANY
Chart of Accounts
45
Answer Key
EnrichmentActivities
Test I.
1. Chart 2. Account 3. Debit 4. Accumulated Depreciation
5. Contra Account 6. Added 7. Two 8. Deferred Revenue
9. Liability 10. Petty Cash Fund
Test II.
Sample Answers
Current Assets
1. Cash 2. Accounts Receivable 3. Prepaid Expense 4. Inventory 5. Supplies
Noncurrent Assets
6. Vehicles 7. Office Equipment 8. Furniture and Fixtures
9. Land 10. Building
Test III.
Sample Answers
ABM COMPANY
Chart of Accounts
Account Normal
Number Account Title Side Description/ Explanation of Account
Current Assets
Checking account balances, coins, and
1 101 Cash Debit other related to the accounts.
Amounts owed by the customer for
2 102 Accounts Receivable Debit services performed or goods sold.
Goods that have been sold to the
3 103 Merchandise Inventory Debit customers.
Noncurrent Assets
4 104 Building Debit Cost to construct or buy a building.
5 105 Land Debit Cost to buy a land.
6 106 Vehicle Debit Cost to buy vehicle.
Current Liabilities
Amounts owed to other company for
1 201 Accounts Payable Credit services performed or goods sold.
46
Interest that has not yet paid by the
2 202 Interest Payable Credit company.
Salaries that has not yet paid by the
3 203 Salaries Payable Credit company.
Noncurrent Liabilities
4 204 Bonds Payable Credit Company obtain fund by issuing bonds.
Long-term debt that will not fall under
5 205 Long Term Debt Credit bonds and mortgage payables.
Long-term debt of the business with a
6 206 Mortgage Payable Credit certain asset as security to it.
Owner's Equity
1 301 ABM Capital Credit Amount invested by the owner.
2 302 ABM Withdrawals Debit Amount withdrawn by the owner.
Temporary accounts being used at end of
3 303 Income Summary Credit the accounting period.
47
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region I
San Fernando City
La Union
Objectives:
The learners shall be able to:
4. Define and know the use of a journal and a ledger, differentiate general journal from
special journals, differentiate general ledger from subsidiary ledgers and know the
types and use of special journals and subsidiary ledgers.
5. Learners illustrate general and special journal, and illustrate general and subsidiary
ledgers.
6. Learners post entries from general journal to ledger.
Prepared by:
LEONIDES L. GAVINA
Master Teacher I
Name: _____________________________________________________ Date: ___________
Grade/Section: _______________________________________________Score:__________
Most Essential Learning Competency: The learners illustrate the format of general
and special journals, and illustrate the format of general and subsidiary ledgers.
1. Journal used to record all business transactions not recorded in the special
journals.
2. Journalizing all cash paid (including cash purchases).
3. Tracking individual accounts payable balances of company’s creditors.
4. Journalizing all purchases of merchandise on account.
5. Journalizing all sales of merchandise on account.
6. Grouping of all accounts of a company showing its respective outstanding
balances.
7. Tracking individual accounts receivable balances of company’s customers
48
8. Journalizing all cash received (including cash sales).
III. Identify the book of accounts being shown on the left of the table.
2.
3.
4.
49
5.
6.
7.
8.
50
Name: _____________________________________________________ Date: ___________
Grade/Section: _______________________________________________Score: __________
Most Essential Learning Competency: The learners illustrate the format of general
and special journals, and illustrate the format of general and subsidiary ledgers.
Directions: Read the items very carefully and provide what is being asked
for.
51
II. Write “J’ if the statement refers to the use of a journal and “L” if it refers to the
use of a ledger.
1. The manager wants to look at the total revenues of the business.
2. An employee wants to check the purchase of an air conditioning unit.
3. An accountant wants to look at the invoice of a laptop purchased 3 years ago.
4. Ensures that double-entry bookkeeping system is observed when recording
transactions.
5. Assists in tracking the flow of expenses for the year.
6. Provides adequate explanation for each entry.
7. Systematic record of transactions.
8. This is where you can find the supporting evidences for each transaction.
9. Provides information about the results of business operation.
10. Detailed information about the specific assets, liabilities, and owner’s equity of
the business.
Journal Ledger
52
Name: _____________________________________________________Date: ___________
Grade/Section: _______________________________________________Score:__________
Most Essential Learning Competency: The learners illustrate the format of general
and special journals, and illustrate the format of general and subsidiary ledgers.
I. Using a pencil or ballpoint pen draw an example of a general journal and general
ledger.
a. Draw a general journal
53
II. Using Microsoft Excel or any worksheet in your cell phone or computer illustrate a:
1. Sales Journal
2. Purchases Journal
54
III. Post the following transactions to the ledger and prepare the trial balance.
Particulars Debit Credit
Cash 100,000
Ramos, Capital 100,000
To record initial investment of capital
Laptop 42,500
Accounts Payable 42,500
Bought laptop on account
Cash 42,800
Service Revenue 42,800
Cash received for services rendered
55
Name: _____________________________________________________Date: ___________
Grade/Section: ______________________________________________Score: ___________
Most Essential Learning Competency: The learners illustrate the format of general
and special journals, and illustrate the format of general and subsidiary ledgers.
Directions: If you were not able to get a passing score for the first activities,
answer the succeeding activities below.
I. Read the statements below and write the letter of your choice.
56
II. Identify the errors reflected in the Cash Receipts Journal and encircle it with a red
ballpen. Write a short explanation of why it is wrong.
CASH RECEIPTS JOURNAL
III. Post the following transactions to the ledger and prepare the trial balance to check
your work. Write your answers on a ledger.
Particulars Debit Credit
Cash 150,000
XYZ, Capital 150,000
To record initial investment of capital
Cash 50,000
Loan Payable 50,000
Cash loan from the bank
Laptop 33,500
Accounts Payable 33,500
Bought laptop on account
Cash 42,800
Service Revenue 42,800
Cash received for services rendered
57
Cash 3,225
Paid utilities for the month
58
Answer Key:
Simple Activities
Test I.
1. Ledger 4. Ledger
2. Journal 5. Journal
3. Journal 6. Journal
Test II.
1. General Journal
2. Cash Payments Journal
3. Accounts Payable Subsidiary Ledger
4. Purchases Journal
5. Sales Journal
6. General Ledger
7. Accounts Receivable Subsidiary Ledger
8. Cash Receipts Journal
Test III.
1. Accounts Receivable Subsidiary Ledger
2. Purchases Journal
3. General Journal
4. Sales Journal
5. Accounts Payable Subsidiary Ledger
6. Cash Payments Journal
7. Cash Receipts Journal
8. General Ledger
Moderate Activities
Test I.
1. False 6. False
2. False 7. True
3. False 8. True
4. True 9. False
5. False 10. False
Test II.
1. L 6. J
2. J 7. J
3. J 8. J
4. J 9. L
5. L 10. L
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Challenging Activities
Test III.
Cash
Explanation Debit Explanation Credit
Initail investment 100,000 Paid rent 8,000
Services rendered 42,800 Bought office supplies 3,500
Paid A/P laptop 22,500
Paid utilities 4,500
Paid salary 10,000
TOTAL DEBIT 142,800 TOTAL CREDIT 48,500
DEBIT BALANCE 94,300
Office Supplies
Explanation Debit Explanation Credit
Bought office supplies 3,500
TOTAL DEBIT 3,500
DEBIT BALANCE 3,500
Laptop
Explanation Debit Explanation Credit
Bought laptop 42,500
TOTAL DEBIT 42,500
DEBIT BALANCE 42,500
Accounts Payable
Explanation Debit Explanation Credit
Paid A/P laptop 22,500 Bought laptop on account 42,500
TOTAL CREDIT 22,500 TOTAL CREDIT 42,500
CREDIT BALANCE 20,000
Ramos, Capital
Explanation Debit Explanation Credit
Initial investment 100,000
TOTAL CREDIT 100,000
CREDIT BALANCE 100,000
Service Revenue
Explanation Debit Explanation Credit
Services rendered 42,800
TOTAL CREDIT 42,800
CREDIT BALANCE 42,800
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Rent Expense
Explanation Debit Explanation Credit
Paid Rent 8,000
TOTAL DEBIT 8,000
DEBIT BALANCE 8,000
Utilities Expense
Explanation Debit Explanation Credit
Paid utilities 4,500
TOTAL DEBIT 4,500
DEBIT BALANCE 4,500
Salaries Expense
Explanation Debit Explanation Credit
Paid salaries of employees 10,000
TOTAL DEBIT 10,000
DEBIT BALANCE 10,000
TRIAL BALANCE
Explanation Debit Credit
Cash 94,300
Office Supplies 3,500
Laptop 42,500
Accounts Payable 20,000
Ramos, Capital 100,000
Service Revenue 42,800
Rent Expense 8,000
Utilities Expense 4,500
Salaries Expense 10,000
TOTAL 162,800 162,800
Enrichment Activities
Test I.
1. Cash Receipts Journal 6. Cash Receipts Journal
2. Cash Payments Journal 7. Cash Receipts Journal
3. Sales Journal 8. Cash Payments Journal
4. Purchases Journal 9. Cash Payments Journal
5. Cash Payments Journal 10. Cash Receipts Journal
61
Test II.
Test III.
Cash
Explanation Debit Explanation Credit
Initial investment 150,000 Bought office supplies 5,375
Cash proceeds from bank 50,000 Paid A/P laptop 16,750
loan
Services rendered 42,800 Paid utilities 3,225
Paid salary 9,500
TOTAL DEBIT 242,800 TOTAL CREDIT 34,850
DEBIT BALANCE 207,950
Office Supplies
Explanation Debit Explanation Credit
Bought office supplies 5,375
TOTAL DEBIT 5,375
DEBIT BALANCE 5,375
Laptop
Explanation Debit Explanation Credit
Bought laptop 33,500
TOTAL DEBIT 33,500
DEBIT BALANCE 33,500
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Accounts Payable
Explanation Debit Explanation Credit
Paid A/P laptop 16,750 Bought laptop on account 33,500
TOTAL CREDIT 16,750 TOTAL CREDIT 33,500
CREDIT BALANCE 16,750
Loans Payable
Explanation Debit Explanation Credit
Cash loan from bank 50,000
TOTAL CREDIT 50,000
CREDIT BALANCE 50,000
XYZ, Capital
Explanation Debit Explanation Credit
Initial investment 150,000
TOTAL CREDIT 150,000
CREDIT BALANCE 100,000
Service Revenue
Explanation Debit Explanation Credit
Services rendered 42,800
TOTAL CREDIT 42,800
CREDIT BALANCE 42,800
Utilities Expense
Explanation Debit Explanation Credit
Paid Utilities 3,225
TOTAL DEBIT 3,225
DEBIT BALANCE 3,225
Salaries Expense
Explanation Debit Explanation Credit
Paid salaries of employees 9,500
TOTAL DEBIT 9,500
DEBIT BALANCE 9,500
63
TRIAL BALANCE
Explanation Debit Credit
Cash 207,950
Office Supplies 5,375
Laptop 33,500
Accounts Payable 16,750
Loans Payable 50,000
Ramos, Capital 150,000
Service Revenue 42,800
Utilities Expense 3,225
Salaries Expense 9,500
TOTAL 259,550 259,550
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Rubrics
Moderate Activities
Test III.
Descriptors
Criteria 5 3
Concept Each section of the diagram Each section of the diagram contains
Arrangement contains 3 facts easily identified. very few facts that are not easily
identified.
Content Reflects factual information that Contains no factual information and
corresponds with the appropriate does not correspond to the
section of the diagram. appropriate section of the diagram.
Presentation Clean, neat, and well organized Messy and unorganized. Not well
put together.
Challenging Activities
Test I.
Descriptors
Criteria 5 3
Knowledge The drawing represents a clear The drawing is not representative of
illustration of what is being asked what is being asked for.
for and the details are complete.
Neatness The drawing has very minimal The drawing has many erasures and
erasures and the drawing was it was done with haste.
done carefully.
Test II.
Descriptors
Criteria 5 3
Knowledge The student has a clear The student does not know how to
understanding of what needs to use electronic spreadsheet and the
be illustrated using electronic drawing is not representative of
spreadsheet and the illustration what is being asked for.
represents what is being asked
for.
Format/Appearance The elements in the illustration The elements in the illustration are
are organized and pleasing to the generally unorganized and not
eye. pleasing to the eye.
65
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region I
San Fernando City
La Union
Objectives:
The learners shall be able to:
7. Identify the Rules of Debit and Credit.
8. Analyze common business transactions using the Rules of Debit and Credit.
9. Solve exercises analyzing the business transactions.
Prepared by:
LEONIDES L. GAVINA
Master Teacher 1
Name: _____________________________________________________Date: ___________
Grade/Section:_______________________________________________Score:___________
I. Directions: Fill in the blanks. Write your answer in the space provided.
II. Directions: Indicate whether the accounts have a Debit or Credit balance. Put a check
(✓) in the corresponding column.
1. Assets
2. Liabilities
3. Owner’s, Capital
4. Owner’s, Withdrawal
5. Revenues
6. Expenses
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III. Directions: Using the Rules of Debit and Credit analyze the transactions below
and indicate (+) if the account increase, (-) if the account decrease, and (0) if the
account is not affected.
67
Name: _____________________________________________________Date: ___________
Grade/Section:_______________________________________________Score:___________
I. Directions: Analyze the following transactions and apply the Rules of Debit and
Credit. Write your answer in the space provided.
As a graduate of ABM Strand, you decided to open a Beauty Shop business. The
following transactions transpired during the first month of your business operation:
1. You invested ₱20,000 cash in your business.
_____________________________________________________________
2. You paid taxes and licenses, ₱1,500.
_____________________________________________________________
3. Bought furniture and fixtures on credit ₱3,000.
_____________________________________________________________
4. Bought supplies, ₱1,200 on cash.
_____________________________________________________________
5. Paid the account due to creditors.
_____________________________________________________________
6. Received ₱5,000 from various customers for services rendered.
_____________________________________________________________
7. You withdraw ₱2,500 cash for personal use.
_____________________________________________________________
8. Billed a customer for ₱1,500 for services rendered.
_____________________________________________________________
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9. Paid salaries and wages to employees, ₱1,200.
_____________________________________________________________
10. Collected the full amount due from an account customer.
_____________________________________________________________
II. Directions: Analyze the following transactions. Apply the Rules of Debit and
Credit and indicate the specific asset, liability and owner’s equity (__, Capital, __,
Withdrawal, Revenue, Expenses) affected. Example: Debit increase in
Asset-Accounts Receivable, and Credit increase in Owner’s Equity-Repair Revenue.
Write your answer in the space provided.
As a graduate of ABM Strand, you decided to open a Repair Shop business. The
following transactions transpired during the first month of operating your business:
Jan. 2 You invested ₱50,000 in the business of which ₱30,000 was deposited in
the bank.
_________________________________________________________
5 Purchased supplies worth ₱3,000 out of cash on hand.
_________________________________________________________
6 Issued a check for ₱4,000 in payment for furniture acquired.
_________________________________________________________
7 Purchased equipment for ₱8,000 on account.
_________________________________________________________
8 Received ₱6,000 from various customers for services rendered.
_________________________________________________________
9 Received a check from a customer in payment for repair service
rendered, ₱2,500.
_________________________________________________________
10 Deposit ₱8,500 in the bank.
_________________________________________________________
12 Draw a check for ₱5,000 against the business account for a personal use.
_________________________________________________________
15 Paid Taxes and licenses out of cash on hand, ₱800.
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_________________________________________________________
20 Issued check for partial payment to a creditor, ₱4,000.
_________________________________________________________
III. Analyze the following transactions and indicate what specific accounts are
affected under the column Debit and Credit.
As a graduate of ABM Strand, you decided to open a Beauty Shop business. The
following transactions transpired during the first month of operating your business:
TRANSACTION DEBIT CREDIT
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Name:___________________________________________________Date: ______________
I. Directions: Create your own (10) service business transactions on the first month of
operation, and analyze and apply the Rules of Debit and Credit. Write your answer in
the space provided.
You are about to start a business. Create your own (10) service business transactions
on the first month of operation, and analyze by applying the Rules of Debit and Credit.
2.
3.
4.
5.
6.
7.
8.
9.
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10.
II. Create a simple service business transaction based on the effects on the Rules of Debit
and Credit. Write your answer in the space provided.
________________________________________________________________
2. Increase in asset and increase in liability.
________________________________________________________________
3. Decrease in assets and decrease in owner’s equity.
________________________________________________________________
4. Increase in liability and decrease in owner’s equity.
________________________________________________________________
5. Decrease in asset and decrease in liability.
________________________________________________________________
6. Increase in one asset and decrease in another asset.
________________________________________________________________
7. Increase in one liability and decrease in another liability.
________________________________________________________________
8. Decrease in liability and increase in owner’s equity.
________________________________________________________________
9. Increase in asset, increase in liability and increase in owner’s equity.
_________________________________________________________________
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10. Decrease in asset and decrease in owner’s equity.
_________________________________________________________________
III. Using the Rules of Debit and Credit, analyze your business transactions below, and
state the specific account and the corresponding amount involved that should be debited
and credited. Write your answer in the space provided.
Example:
73
Name:____________________________________________________Date: _____________
Grade/Section:______________________________________________Score:____________
Title of the Activity: Analyses and application of the Rules of Debit and Credit.
Most Essential Learning Competency: The learner define accounting; describe the
nature of accounting; narrate the history/origin of accounting; define external users and
give examples; and define internal users and give examples.
I. Directions: Using the Rules of Debit and Credit analyze the transactions below and
indicate (+) if the account increase, (-) if the account decrease, and (0) if the account is
not affected.
74
10. Paid salaries of employees, ₱2,000.
II. Using the Rules of Debit and Credit, analyze your business transactions below, and
state the specific account and the corresponding amount involved that should be debited
and credited. Write your answer in the space provided. Example: Collected the account
due from customers, P5,000. Dr.-Cash P5,000 Cr. - Accounts Receivable P5,000.
1. You invested ₱500,000 in your Photocopying business of which ₱400,000 was
deposited in the bank.
75
III. The following are the effects of your business transactions during the second month of
operating ABM Grocery. Using the Rules of Debit and Credit, analyze what business
transactions transpired.
76
Answer Key:
Simple Activities:
Test I.
1. ASSETS 5. REVENUES
2. LIABILITIES 6. DRAWINGS
3. OWNER’S EQUITY 7. EXPENSES/COSTS
4. INVESTMENTS/CAPITAL
Test II.
1. DEBIT 4. DEBIT
2. CREDIT 5. CREDIT
3. CREDIT 6. DEBIT
Test III.
ASSETS LIABILITIES OWNER’S EQUITY
1. + 0 +
2. - 0 -
3. +- 0 0
4. + + 0
5. + + 0
6. + 0 +
7. - 0 -
8. - - 0
9. - 0 -
10. + 0 +
Moderate Activities
Test I.
1. Increase in assets and increase in Owner’s equity
77
2. Decrease in assets and decrease in owner’s equity
3. Increase in assets and increase in liabilities
4. Increase in assets and decrease in another assets
5. Decrease in assets and decrease in liabilities
6. Increase in assets and increase in owner’s equity
7. Decrease in assets and decrease in owner’s equity
8. Increase in assets and increase in owner’s equity
9. Decrease in assets and decrease in owner’s equity
10. Increasen in assets and decrease in another assets
Test II.
Jan. 2 Increase in assets- Cash on Hand and Cash in Bank and
Increase in owner’s equity - X, Capital
5 Increase in assets - Supplies and Decrease in another assets
6 Decrease in liabilities - Accounts Payable and
Decrease in assets - Cash in Bank
7 Increase in assets - Equipment and
Increase in liabilities- Accounts Payable
8 Increase in assets - Cash on Hand and Increase in owner’s equity
9 Increase in assets - Cash on Hand and
Increase in owner’s equity - Service Revenue
10 Increase in assets - Cash in Bank and
Decrease in another assets- Cash in Bank
12 Decrease in assets - Cash in Bank and
Decrease inowner’s equity - X, Personal
Challenging Activities
Test I.
Learners will be the one to give the answer since there are varied transactions and
the teacher will check their work.
78
Test II.
Learners will be the one to give the answer since there are varied
transactions and the teacher will check their work.
Test III.
1. The owner invested P10,000 in the business.
2. Bought Furniture on account, P2,000.
3. Bought supplies on cash, P500.
4. Received P5,000 for services rendered.
5. Paid wages, P1,200.
6. Paid the account due creditor, P1,000.
7. Withdrew P750 for personal use.
8. Issued promissory note P1,000 to apply on the account due today.
9. Invested additonal P5,000 in the business.
10. Received utility bill, P850.
Enrichment Activities
Test I.
ASSETS LIABILITIES OWNER’S EQUITY
1. + + 0
2. - 0 -
3. + 0 +
4. - 0 -
5. + 0 +
6. - - 0
7. - - 0
8. - 0 -
9. + 0 +
10. - 0 -
79
Test II.
1. Dr. Cash on Hand ₱100,000
Test III.
1. Invested equipment, P15,000 in the business.
2. Bought Furniture on cash, P20,000
3. Bought supplies on account, P500.
4. Collected account due from customer, P5,000.
5. Paid rent, P1,200.
6. Issued promissory note for account due today, P1,000.
7. Withdrew supplies P750 for personal use.
8. Paid P1,000 to creditors.
9. Received P5,000 for services rendered.
10. Paid utilities, P850.
80
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region I
San Fernando City
La Union
Objectives:
The learner shall be able to:
1. Understand the accounting cycle of a service business.
2. Know the account titles used in journalizing entries.
3. Record transactions of a service business in the general journal.
4. Post transactions in the general ledger.
5. Prepare a trial balance.
Prepared by:
LEONIDES L. GAVINA
Master Teacher I
Name: ______________________________________________________Date:___________
Grade/Section: _______________________________________________Score:__________
Directions: Read and follow the directions for each of the activities below.
I. True or False
Direction: Write true if the statement is true and if not, write false.
81
II. Direction: Arrange the following steps or processes in the accounting cycle. Place
the numbers 1 to 10 in the space provided for, 1 being the first step and 10 being the
last step.
1. ______________________________ 2. ________________________________
2. ______________________________ 3. ________________________________
5. ______________________________
82
Name: _____________________________________________________ Date: ___________
Grade/Section: ______________________________________________ Score: __________
___________1. Beth, the accountant of Raine Drug Store paid its water and electric bill for the
month. Under what account would she record the expense?
___________2. Jun bought tables and chairs for his computer shop. Under what asset account
would the tables and chairs be recorded in?
___________3. Lily, an online seller sold items on account. Her customers promised to pay her
after 60 days. In what asset account would she record this?
___________4. JM, the owner of JM’s Bikes paid for the use of space of his bike shop. In what
expense account would this be recorded?
___________5. Cindy bought a laptop for her newly opened accounting office. In what asset
account will this be recorded?
___________6. Pam, the Admin Officer of Napakaganda Namin High School bought coupon
bonds, notebooks, ball pens, pencils and calculators on account. In what
liability account would she record this?
___________7. Bea paid for the store’s monthly telephone bill. In what expense account would
this be recorded in?
83
___________8. Pam, the Admin Officer of Napakaganda Namin High School bought coupon
bonds, notebooks, ball pens, pencils and calculators on account. In what asset
account would she record this?
II. Direction: In each of the transactions below, indicate the account to be debited and the
account to be credited.
Account Account
Transactions Debited Credited
a. The owner invested cash to the business.
b. Borrowed money from a bank and issued a
note.
c. Rendered photocopying service for cash.
d. Received a bill for electricity consumption.
e. Received payment from customers for
services rendered last month.
f. Sent a bill for repairs made today.
g. Bought equipment for cash.
h. The owner withdrew cash for personal use.
i. Paid the rent of office space.
j. Received and paid the monthly telephone
bill.
III. Direction: Name the accounts that are affected by the following transactions.
84
Name: ______________________________________________________Date: __________
Grade/Section: _______________________________________________Score:__________
Directions: Prepare the journal entries, post the journal entries using
t-accounts, and prepare the trial balance.
I. Prepare the journal entries for the transactions below. Write your answers in a
Journal. The Chart of Accounts of Mapangarap Accounting Firm is as follows:
Dec 1 - May Mapangarap invested ₱150,000 cash into her newly formed
accounting firm.
Dec 2 – Purchased ₱5,000 worth of office supplies on account.
Dec 4 – Paid ₱10,000 office rent.
Dec 7 – Paid ₱3,500 for business permit and other licenses.
Dec 10 – Received ₱9,500 cash for services rendered.
Dec 18 – Paid ₱2,500 of the supplies bought on account in Dec 2.
Dec 21 – Billed several clients, ₱25,400 for services rendered.
Dec 26 – Withdrew ₱3,000 cash for the owner’s personal use.
Dec 27 – Received cash, ₱12,450 from customers on account.
Dec 28 – Received utility bill for the month, ₱2,650.
Dec 30 – Paid salary of office clerk, ₱13,000.
85
II. Post the entries to t-accounts.
86
III. Prepare the Trial Balance
87
Name:______________________________________________________Date:___________
Grade/Section: _______________________________________________Score:__________
Directions: Prepare the journal entries, post the journal entries using
t-accounts, and prepare the trial balance.
I. Prepare the journal entries for the transactions below. Write your answers in a
journal. The Chart of Accounts of Albularyo Clinic is as follows:
Aug 28 - Received and paid bill for electricity and water - ₱4,200.
Aug 30 - Paid salary of his secretary, ₱10,000.
Aug 31 - Recorded professional fees for cash amounting to ₱35,000
88
II. Post the entries to t-accounts.
89
III. Prepare the trial balance.
90
Answer Key:
Simple Activities
Test I.
1. False 6. True
2. False 7. False
3. True 8. False
4. True 9. False
5. True 10. True
Test II.
3
6
9
2
1
4
10
8
5
7
Test III.
1. Credit account
2. Reference (for posting reference)
3. Debit amount
4. Date of the transaction
5. Explanation
Moderate Activities
Test I.
1. Utility Expense 5. Office Equipment
2. Furnitures and Fixtures 6. Accounts Payable
3. Accounts Receivable 7. Communication Expense
4. Rent Expense 8. Office Supplies
91
Test II.
Account Account
Transactions Debited Credited
a. The owner invested cash to the business. Cash Capital
b. Borrowed money from a bank and issued a Cash Notes Payable
note.
c. Rendered photocopying service for cash. Cash Service
Revenue
d. Received a bill for electricity consumption. Utility Expense Accounts
Payable
e. Received payment from customers for Cash Accounts
services rendered last month. Receivable
f. Sent a bill for repairs made today. Accounts Service
Receivable Revenue
g. Bought equipment for cash. Equipment Cash
h. The owner withdrew cash for personal use. Drawing Cash
i. Paid the rent of office space. Rent Expense Cash
j. Received and paid the monthly telephone Communication Cash
bill. Expense
Test III.
92
Challenging Activities
Test I.
Date Particulars Ref Debit Credit
Dec 1 Cash 150,000
Mapangarap, Capital 150,000
Initial investment
93
Cash 13,000
Paid salary of clerk
Test II.
Test III.
TRIAL BALANCE
Account Title Debit Credit
Cash 139,950
Accounts Receivable 12,950
Office Supplies 5,000
Accounts Payable 5,150
Mapangarap, Capital 150,000
Mapangarap, Drawing 3,000
Service Revenue 34,900
Rent Expense 10,000
94
Permits and Licenses Expense 3,500
Utility Expense 2,650
Salary Expense 13,000
TOTAL 190,050 190,050
Enrichment Activities
Test I.
Date Particulars Ref Debit Credit
Aug 1 Cash 160,000
Albularyo, Capital 160,000
Initial investment
95
Aug 30 Salary Expense 10,000
Cash 10,000
Paid salary of secretary
Test III.
TRIAL BALANCE
Explanation Debit Credit
Cash 25,300
Clinic Supplies 15,500
Medical Equipment 160,000
Furnitues and Fixtures 45,000
Notes Payable 60,000
Albularyo, Capital 160,000
Albularyo, Drawing 5,500
Professional Fees 55,500
Rent Expense 10,000
Utility Expense 4,200
Salaries Expense 10,000
TOTAL 275,500 275,500
96
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region I
San Fernando City
La Union
Objectives:
The learners shall be able to:
Prepared by:
LEONIDES L. GAVINA
Master Teacher 1
Name: _____________________________________________________Date:____________
Grade/Section:_______________________________________________________Score:____________
Most Essential Learning Competencies: Prepare adjusting entries and complete the
accounting cycle.
I. Increase/Decrease
Analyze the statement given then choose if the effect on account will Increase or
Decrease it. Afterwards, write your answer before the number.
_______________1. Interest revenue that is entered in the credit side.
_______________2. Prepaid expense that is entered in the debit side.
_______________3. Interest payable that is entered in the debit side.
_______________4. Salaries expense that is entered in the credit side.
_______________5. Prepaid rent that is entered in the credit side.
_______________6. Unearned revenue that is entered in the debit side.
_______________7. Deferred revenue that is entered in the debit side.
_______________8. Interest expense that is entered in the credit side.
_______________9. Accrued liability that is entered in the debit side.
_______________10. Accumulated depreciation that is entered in the credit side.
97
II. Debit/Credit
Choose between the two choices (Debit or Credit). Then, write your answer before
the number.
_______________1. Prepaid Expense
_______________2. Prepaid Rent
_______________3. Deferred Revenue
_______________4. Accrued Liabilities
_______________5. Accumulated Depreciation
_______________6. Allowance for Doubtful Accounts
_______________7. Doubtful Accounts Expense
_______________8. Rent Income
_______________9. Unearned Revenue
_______________10. Supplies
Prepaid
Expenses
Asset
Method 1 2
Expense
Method 3 4
Depreciation 5 6
Unearned
Revenues
Liablity
Method 7 8
Income
Method 9 10
98
Name: ______________________________________________________Date: __________
Grade/Section:______________________________________________________Score:__________
Most Essential Learning Competencies: Prepare adjusting entries and complete the
accounting cycle.
I. Temporary or Permanent
Direction: Identify if the account is temporary or permanent. Please write your
answer after the account title.
1. Unearned Income - ____________________
2. Sales -____________________
3. Prepaid Expense -____________________
4. Rent Expense -____________________
5. Service Revenue -____________________
6. Income Summary -____________________
7. Salaries Payable -____________________
8. Utilities Expense -____________________
9. Tax Payable -____________________
10. Cash -____________________
99
II. Matching Type
Direction: Your answer for each account title in Set B will be selected from Set A.
Write your answer from the space provided.
SET A. Choices
_______________2. Vehicles
_______________3. Building
_______________5. Sales
100
Name: ______________________________________________________Date: __________
Grade/Section:_________________________________________________________Score:__________
Most Essential Learning Competencies: Prepare adjusting entries and complete the
accounting cycle.
K to 12 BEC CG: ABM_FABM11-IVa-d-33 and ABM_FABM11-IVa-d-34)
ABM Company
Trial Balance
20XX
101
102
II. Prepare Income Statement, Statement of Changes in Equity, and Balance Sheet
Direction: Prepare Income Statement, Statement of Changes in Equity, and Balance
Sheet based on the Trial Balance you make in Test I. You can write your answer
from the space provided. Take note that the perfect score is 20 points per statement
with corresponding one point deduction in every incorrect answer.
103
104
III. Post-Closing Trial Balance
Direction: Prepare Post-Closing Trial Balance based on your answer from Test
II.You can write your answer from the space provided. Take note that the perfect
score is 20 points with corresponding one point deduction in every incorrect answer.
105
Name: ______________________________________________________Date: __________
Grade/Section:_______________________________________________________Score:_________
Most Essential Learning Competencies: Prepare adjusting entries and complete the
accounting cycle
3. When a lessor paid an advance payment to a lessee for two years rent and records this
using the expense method, what should be the credited account at year end (first
year)?
A. Debit cash
B. Debit an expense account
106
C. Debit a liability account
D. Credit an expense account
4. When a business makes an adjusting entry at year-end with a debit to supplies, the
usual credit entry is made to:
A. Accounts receivable
B. Cash
C. Supplies expense
D. Income summary
8. It is the exact opposite of a related adjusting entry made at the end of accounting
period?
A. Correcting Entry
B. Closing Entry
C. Initial Entry
D. Reversing Entry
107
9. Aside from accruals, which of the following can be reversed?
A. Deferrals initially recorded in the income statement (income or expense)
B. All deferrals
C. Accounts that have been closed
D. All temporary accounts
10. Reversing entry should be made for any adjusting entry that?
A. Increased an asset account only
B. All temporary accounts
C. Increased a liability account only
D. Increased an asset or a liability account
1. ABM company purchased 800,000 in supplies this year. Supplies account increased
by ₱200,000 during the year. ₱160,000 remained at year-end. What was supplies
expense for ABM company during the year?
A. ₱300,000
B. ₱760,000
C. ₱200,000
D. ₱840,000
2. On December 31, 20XX, the recorded ending accounts receivable of ABM company
was ₱150,000 with an estimated of ₱36,000 receivables which will not be collected.
Accounts receivable in the 2019 Statement of Financial Position will be valued at:
A. ₱114,000
B. ₱186,000
C. ₱150,000
D. ₱36,000
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3. ABM company reported supplies of ₱500,000 this year. In which ₱336,000 of
supplies was used. At year-end the remaining supplies is ₱400,000. What was the cost
of supplies purchased during the year?
A. ₱236,000
B. ₱164,000
C. ₱400,000
D. ₱0
5. On March 1, 20XX, ABM company sold 300 one-year subscriptions for ₱15 each.
The total amount received was credited to subscriptions revenue. How much should be
recorded as liability?
A. ₱750
B. ₱4,500
C. ₱3,750
D. ₱0
1. On January 1, 20XX, the supplies account had a balance of ₱48,000. During the year,
ABM Company purchased ₱158,000 of supplies. At end of the year, supplies inventory
showed an amount of ₱50,000.
109
2. Computer equipment costing ₱35,000 has a useful life of three years with a salvage
value of ₱1,000 at the end of its life. Record the depreciation for one year.
4. The company preferred to pay its rent for two years in the amount of ₱200,000. This
transaction was happened last April 1, 20XX. Record the adjusting entry of rent
expense.
5. Due to COVID 2019, ABM company did not yet pay the December 16-31, 20XX
salaries of its employees amounting to ₱50,000 because no one wants to go and work in
office. How do you record this obligation?
110
Answer Key
Simple Activities
Test I.
1. Increase 2. Increase 3. Decrease 4. Decrease 5. Decrease
6. Decrease 7. Decrease 8. Decrease 9. Decrease 10. Increase
Test II.
1. Debit 2. Debit 3. Credit 4. Credit 5. Credit
6. Credit 7. Debit 8. Credit 9. Credit 10. Debit
Test III.
Deferrals:
Prepaid Expenses
Unearned Revenues
Answer Key
Moderate Activities
Test I.
1. Permanent 2.Temporary 3. Permanent
4. Temporary 5. Temporary 6.Temporary
7. Permanent 8. Temporary 9.Permanent 10. Permanent
111
Test II.
1. Balance Sheet Account 2. Balance Sheet Account
3. Balance Sheet Account 4. Balance Sheet Account
5. Income Statement Account 6. Income Statement Account
7. Balance Sheet Account 8. Balance Sheet Account
9. Income Statement Account 10. Balance Sheet Account
Test III.
Answer Key
Difficult Activities
Test I.
ABM Company
Trial Balance
20XX
112
Service Revenue 300,000.00
Test II.
ABM Company
Income Statement
20XX
ABM Company
Statement of Changes in Equity
20XX
Capital,
Beginning ₱ 270,000
Net Income 135,000
Less: Withdrawals 5,000
Capital, Ending ₱ 500,000
ABM Company
Balance Sheet
20XX
Cash ₱ 100,000.00
Accounts Receivable 60,000.00
Inventory 50,000.00
Property, Plant and Equipment ₱ 120,000.00
Less: Accumulated Depreciation 10,000.00 110,000.00
Land 200,000.00
113
Total Assets ₱ 520,000.00
Test III.
ABM Company
Post-Closing Trial Balance
20XX
Answer Key
EnrichmentActivities
Test I.
1. B 2. C 3. D 4. C 5. A
6. D 7. C 8.D 9. A 10.D
Test II.
1. D 2. A 3. A 4. B 5. A
114
Test III.
1. Supplies Expense ₱156,000
Supplies ₱156,000
115
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region I
San Fernando City
La Union
Objectives:
The learner shall be able to:
1. Describe the nature of transactions in a merchandising business.
2. Record transactions of a merchandising business in the general and special journals.
3. Posts transactions in the general ledger and subsidiary ledgers.
4. Prepares trial balance.
5. Prepares adjusting entries.
6. Completes the accounting cycle of a merchandising business.
7. Prepares the Statement of Cost of Goods Sold and Gross Profit.
Prepared by:
LEONIDES L. GAVINA
Master Teacher 1
Name: __________________________________________________ Date: _____________
Grade/Section:____________________________________________ Score:_____________
II. Directions: Determine whether General Journal, Sales Journal, Purchases Journal,
Cash Receipts Journal, Cash Payment Journal will be used in recording the transactions.
Write your answer in the blank/space provided.
Consider the following transactions in your business:
1. You invested ₱100,000 cash and equipment which cost ₱25,000 in the
business.
_____________________________________________________________
2. Purchased furniture on cash for ₱5,000.
_____________________________________________________________
3. Purchased supplies on cash for ₱2,500.
_____________________________________________________________
4. Purchased merchandise from ABC Merchandising for ₱20,000. Terms:2/10,
n/30.
_____________________________________________________________
5. Purchased merchandise on cash for ₱12,000.
_____________________________________________________________
6. Paid the freight on merchandise bought above for ₱500.
_____________________________________________________________
7. Sold merchandise to various cash customers for ₱10,000.
_____________________________________________________________
8. Sold merchandise to Mr. Perez for ₱8,000. Terms:2/10, n/30.
_____________________________________________________________
9. Paid the freight on merchandise sold above for ₱200.
_____________________________________________________________
117
12. Sold supplies to a neighborhood office for ₱250.
_____________________________________________________________
13. Collected the account due from customers.
_____________________________________________________________
14. Received defective merchandise from customers for ₱1,000.
_____________________________________________________________
15. Received Utility bills for ₱3,500.
_____________________________________________________________
III. Directions: Journalize the transactions in the General Journal, and Special Journals:
Sales Journal, Purchases Journal, Cash Receipts Journal, Cash Payment Journal; and posts
in the General Ledger and Subsidiary Ledgers. Write your answers in a separate needed
answer sheet.
You decided to open a Mini Grocery in your barangay. The following are the
transactions in December of the current year:
1 You invested ₱100,000 cash and equipment for ₱25,000 in the business.
8 Purchased merchandise from ABC Merchandising for ₱20,000. Terms: 2/10, n/30.
18 Paid within the discount period the account due to ABC Merchandising.
118
26 Collected within the discount period the account due from Mr. Perez.
IV. Step #2. Journal entries using (a) Periodic system and (b) Perpetual system.
The following selected transactions took place in the second month of the
current year of operating your ABM Mini Grocery:
Feb 1 Purchased goods for ₱10,000 on cash.
2 Purchased equipment on credit, ₱6,000.
3 Sold goods to various cash customers, ₱5,000.
4 Sold goods to various customers for ₱10,000. Terms:2/10, n/30.
5 Paid the freight on goods sold above, ₱400.
6 Purchased goods for ₱15,000. Terms:2/10,1/15,n/30.
7 Paid the freight on merchandise purchased for ₱500.
8 Received defective goods from cash customers for ₱800.
9 Collected the accounts due from customers.
10 Returned ₱1,200 defective goods purchased on February 1.
119
Name: ____________________________________________________ Date:__________
Grade/Section:_______________________________________________ Score:__________
Title of the Activity: Time to prepare on your own Step 4-6 of the accounting cycle of
a merchandising business.
Most Essential Learning Competency: The learners prepare trial balance, prepare
adjusting entries and completing the accounting cycle for merchandising business.
K to 12 BEC CG: ABM_FABM11-IVe-j-38, 39, 40
120
Wages Expense ₱4,000
Freight out ₱2,000
TOTAL ₱230,200 ₱230,200
II. Step #5 - Preparation of adjusting entries and post to the general ledger.
Directions: Prepare Adjusting Entries. Record in the 2-column journal.
This activity is the continuation of the Trial Balance in Activity #1. Additional data
for adjustment:
1. Unused supplies, ₱1,500.
2. Unpaid utilities, ₱2,000.
3. Provide for 10% Annual depreciation for Equipment and 10% Annual
depreciation for Furniture.
4. Estimated uncollectible accounts is 2% of Outstanding Accounts Receivable.
5. Physical count shows merchandise inventory on hand amounts to ₱16,000.
ACCOUNTS DR CR DR CR DR CR
Cash
Accounts Receivable
Merchandise Inventory
Supplies
121
Equipment
Accumulated Depreciation –
Equipment
Furniture
AB Mahusay, Capital
Sales
Sales Discount
Purchase Discount
Wages Expense
Freight out
Supplies Expense
Utilities Expense
Depreciation Expense
Bad Debts
Income Summary
TOTAL
122
Name: ______________________________________________________Date: __________
Grade/Section:_______________________________________________ Score:__________
ACCOUNTS DR CR
Cash
Accounts Receivable
Merchandise Inventory
Supplies
Equipment
Furniture
AB Mahusay, Capital
123
Sales
Sales Discount
Purchases
Purchase Discount
Freight in
Wages Expense
Freight out
Supplies Expense
Utilities Expense
Depreciation Expense
Bad Debts
Income Summary
TOTAL
II. Step #8. Prepare Closing entries and post to the general ledger.
Directions: Based on Activity #1 above, prepare Closing Entries and post to the
general ledger. Write your answer in a 2-column journal and continue posting in
the general ledger.
124
III. Step #9 - Prepare a Post-Closing Trial Balance; and Step #10 -Prepare
reversing entries and post to general ledger.
Directions: Based on Activity #I and Activity #II above, prepare Post-Closing
Trial Balance and prepare reversing entries and continue posting to the general
ledger. Use 2-column journal.
125
Name: ____________________________________________________ Date: ___________
Grade/Section:________________________________________________ Score:_________
126
20 Paid the freight on goods bought, ₱100.
25 Paid wages of employees, ₱750.
127
II. Prepare Trial Balance, adjusting entries and post to general ledger, and
Adjusted Trial Balance.
Directions: Based on the General Ledger in Activity I above, prepare Trial
Balance, adjusting entries, and Adjusted Trial Balance. Write your answers in a
2-column journal.
Additional data for adjustments:
1. Utilities not yet paid, ₱700.
2. Supplies used up, ₱300.
3. Doubtful of collection, ₱200.
4. Depreciation to be provided for Equipment - ₱200 while Furniture - ₱80.
5. Inventory on hand, ₱6,000.
128
III. Prepare Financial Statements; closing entries and post to the general ledger;
Post-Closing Trial Balance; and Reversing Entry.
Directions: Based on the Adjusted Trial Balance in Activity #II, prepare Financial
Statements: Income Statement, Statement of Owner’s Equity, and Balance Sheet; closing
entries, Post-Closing Trial Balance and Reversing Entry. Write your answers in a separate
sheets for the preparation of financial statements preparation and Post Closing Trial
Balance and use 2-column journals for the entries.
129
Answer Key:
Simple Activities
Test I.
1. Merchandising Business 6. Purchase Returns
2. Sales 7. Freight in
3. Purchases 8. Sales Returns
4. Sales discount 9. Purchase Discount
5. Freight out 10. Merchandise Inventory
Test II.
1. Cash Receipts Journal and General Journal 11. Cash Payment Journal
2. Cash Payment Journal 12. Cash Receipts Journal
3. Cash Payment Journal 13. Cash Receipts Journal
4. Purchases Journal 14. General Journal
5. Cash Payment Journal 15. General Journal
6. Cash Payment Journal
7. Cash Receipts Journal
8. Sales Journal
9. Cash Payment Journal
10. Cash Payment Journal
Test III.
SALES JOURNAL
Date Invoice Account Debited Post Ref. Accounts Rec.Dr./Sales Cr.
December 16 Mr. Perez 8,000
December 20 Mr. Abad 12,000
20,000
PURCHASES JOURNAL
Credit Debit
Date R.R.No. Account Credited PR Accounts Payable Purchases
December 8 ABC Merchandising 20,000 20,000
20,000 20,000
130
Cash Receipts Journal
Credit Debit
Date Ck. Description Cash Purch A/P Purch- Account PR Amount
No. Disc. ases Title
Dec 4 Purchased 5,000 Furniture 5,000
Furniture and and
Fixtures Fixtures
Dec 6 Purchased Supplies 2,500 Supplies 2,500
131
GENERAL LEDGER
76,040.00
1,000.00 10,000.00
11,000.00
2,000.00 125,000.00
2,000.00
125,000.00
132
Sales Returns and Allowances Equipment
1,000.00 25,000.00
1,000.00 25,000.00
GENERAL LEDGER
Accounts Payable Purchases
20,000.00 20,000.00 20,000
0.00 12,000
32,000
Purchases Discount Salaries and Wages
400.00 4,000
Furniture and
Supplies Fixtures
2,500 5,000
Mr. Abad
12/20 12,000.00 1,000.00
133
Moderate Activities
Test I. Step #4.
AB Mahusay Mini Grocery
Trial Balance
December 31, 20XX
ACCOUNT DEBIT CREDIT
Cash ₱76,040
Accounts Receivable ₱11,000
Supplies ₱2,500
Equipment ₱25,000
Furniture ₱5,000
Accounts Payable ₱0
AB Mahusay, Capital ₱125,000
Sales ₱30,000
Sales Discount ₱160
Sales Returns and Allowances ₱1,000
Purchases ₱32,000
Purchase Discount ₱400
Purchase Returns and Allowances ₱2,000
Freight in ₱500
Wages Expense ₱4,000
Freight out ₱200
TOTAL ₱157,400 ₱157,400
Test II. Step #5. Prepare Adjusting entries and post to the general ledger.
134
Depreciation Expense 250
Accumulated Depreciation-Equipment 208
Accumulated Depreciation-Furniture 42
Cash ₱76,040
Supplies ₱1,500
Equipment ₱25,000
Furniture ₱5,000
Sales ₱30,000
135
Sales Discount ₱160
Purchases ₱32,000
Freight in ₱500
136
Challenging Activities
Test I. Step #7.
ABM Mini Grocery
Income Statement
For the Month Ended December 31, 20XX
Sales ₱30,000
Less: Sales discount ₱ 160
Sales Returns and Allowances 1,000 1,160
Net Sales ₱28,840
Less: Cost of Sales:
Purchases ₱32,000
Less: Purchase discount ₱ 400
Purchase Returns and allowances 2,000 2,400
Net purchases ₱29,600
Add: Freight in 500
Total Goods available for sale ₱30,100
Less: Merchandise Inventory, End 16,000 14,100
Gross Profit ₱14,740
Less: Operating Expenses:
Wages expense ₱ 4,000
Freight out 200
Supplies expense 1,000
Utilities expense 2,000
Depreciation expense 250
Bad debts expense 220 7,670
Net Income ₱ 7,070
137
ABM Mini Grocery
Statement of Owner’s Equity
For the Month Ended December 31, 20XX
I. Step #8. Prepare Closing Entries and post to the general ledger.
Dec. 31 Sales ₱30,000
Purchase discount 400
Purchase Returns and Allowances 2,000
Income Summary ₱32,400
138
Income Summary 41,330
Sales discount 160
Sales Returns and Allowances 1,000
Purchases 32,000
Freight in 500
Wages expense 4,000
Freight out 200
Supplies expense 1,000
Utilities expense 2,000
Depreciation expense 250
Bad debts expense 220
Cash ₱76,040
Supplies ₱1,500
Equipment ₱25,000
139
Furniture ₱5,000
Step #10. Prepare Reversing Entry and post to the general ledger.
202_
January 1 Accrued Utilities expense ₱ 2,000
Utilities expense ₱ 2,000
Enrichment Activities
Test I.
SALES JOURNAL
Accounts Rec.Dr./Sales
Date Invoice Account Debited Post Ref. Cr.
December 06 Mr. Perez 4,000
4,000
PURCHASES JOURNAL
Credit Debit
Date R.R.No. Account Credited PR Accounts Payable Purchases
December 6 Magic Grocery 5,000 5,000
December 7 Puregold Grocery 7,000 7,000
12,000 12,000
140
GENERAL JOURNAL
141
Accounts Accounts
Receivable Payable
Subsidiary Subsidiary
Ledger Ledger
Santos
Sari-Sari Store Magic Grocery
12/5 10,000.00 7,000.00 7,000.00 12/05
10,000.00 5,000.00
Perez Sari-Sari
Store 7,000.00 12,000.00
12/06 4,000.00 4,000.00 5,000.00
4,000.00 Puregold Grocery
1,000.00 7,000.00
1,000.00 7,000.00
6,000.00
Test II.
ABM Mini-Mart
Trial Balance
December 31, 20XX
Debit Credit
Cash ₱ 29,070
Accounts Receivable 10,000
Supplies 1,000
Equipment 12,000
Furniture 4,000
Accounts Payable ₱ 11,000
______, Capital 50,000
______, Drawing 5,000
Sales 12,000
Sales discount 80
Purchases 12,000
142
Purchase returns and allowances 1,000
Freight in 100
Wages expense 750
Total ₱ 74,000 ₱ 74,000
Adjusting entries:
Dec 31 Utilities expense ₱700
Utilities payable ₱700
143
ABM Mini-Mart
Adjusted Trial Balance
December 31, 20XX
Debit Credit
Cash ₱ 29,070
Accounts Receivable 10,000
Allowance for Bad Debts ₱ 200
Merchandise Inventory 6,000
Supplies 1,000
Equipment 12,000
Accumulated depreciation- Equipment 200
Furniture 4,000
Accumulated depreciation- Furniture 80
144
Income Summary 6,000
Test III.
ABM Mini-Mart
Income Statement
For the month ended December 31, 20XX
Sales ₱12,000
Sales discount 80
Net Sales ₱11,920
Less: Cost of Sales:
Purchases ₱12,000
Less: Purchase returns and allowances 1,000
Net Purchases ₱11,000
Add: Freight in 100
Total goods available for sale ₱11,100
Less: Merchandise Inventory 6,000 5,100
Gross Profit ₱ 6,820
Less: Operating Expenses:
Wages expense ₱ 750
Utilities expense 700
Supplies expense 300
Bad debts expense 200
Depreciation expense 280 2,230
Net Income ₱ 4,590
145
ABM Mini-Mart
Statement of Owner’s Equity
For the month ended December 31, 20XX
ABM Mini-Mart
Balance Sheet
As of December 31, 20XX
146
Closing entries:
147
ABM Mini-Mart
Post-Closing Trial Balance
December 31, 20XX
Debit Credit
Cash ₱ 29,070
Accounts Receivable 10,000
Allowance for Bad Debts ₱ 200
Merchandise Inventory 6,000
Supplies 700
Equipment 12,000
Accumulated depreciation- Equipment 200
Furniture 4,000
Accumulated depreciation- Furniture 80
Reversing entry:
January 1 Utilities Payable ₱700
Utilities Expense ₱700
148
References:
1. Books
Florendo, Joselito G. 2016. Fundamentals of Accountancy, Business and Management 1.
Sampaloc, Manila: Rex Book Store, Inc.
Reyes, Carlito V. 2005. Basic Accounting Principles and Applications. Tondo, Manila: R
& S Publishing.
Tugas, Florenz C., et al. 2016. Fundamentals of Accountancy, Business and Management
1. Araneta Avenue, Quezon City: Vibal Group, Inc.
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