Competency Based Learning Material

Sector : Health, Social and Other Community Development

Qualification Title:

Services
Bookkeeping NCIII

Unit of Competency : Journalize Transactions

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Module Title

Journalizing Transactions for Single

Proprietorship
BOOKKEEPING
Health, Social and Other Community Development Services SECTOR

NATIONAL CERTIFICATE LEVEL III

QUALIFICATION LEVEL

COMPETENCY-BASED LEARNING MATERIALS

No.
Unit of Competency
1.
Journalize Transactions

Journalizing Transactions for

Single Proprietorship

2.

Post Transactions

Posting Transactions

HSC412302

3.

Prepare Trial Balance

Preparing Trial Balance

HCS412303

4.

Prepare Financial Reports

Preparing Financial Reports for

Single Proprietorship

HCS412304

5.

Review Internal Control System

Reviewing Internal Control

System

HCS412305

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Code
HCS412301

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HOW TO USE THIS COMPETENCY- BASED LEARNING

MATERIAL
Welcome!
The unit of competency, "Journalize Transactions", is one of the competencies of
BOOKKEEPING NCIII, a course which comprises the knowledge, skills and attitudes
required for a certified bookkeeper to possess.
The module, Journalizing Transactions, contains training materials and activities
related to journalizing transactions of a single-proprietorship.
In this module, you are required to go through a series of learning activities in order
to complete each learning outcome. In each learning outcome are Information
Sheets, Self-Checks, Work Sheets and Task Sheets. Follow and perform the
activities on your own. If you have questions, do not hesitate to ask for assistance
from your trainer.

Remember to:
Work through all the information and complete the activities in each section.
Read information sheets and complete the self-check. Suggested references are
included to supplement the materials provided in this module.
Most probably, your trainer will also be your supervisor or manager. He is there to
support you and show you the correct way to do things.
You will be given plenty of opportunities to ask questions and practice on the job.
Make sure you practice your new skills during regular work shifts. This way, you will
improve your speed, memory and your confidence.

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 Use the Self-Checks, Work Sheets or Task Sheets at the end of each section to test
your own progress. Use the Performance Criteria Checklist or Procedural Checklist
located after the sheet to check your own performance.
When you feel confident that you have had sufficient practice, ask your Trainer to
evaluate you. The results of your assessment will be recorded in your Progress Chart
and Accomplishment Chart.
You need to complete this module before you can perform the next module, Post
Transactions.

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QUALIFICATION

BOOKKEEPING NC II

UNIT OF COMPETENCY :

JOURNALIZE TRANSACTIONS

MODULE

JOURNALIZING TRANSACTIONS FOR SINGLE

PROPRIETORSHIP

INTRODUCTION

This module covers the knowledge, skills, and attitudes in

preparing chart of accounts, analyze documents and preparing
journal entries for Single Proprietorship

LEARNING OUTCOMES:
At the end of this module you will be able to:
1. Prepare chart of accounts
2. Analyze documents
3. Prepare journal entry
ASSESSMENT CRITERIA:
1. List of asset, liability, equity, income, and expense account titles are prepared in
accordance with Generally Accepted Accounting Principles.
2. Chart of Accounts is coded according to industry practice.
3. Documents are gathered, checked and verified in accordance with verification and
validation processes.
4. Account titles are selected in accordance with standard selection processes.
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5. Journal entries are prepared in accordance with generally accepted accounting

principles.
6. Debit and credit account titles are determined in accordance with chart of accounts.
7. Explanation to journal entry is prepared in accordance with the nature of transaction.

QUALIFICATION

BOOKKEEPING NC II

UNIT OF COMPETENCY :

JOURNALIZE TRANSACTIONS

MODULE

JOURNALIZING TRANSACTIONS FOR SINGLE

PROPRIETORSHIP

LEARNING OUTCOME #1 :

PREPARE CHART OF ACCOUNTS

ASSESSMENT CRITERIA:
1. List of asset, liability, equity, income, and expense account titles are prepared in
accordance with Generally Accepted Accounting Principles.
2. Chart of Accounts is coded according to industry practice.

RESOURCES:

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The students/trainees must be provided with the following:

Calculator
Paper
Learning Materials
Pencil
Eraser

REFERENCES:
1. ACCOUNTING PRINCIPLES 1 by Arganda/Cardenas-Atis/Del Rosario, Jr.
2. BASIC ACCOUNTING PRINCIPLES AND APPLICATIONS by Carlito V. Reyes
3. BASIC ACCOUNTING MADE EASY by Win Ballada

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Learning Outcome #1: Prepare chart of accounts

SPECIAL INSTRUCTIONS

LEARNING ACTIVITIES
1. Read Information Sheet 1.1-1

Read and understand the information

sheet.

2. Answer Self-Check for 1.1-1 and 1.1-2

Compare answers with the answer key.

You are required to get all answers
correct. If not, read the information
sheets again to answer all questions
correctly.

3. Answer Worksheet 1.1-1

Present your work to your trainer for

evaluation and recording.

After doing all activities of this LO,

you are ready to proceed to the next
LO on analyzing documents.

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INFORMATION SHEET LO1-1

Prepare Chart of Accounts
ACCOUNTING and BOOKKEEPING
There is some confusion over the distinction between Bookkeeping and Accounting. This
partly due to the fact that the two are related.
DEFINITIONS OF ACCOUNTING
Accounting is a service entity. Its function is to provide quantitative information, primarily
financial in nature, about economic entities that is intended to be useful in making economic
decisions.
Accounting is the process of identifying, measuring and communicating economic information
to permit informed judgments and decisions by users of the information.
ACCOUNTING is the art of recording, classifying, summarizing in a significant manner and in
terms of money, transactions and events, which are in part, at least, of financial character and
interpreting the results thereof.
Accounting is an information system that measures, processes and communicates financial
information about an identifiable economic entity.

DEFINITIONS OF BOOKKEEPING
Bookkeeping is a mechanical task involving the collection of basic financial data. The data
are first entered in the accounting records or the books of accounts, and then extracted,
classified and summarized in the form of income statement, balance sheet and cash flows
statement.
BOOKKEEPING is the recording of business data in a prescribed manner.
A bookkeeper may be responsible for keeping all of the records of a business. Much of the
work of the bookkeeper is clerical in nature and is increasingly being accomplished through the
use of mechanical and electronic equipment.
The bookkeeping procedures usually end when the basic data have been entered in the books
of accounts and the accuracy of each entry has been tested. At that stage, the accounting
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function takes over. Bookkeeping is a routine operation, while accounting requires the ability
to examine a problem using both financial and non-financial data.

FOUR PHASES OF ACCOUNTING

Based on the definition, accounting has four phases namely:
summarizing, and interpreting.

recording, classifying,

Recording. This is technically called bookkeeping. Some people confuse bookkeeping and
accounting as one and the same. However, bookkeeping is only a part of accounting the
recording phase. In this phase, business transactions are recorded systematically and
chronologically in the proper accounting books. There are two kinds of bookkeeping: the
single entry bookkeeping and the double entry bookkeeping. Single entry bookkeeping does
not show the two-fold effects of business transactions. It shows only the debit or the credit of
each transaction. The double entry bookkeeping, however, reflects the two-fold effects of
business transactions. It has a debit and a credit.
Classifying. In this phase, items are sorted and grouped. Similar items are classified under
the same name. They may be classified as asset accounts, liability accounts, capital
accounts, revenue accounts and expense accounts. This classification is useful to the needs
of the management.
Summarizing. After each accounting period, data recorded are summarized through financial
statements. These reports are submitted to the management at the end of each accounting
period or as the need arise.
Interpreting. Usually, due to the technicality of accounting reports, the accountants
interpretation on the financial statement is needed. In this case, analysis reports are submitted
together with the financial statements.

BUSINESS AS AN ACCOUNTING ENTITY

In accounting, the business is always assumed to be distinct and separate from its owner or
owners. Which means that the personal properties of the owner are different from the assets
of the business, the liabilities of the business are different from his personal obligations, and
the expenses incurred by the business are also different from his personal expenses? The
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transactions therefore, entered into by the owner in behalf of the business should be recorded
in the books of the firm.

BUSINESS is an organization from the largest and diversified corporation to a small sari-sari
store in the community which engages in generating revenues through the manufacture
and/or sale of goods or rendering services with the goal of earning a profit.

FORMS OF BUSINESS ORGANIZATION

A business assumes one of the three forms of organization.
depend on which form the organization takes.

The accounting procedures

SOLE PROPRIETORSHIP. This business organization has a single owner called the
proprietor who generally is also the manager. Sole proprietorships tend to be small servicetype (e.g. physicians, lawyers and accountants) businesses and retail establishments. The
owner receives all profits, absorbs all losses and is solely responsible for all debts of the
business. From the accounting viewpoint, the sole proprietorship is distinct from its proprietor.
Thus, the accounting records of the sole proprietorship do not include the proprietors personal
financial records.
PARTNERSHIP. A partnership is a business owned and operated by two or more persons
who bind themselves to contribute money, property, or industry to a common fund, with the
intention of dividing the profits among themselves. Each partner is personally liable for any
debt incurred by the partnership. Accounting considers the partnership as a separated
organization, distinct from the personal affairs of each partner.
CORPORATION. A corporation is a business owned by its stockholders. It is an artificial
being created by operation of law, having the rights of succession and the powers, attributes
and properties expressly authorized by law or incident to its existence. The stockholders are
not personally liable for the corporations debts. The corporation is a separate legal entity.
PURPOSE OF BUSINESS ORGANIZATIONS
The forms of business organizations above are classified according to the ownership structure
of the business entity. Entities, however, can also be grouped by the types of goods or
services they offer. Any of these types of activities may be performed by a business
organization be it a sole proprietorship, a partnership or a corporation.
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Service companies perform services for a fee (e.g. law firms, accounting and audit firms,
stock brokerage, beauty salon and recruitment agencies).
Merchandising companies purchased goods that are ready for sale and then sell these to
customers (e.g. car dealers, clothing stores and supermarkets).
Manufacturing companies buy raw materials, convert them into products and then sell the
products to other companies or to final customers (e.g. paper mills, steel mills, car
manufacturers and drug manufacturers).

ACTIVITIES IN BUSINESS ORGANIZATIONS

Many types of decisions are made in business organizations. Accounting provides important
information to make these decisions. The three types of organizational activities are as
follows: financing, investing and operating.
FINANCING ACTIVITIES
Organizations require financial resources to obtain other resources used to produce goods and
services. They complete for these resources in financial markets. Financing activities are the
methods an organization uses to obtain financial resources from financial markets and how it
manages these resources. Primary sources of financing for most businesses are owners and
creditors, such as banks and suppliers. Repaying the creditors and paying a return to the
owners are also financing activities.
INVESTING ACTIVITIES
Managers use capital from financing activities to acquire other resources used in the
transformation process that is, to transform resources from one form to a different from,
which is more valuable, to meet the needs of the people. Having the right mix of resources is
essential to efficient and effective operations.
An efficient business is one that provides goods and services at low costs relative to their
selling price. An effective business is one that is successful in providing goods and services
demanded by the customers.
Investing activities involve the selection and management including disposal and replacement
of long-term resources that will be used to develop, produce, and sell goods and services.
Investing activities include buying land, equipment, buildings and other resources that are
needed in the operation of the business, and selling these resources when they are no longer
needed.
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OPERATING ACTIVITIES
Operating activities involve the use of resources to design, produce, distribute and market
goods and services. Operating activities include research and development, design and
engineering, purchasing, human resources, production, distribution, marketing and selling, and
servicing. Organizations compete in supplier and labor markets for resources used in these
activities. Also, they compete in product markets to sell the goods and services created by
operating activities.

ACCOUNTING ELEMENTS OR VALUES

The basic accounting elements are:
1. Assets;
2. Liabilities; and
3. Owners Equity (or Capital).
ASSETS are property or rights on property owned by the business. In other words, anything
of value owned by the business. Assets can be grouped into current assets and non-current
assets.
1. Current Assets refer to cash and other assets that are easily converted into cash or
consumed during the accounting period usually one year.
2. Non-current Assets are those assets not classified as current. They include, among
others, property, plant and equipment. Property, plant and equipment are tangible
assets used in the operation of the business, have useful life that exceeds beyond one
year, and are not intended for sale. Examples are land, building, equipment, furniture
and fixtures. Other non-current assets are long-term investment and intangible assets.

LIABILITIES are debts of the business. These are obligations owed by the business. The
entity or person to whom the debt is owed is called a creditor. There are two classifications of
liabilities: current or short-term liabilities and long-term liabilities.
1. Current or short-term Liabilities are obligations or debts of the business which will be
paid during the accounting period by means of payment of current assets or a creation
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of another current liability. Included here are accounts payable, notes payable, accrued
expenses and unearned income.
2. Long-term Liabilities are obligations or debts of the business that will be due and
payable beyond one year. Examples are mortgage payable and notes payable due
beyond one year.
OWNERS EQUITY is a term that refers to the vested interest of the owner in the business.
The difference between the assets and the liabilities of the business is called owners equity or
owners capital.
The owners equity is partly contributed and partly earned. The initial investment of the
owner will be increased by the profit earned by the business.

THE ACCOUNTING EQUATION

The assets, liabilities and owners equity are always expressed in an equation:
Assets = Liabilities + Owners Equity
Notice that the liabilities have preferential claims over the assets; hence, it is placed
before the owners equity in the accounting equation.
The two sides of the equation must always be equal because the assets are claimable
by someone. If there are no liabilities, then all the assets are claimable by the owner, and the
accounting equation is simply:
Assets = Owner Equity
The accounting equation could be stated another way to emphasize the residual interest
of the owner over the assets of the business especially at the point of liquidation:
Assets Liabilities = Owners Equity

THE EXPANDED ACCOUNTING EQUATION

So far all possible transactions that may occur in a business are analyzed with the used
of the basic accounting equation. However, the use of basic accounting equation alone cannot
provide information about the profitability of the business. Fortunately, the same framework
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can also be used to further analyze transactions involving revenues and expenses, two vital
information that is needed for the preparation of the income statement. It is only necessary to
expand or subdivide the owners equity into the following:
1. Capital
2. Withdrawals

3.
4.

Revenues
Expenses

The basic accounting equation, as it was express earlier was:

ASSETS = LIABILITIES + OWNERS EQUITY
From the above equation, we may create another equation by expanding the owners
equity as follows:
Owners Equity

Assets = Liabilities + Capital Withdrawals + Revenues - Expenses

CAPITAL This represents the equity or right of the owner for cash or other assets invested or
put into the business. This is used to present the amount of the beginning capital plus any
additional investments made by the owner.
WITHDRAWALS The owner may need to withdraw cash or other assets taken from the
business for his personal needs that do not relate to the business. A withdrawal is a
subdivision of owners equity that records personal expenses outside the normal operations of
the business, as distinguished from business expenses which relates the business operations.
REVENUES Revenue also known as income consists of assets received by an entity arising
from the sale of goods or the performance of services to the customers.
EXPENSES expenses represents costs incurred by a business in the process of generating
revenue.

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THE CHART OF ACCOUNTS

The increases and decreases in accounting element as affected by a business

transaction are recorded in a device called account name, account title or account.
Each accounting element is composed of several accounts which describe the related
economic transactions and events. To maintain uniform account name, the business must
have a listing of all the accounts it uses to record economic transactions. The listing of all
accounts is called Chart of Accounts.
The chart of accounts is usually arranged in the financial statement order that is, asset
accounts first, followed by liability accounts, owners equity, revenues and expenses accounts.
An example of chart of accounts could be listed as follows:

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JOSE BURGOS SERVICE

Accou
nt
Numbe
r
Assets (110-190)

110
120
130
140
150
160
170

510
520
530
540
550
560
570
580

Cash
Accounts
Receivable
Notes Receivable
Prepaid Supplies
Land
Building
Office Equipment

Expenses (510590)
Salary Expense
Rent Expense
Utilities Expense
Bad Debts
Expense
Advertising
Expense
Insurance
Expense
Taxes and
Licenses
Supplies
Expense

210
220

Liabilities (210290)
Accounts Payable
Notes Payable

230
240
250

Interest Payable
Loan Payable
Taxes Payable

310
320

Owners Equity
(310-390)
J. Burgos, Capital
J. Burgos, Drawing

410
420
430

Revenues (410490)
Service Income
Interest Income
Rent Income

The account
number is assigned to
each account. It is used
to facilitate recording,
arranging and crossreferencing the accounts.
Income Statement Accounts

Accou
nt
Numb
er

Balance Sheet Accounts

Chart of Accounts

Asset, liability, and

proprietorship accounts
are also called real
accounts, balance sheet
accounts, or permanent
accounts. Income and
expense accounts are
sometimes called nominal
accounts, profit and loss
accounts, or temporary
accounts.

TRANSACTION AND ITS EFFECT ON THE ACCOUNTING EQUATION:

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Transaction can be defined as any business activity or events which involves the exchange
of values between two parties.
The data that we record in the accounting books are called transactions. Transactions
are the economic activities of the firm. These activities could involve one enterprise and
another enterprise which is called external transaction or it maybe activities within the
enterprise which is called internal transaction. When there is a transaction there is an
exchange of value for value. In every transaction, there is always a value received and a
value parted with. These values received and parted with may either be money, property, or
services. This is the dual effect of business transaction which gave rise to the bookkeeping
system called Double Entry Bookkeeping. A transaction either increases or decreases the
assets, liabilities or owners equity but the equation or equilibrium among the elements should
always be maintained.
The following are examples of transactions that are not to be processed in
accounting yet, since they are not considered financial in nature, there being no exchange of
values:
1. A lease contract was signed for use of an office space at a monthly rental of P8,000.
2. Tourist guides were hired by JB Travel & Tours for a salary of P6,000 each.
Analysis of Business Transactions using the Accounting Equation:
There are nine (9) possible types of transactions (or combination of two or more of
these types) which may occur in the basic accounting equation. Some of these nine types
may occur frequently, which some may be seldom. A summary of the nine possibilities may
appear in a tabular form as follows:
DESCRIPTION

Increase in Assets = Increase in Owners

Equity
Increase in Assets = Increase in Liabilities
Increase in one form = Decrease in other
of Assets
form of Assets
Decrease in Assets = Decrease in O.E.
Decrease in Assets = Decrease in Liabilities
Increase in Liabilities = Decrease in O.E.
Increase in one form = Decrease in other
of liability
form of liability
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+
+

O.E.
+

+/-

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Increase in O.E. = Decrease in Liabilities

Increase in one form = Decrease in other
of Owners Equity
form of Owners Eq.

+
+/-

Note: + sign indicates an increase; - sign indicates a decrease

FINANCIAL STATEMENTS
The worksheet provides all the details needed in preparing the financial statements. Although
the preparation of a worksheet is essential in the accounting process, it is not by itself a formal
financial statement. It should not be considered as a substitute for the formal financial
statements which are the end product of an accountants work in the accounting process.

INCOME STATEMENT
The Income Statement, sometimes called the Profit and Loss Statement, is a formal statement
which shows the revenues generated and the expenses incurred by the business covering a
specified period of time.
OST COMPANY
Income Statement
For the Month Ended _________
tService Revenues
Less: Operating Expenses
Salaries Expense
Supplies Expense
Utilities Expense
Net Income (or Net Loss)

P xxxxx
P xxxx
xxxx
xxxx

xxxxx
P xxxxxx

STATEMENT OF CHANGES IN OWNERS EQUITY

Aside from the Income Statement and the Balance Sheet, another formal financial statement is
to be prepared. A statement that shows the changes that take place in the owners equity
covering a period of time is called Statement of Changes in Owners Equity.
OST COMPANY
Statement of Changes in Owners Equity
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For the Month Ended _________

Capital balance, beg. (or initial investment)
Add: Additional investments
P xxxx
Net Income for the period
xxxx
Total
Less: Owners withdrawals
P xxxx
Net Loss for the period
xxxx
Capital balance, ending

P xxxxx
xxxxx
P xxxxx
xxxxx
P xxxxxx

The capital balance, beginning represents the capital balance at the end of the last accounting
period and carried over to the current period. If the business is in its first year of operations,
the initial investment is to be shown instead. Additional investments made by the owner as
well as the net income for the period are to be added to the beginning capital balance. Any
withdrawals made by the owner and the net loss (if such is the case) suffered by the business
are to be deducted from the total amount. The difference would the owners capital balance,
end of the period. The capital balance at the end figure is carried over to the owners equity
section of the balance sheet.

BALANCE SHEET
The balance sheet is a formal statement that shows the financial position of the company as of
a particular date. It is a listing that shows the assets owned, the liabilities owed, and the equity
of the owner of the business.
OST COMPANY
Balance Sheet
Date
ASSETS
Cash
Accounts Receivable
Prepaid Rent
Photocopying Equipment
Total Assets

P xxxxx
xxxxx
xxxxx
xxxxx
P xxxxx

LIABILITIES & OWNERS EQUITY

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Accounts Payable
Notes Payable
Utilities Payable
Total Liabilities
Owners Equity
OST, Capital, end
Total Equities

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P xxxxx
xxxxx
xxxxx
P xxxxx
xxxxx
P xxxxx

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DECISION MAKERS
(Users & their needs of Accounting Information)

An investor makes investment in the hope of making profit. Not only must his
money be earning profit, but he also compares the profit earned by his business against
other investment alternatives. He considers likewise the risk involved in the investment.
A manager is responsible for directing the operation of the business. He is
required to plan the activities such as buying, manufacturing, promoting and distributing.
A banker or creditor is concerned with the ability of the buyer to pay not only the
principal debt but also the interest. The accounting information helps him decide on
whether to extend credit, how much credit to extend, what the amortization period will
be and what interest rate will be applied.
A supplier most often offers his goods for cash or on credit terms depending on
the paying ability of the customer. He uses the accounting information to determine the
credit worth of his customer.
The government uses the accounting reports in several ways: as a tax collector,
it investigates tax returns as to the correct tax liability of a business; as a regulatory
body it verifies if the business is complying with the promulgated rules and regulations;
and as a customer before it awards the contract to build bridges or roads or flyovers to a
particular construction business it must first assess the companys ability to deliver the
goods or services and be assured that there is no over profiteering from the contract, if
awarded.
Employees in their desire for higher wages, benefits, good working conditions
and security of tenure must first go over financial reports of the business in justifying for
their demands.
Even customers who have been informed that the price of a certain commodity
has increased would continue patronizing the business only if the price is fair and the
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product is worth the money they paid for it.

determined from the financial reports

The fairness of the price could be

SELF CHECK LO1-1

Instructions: Write T if the statement is true or F is the statement is false

______ 1. Accounting is a service activity whose function is to provide quantitative

information, about economic entities that is intended to be useful in making
economic decisions.
______ 2. A partnership is a business owned and operated by two or more persons
who bind themselves to contribute money, property or industry to a common
fund, with the intention of dividing the profits among themselves.
______ 3. The terms bookkeeping and accounting are synonymous.
______ 4. Assets are things of value owned by a business entity.
______ 5. Both sides of the fundamental accounting equation must always be equal.
______ 6. The entity concept states that the transactions of different entities should be
accounted for together.
______ 7. Account Receivable is considered as an asset.
______ 8. Liabilities represents amounts owed to creditors.
______ 9. Capital represents the owners investment, or equity in a business.
______ 10. In the fundamental accounting equation, assets are added to liabilities.

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ANSWER KEY LO1-1

1. T
2. T
3. F
4. T
5. T
6. F
7. T
8. T
9. T
10. F

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SELF CHECK LO1-2

Transaction Effects on the Basic Accounting Equation

The following are some transactions of Juanita Pindea Laundry Services:
A
a. Received cash as additional investment.
_______
b. Purchased supplies on account.
_______
c. Charged customers for services made on account.
_______
d. Rendered services to cash customers.
_______
e. Paid cash for rent on building.
_______
f. Collected on account receivable in full.
_______
g. Paid cash for supplies.
_______
h. Returned supplies purchased on account.
_______
i. Paid cash to settle accounts.
_______
j. Paid cash to owner for personal use.
_______

______

_______

______

_______

______

_______

______

_______

______

_______

______

_______

______

_______

______

_______

______

_______

______

_______

OE

Required:

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For each transaction, indicate whether the assets (A), liabilities (L), or owners equity
(OE) increased (+), decreased (-) or did not change (0) by placing the appropriate sign
the appropriate column.

ANSWER KEY LO1-2

Transaction Effects on the Basic Accounting Equation

The following are some transactions of Juanita Pindea Laundry Services:
A
a. Received cash as additional investment.
b. Purchased supplies on account.
c. Charged customers for services made on account.
d. Rendered services to cash customers.
e. Paid cash for rent on building.
f. Collected on account receivable in full.
g. Paid cash for supplies.
h. Returned supplies purchased on account.
i. Paid cash to settle accounts.
j. Paid cash to owner for personal use.

+
+
+
+
+
+, +, -

OE

+
-

Required:
For each transaction, indicate whether the assets (A), liabilities (L), or owners equity
(OE) increased (+), decreased (-) or did not change (0) by placing the appropriate sign
the appropriate column.

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WORKSHEET LO1-1
Recording transactions in a financial transaction worksheet
INSTRUCTION: Indicate the effect of each transaction below using the balance sheet
equation:
The following selected transactions were completed by Roberto Orca Delivery Service
during July 2012:
1. Cash received from delivery services, P92,700.
2. Paid creditors on account, P20,000.
3. Received cash from owner as additional investment, P600,000.
4. Paid advertising expense, P5,000.
5. Billed customers for delivery services on account, P55,200.
6. Purchased supplies for cash, P6,000.
7. Paid rent for July, P20,000.
8. Received cash from customers on account, P25,440.
9. Determined that the cost of supplies on hand was P1,440 so P4,560 of supplies
were used during the month.
10. Owner withdrew cash for personal use, P20,000.
Transaction
1.

Assets

Liabilities

Owners Equity

2.
3.
4.
5.
6.
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7.
8.
9.
10.
TOTAL

WORK SHEET LO1-1

INTRUCTION:
1. Write at least ten (10) typical business transactions for a video rental business.
2. Analyze each transaction and write the accounts affected.
3. Prepare the chart of accounts for a video rental business.
TRANSACTIONS

CHART OF ACCOUNTS

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QUALIFICATION

BOOKKEEPING NC II

UNIT OF COMPETENCY :

JOURNALIZE TRANSACTIONS

MODULE

JOURNALIZING TRANSACTIONS FOR SINGLE

PROPRIETORSHIP

LEARNING OUTCOME #2 :

ANALYZE DOCUMENTS

ASSESSMENT CRITERIA:
1. Documents are gathered, checked and verified in accordance with verification
and validation processes.
2. Account titles are selected in accordance with standard selection processes.

RESOURCES:
The students/trainees must be provided with the following:

Paper
Learning Materials
Pen
Sample Business Documents

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REFERENCES:
1. ACCOUNTING PRINCIPLES 1 by Arganda/Cardenas-Atis/Del Rosario, Jr.
2. BASIC ACCOUNTING PRINCIPLES AND APPLICATIONS by Carlito V. Reyes
3. BASIC ACCOUNTING MADE EASY by Win Ballada

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Learning Outcome #2: Analyze Documents

SPECIAL INSTRUCTIONS

LEARNING ACTIVITIES
1. Read Information Sheet 1.2-1

Read and understand the information

sheet.

2. Answer Self-Check for 1.2-1

Compare answers with the answer key.

You are required to get all answers
correct. If not, read the information
sheets again to answer all questions
correctly.

3. Worksheet 1.2-1

Present your work to your trainer for

evaluation and recording.

After doing all activities of this LO,

you are ready to proceed to the next
LO on prepare journal entry.

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INFORMATION SHEET LO2-1

Analyze Documents

SOURCE DOCUMENTS

are the forms, evidences or legal/official papers that serve as supports to the
underlying economic transactions.
These evidential matters support the
objectivity of accounting records.
The following are some examples of common business forms and documents wherein
the business activities of the enterprise are written:

OFFICIAL RECEIPT is a document which evidences receipt of cash.

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INVOICE is issued when service or merchandise is given to a customer or client.

CASH VOUCHER is a document used when cash is paid by the business.

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CHECK VOUCHER is a document that serves to recognize a liability and authorize

the disbursement or cash.

CHECK is issued when payment is made from the cash deposited in the bank.

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PROMISSORY NOTE is a written promise made by the maker to pay the payee
(creditor) a sum certain in money at a fixed or determinable future time.

DEPOSIT SLIP is a document which serves as an evidence of an act of placing

money in the custody of a bank or banker, for safety or convenience, to be withdrawn at
the will of the depositor or under rules or regulations agreed upon.
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PAYROLL SHEET is a written list of salaries to be paid, with the amounts due. The
aggregate of these amounts are the money to be disbursed.

STATEMENT OF ACCOUNT is a report issued periodically by a bank or creditor to a

customer setting forth the amounts billed, credits given and balance due.
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ACCOUNT TITLES
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ASSETS:
Current Assets
Cash on Hand refers to cash and other cash items which are not yet deposited in the
bank. It includes coins, currencies, check, money orders, and other money equivalents.
Cash in Bank is money deposited in the bank.
Notes Receivable Amounts collectible from customers for goods sold and services
rendered on credit or from others for loans granted. Such claims are evidenced by a
promissory note.
Accounts Receivable Claims from customers arising from goods sold or services
rendered on credit. It represents the debtors oral promises to pay.
Estimated uncollectible Account is sometimes called Allowance for Bad Debts. It
refers to a provision for accounts that may not be collected in the future. This is a
contra-asset account and is a deduction from the Accounts Receivable.
Interest Receivable is interest earned on an interest-bearing note not yet collected.
Accrued Interest Income is a term, synonymous with interest receivable.
Merchandise Inventory refers to goods unsold at the end of the accounting period or
on hand at the beginning of the year.
Prepaid Expenses are expenses paid in advance or items that are bought which will
be used during the accounting period. Examples are: Supplies, Prepaid Insurance,
Prepaid Rent. Other terms used for supplies are Prepaid Supplies, Supplies on
Hand, Unused Supplies or Supplies Inventory.

Non-Current Assets
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Land Land owned by the business used for building sites and other business
purposes.
Building Buildings owned and used by the business in its operation.
Furniture and Fixtures It includes tables, chairs, showcases, counters, cabinets and
other pieces of furniture owned and used by the business in its operation.
Equipment It includes typewriters, calculators, cash registers, and other similar
assets.
Vehicles includes cars, jeeps, trucks, vans, and other transportation vehicles owned
by the business.
Accumulated Depreciation is a contra-asset account. It is a deduction from a
particular fixed asset account. All fixed assets except land are subject to depreciation.
Intangible Assets are assets that do not have physical existence owned by the
business. Examples are Goodwill, Patents, and Trademarks.

LIABILITIES:
Current Liabilities
Accounts Payable Amounts due to creditors for the goods or services bought on
credit.
Notes Payable Amounts due to the creditors which are supported by a promissory
note. It is a current liability if the note is payable within a year. If the note is payable
beyond one year, it is classified as a long-term liability.
Accrued Liabilities Amounts owed to others for unpaid expenses. These are debts
that have accumulated because of the passage of time but that are not yet due for
payment as at the balance sheet date. Typical examples of accrued liabilities are:

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Interest Payable is the interest due to an interest bearing note.

Accrued Interest Expense is a term synonymous with interest payable.
Salaries Payable Amounts due to the employees for services they have
rendered.
Taxes Payable are taxes due for the government not yet paid by the business.
Other examples of expenses not yet paid by the business are Rent Payable,
Utilities Payable, and many others.
Unearned Revenues receives payment before providing its customers with
goods or services.
Long-term Liabilities
Mortgage Payable is a long-term liability account that refers to debt secured by a
mortgage on real estate.

OWNERS EQUITY:
Owners Capital used to record the amount the owner of the business entity has
invested in the entity. This account is ultimately reduced by cash or other assets that
the owner may withdraw from the business. This account is increased by the amount of
net income earned during the year and is decreased by a net loss. This account title
bears the name of the owner.
Owners Drawing is a term that shows the withdrawal of cash or other items from the
business by the owner.

INCOME (a.k.a. REVENUE): is a general term to mean any earning made by the
business.
Service Income Amounts of income earned from services rendered of a service
concern business.
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Sales Total sales of merchandise sold.

Professional Fee Income Amounts earned by professionals such as CPAs, doctors,
lawyers, etc. for services they render.
Rent Income Amounts of rental earned for the period.
Commission Income is an income account to designate earnings received from
selling anything on a commission basis.
Interest Income Amounts earned for lending money.

EXPENSES:

Taxes and Licenses Expense are payments made by the business to the
government for its business operations like privilege taxes, percentage taxes, mayors
permit, and others.
Salaries Expense (or Wages Expense) refers to the cost of services rendered by the
employees or workers of the business.
Supplies Expense Amount of supplies used.
Bad Debts Expense refers to that portion of accounts receivable which may not be
collected.
Insurance Expense refers to the insurance premium paid by the business.
Rent Expense refers to the space occupied by the business or the payment for the
use of any property by the business.
Interest Expense refers to the amount charged for the use of money.
Advertising Expense Expenses incurred to promote the product of the business.
Utilities Expense Amount of light and water consumed by the business.

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Repairs and Maintenance Expense Expenses incurred for repairing the assets of
the business.
Depreciation Expense Allocated cost of fixed asset in the current period.

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SELF CHECK LO2-1

Instruction: Fill in the blanks. Write the answer on the space provided.

___________ 1. This document is a written promise made by the maker to pay the
payee (creditor) a sum certain in money at a fixed or determinable
future time.
___________ 2. This document is a written list of salaries to be paid, with the amounts
due. The aggregate of these amounts are the money to be
disbursed.
___________ 3. This is a contra-asset account and is a deduction from the Accounts
Receivable.
___________ 4. This is a long-term liability account that refers to debt secured by a
mortgage on real estate.
___________ 5. Refers to cash and other cash items which are not yet deposited in the
bank. It includes coins, currencies, check, money orders, and other
money equivalents.

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ANSWER KEY LO2-1

1. Promissory note
2. Payroll sheet
3. Allowance for Doubtful accounts
4. Mortgage payable
5. Cash

WORK SHEET LO2-1

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INSTRUCTION:
Several transactions of Hanson Pool Service are described below. Indicate the type
of source document that is likely to contain the details of each transaction.
1. Purchased P500 worth of chemicals on account from Campbell Chemical Co.
2. Received cash from a customer on account, P120.
3. Purchased a new generator for use in the business, paying P550 cash.
4. Paid the current month's electric bill of P95.
5. Billed customers for pool services performed during the past week, P2,300.
6. Invested a used truck in the business; the truck is valued at P3,000.
7. Made a P250 payment on account to Campbell Chemical Co.

QUALIFICATION

UNIT OF COMPETENCY :

BOOKKEEPING NC III
JOURNALIZE TRANSACTIONS

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MODULE

LEARNING OUTCOME #3 :

JOURNALIZING TRANSACTIONS FOR SINGLE

PROPRIETORSHIP
PREPARE JOURNAL ENTRY

ASSESSMENT CRITERIA:
1. Journal entries are prepared in accordance with generally accepted
accounting principles.
2. Debit and credit account titles are determined in accordance with chart of
accounts.
3. Explanation to journal entry is prepared in accordance with the nature of
transaction.

RESOURCES:
The students/trainees must be provided with the following:

Calculator
Journal Paper
Learning Materials
Pencil
Eraser
Philippine Financial Reporting Standards

REFERENCES:
1. ACCOUNTING PRINCIPLES 1 by Arganda/Cardenas-Atis/Del Rosario, Jr.
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2. BASIC ACCOUNTING PRINCIPLES AND APPLICATIONS by Carlito V. Reyes

3. BASIC ACCOUNTING MADE EASY by Win Ballada

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Learning Outcome #3: Prepare Journal Entry

SPECIAL INSTRUCTIONS

LEARNING ACTIVITIES
1. Read Information Sheet 1.3-1

Read and understand the information

sheet.

2. Answer Self-Check for 1.3-1

Compare answers with the answer key.

You are required to get all answers
correct. If not, read the information
sheets again to answer all questions
correctly.

3. Worksheet 1.3-1

Present your work to your trainer for

evaluation and recording.

After doing all activities of this LO,

you are ready to proceed to the next
unit of competency Post
Transactions.

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INFORMATION SHEET LO3-1

FUNDAMENTAL CONCEPTS OF ACCOUNTING

Several fundamental concepts underlie the accounting process. In recording business
transactions, accountants should consider the following:
ENTITY CONCEPT. The most basic concept in accounting is the entity concept. An
accounting entity is an organization or a section of an organization that stands apart
from other organizations and individuals as a separate economic unit. Simply put, the
transactions of different entities should not be accounted for together. Each entity
should be evaluated separately.
PERIODICITY CONCEPT. An entitys life can be meaningfully subdivided into equal
time periods for reporting purposes. It will be aimless to wait for the actual last day of
operations to perfectly measure the entitys net income. This concept allows the users
to obtain timely information to serve as a basis on making decisions about future
activities. For the purpose of reporting to outsiders, one year is the usual accounting
period.
STABLE MONETARY UNIT CONCEPT. The Philippine peso is a reasonable unit of
measure and that its purchasing power is relatively stable. It allows accountants to add
and subtract peso amounts as though each peso has the same purchasing power as
any other peso at any time. This is the basis for ignoring the effects of inflation in the
accounting records.

BASIC PRINCIPLES OF ACCOUNTING

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Accounting practices follow certain guidelines. The set of guidelines and procedures
that constitute acceptable accounting practice at a given time is GAAP, which stands for
generally accepted accounting principles. In order to generate information that is
useful to the users of financial statements, accountants rely upon the following
principles:
OBJECTIVITY PRINCIPLE. Accounting records and statements are based on the most
reliable data available so that they will be as accurate and as useful possible. Reliable
data are verifiable when they can be confirmed by independent observers. Ideally,
accounting records are based on information that flows from activities documented by
objective evidence. Without this principle, accounting records would be based on
whims and opinions and is therefore subject to disputes.
HISTORICAL COST. This principle states that acquired assets should be recorded at
their actual cost and not at what management thinks they are worth as at reporting
date.
REVENUE RECOGNITION PRINCIPLE.
Revenue is to be recognized in the
accounting period when goods are delivered or services are rendered or performed.
EXPENSE RECOGNITION PRINCIPLE.
Expenses should be recognized in the
accounting period in which goods and services are used up to produce revenue and not
when the entity pays for those goods and services.
ADEQUATE DISCLOSURE. Requires that all relevant information that would affect the
users understanding and assessment of the accounting entity be disclosed in the
financial statements.
MATERIALITY. Financial reporting is only concerned with information that is significant
enough to affect evaluations and decisions. Materiality depend on the size and nature
of the item judged in the particular circumstances of its omission. In deciding whether
an item or an aggregate of items is material, the nature and size of the item are
evaluated together. Depending on the circumstances, either the nature or the size of
the item could be the determining factor.
CONSISTENCY PRINCIPLE. The firms should use the same accounting method from
period to period to achieve comparability over time within a single enterprise. However,
changes are permitted if justifiable and disclosed in the financial statements.
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BUSINESS AS AN ACCOUNTING ENTITY

In accounting, the business is always assumed to be distinct and separate from its
owner or owners. Which means that the personal properties of the owner are different
from the assets of the business, the liabilities of the business are different from his
personal obligations, and the expenses incurred by the business are also different from
his personal expenses? The transactions therefore, entered into by the owner in behalf
of the business should be recorded in the books of the firm.

ACCOUNTING PERIOD AND ACCOUNTING CYCLE

Accounting period or fiscal period is each segment of time, usually a year, in

which statements are prepared in order to know the results of the business operation
during that particular period of time. The length of each accounting period depends on
the nature of the business. An accounting period may be annual, semi-annual,
quarterly, or monthly. Usually, most firms use such period of time when the business is
slow as the end of their accounting period and the beginning of the next period.
Accounting cycle consists of successive steps starting with the recording of
transactions in the books of accounts and ending with a post-closing trial balance.
The following successive steps consist one accounting cycle:
1. Transaction analysis
2. Journalizing transactions
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3.
4.
5.
6.
7.
8.
9.

Posting the accounts

Preparation of the Trial Balance
Adjusting the entries
Preparation of the worksheet
Preparation of the financial statement
Closing the entries
Preparation of the Post-closing trial balance
DEBIT AND CREDIT

The two sides of accounting equation is an application of the dual aspect

concept which provides that every value received must have a corresponding value
parted with. This concept is the basis of the debit and credit in recording economic
transactions and event. The two equal sides define the foundation of the rules of debit
and credit.
Debit is the value received in a business transaction which must be recorded in the
journal. This word is derived from a Latin word for borrower, debitum (a debtor). The
place of debit in the equation is on the left-hand side. The word charge in accounting
would also mean debit.
Credit (Lat. Creditum, a creditor) is the value parted with in a business transaction,
which must be recorded in the journal. The place of credit in the equation is on the
right-hand side.

THE RULES OF DEBIT AND CREDIT:

The rules of debit and credit are based on the normal balance of an accounting
element or account. The term normal balance of account refers to the usual position
of an account in the T-account.
Asset accounts are normally in the debit balance while the liability and owners
equity accounts are normally in the credit balance.

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The normal balance of an account provides the basis in analyzing when to debit
and credit an account. The following rules must be observed when to debit or credit an
asset, liability and capital accounts.
Assets

Debit to increase the amount of asset.

Credit to decrease its amount.

Liability

Credit to increase the amount of liability.

Debit to decrease its amount.

Owners Equity

Credit to increase the capital account.

Debit to decrease its amount.

Owners Drawing

Debit to increase withdrawal account.

Credit to decrease its amount.

Revenue

Credit to increase the revenue account.

Debit to decrease its amount.

Expense

Debit to increase expense account.

Credit to decrease its amount.

THE RULES OF DEBIT AND CREDIT

Increase or Decrease

Assets, Withdrawals, and

Expenses

Liabilities, Capital, and

Revenues

To record increases

DEBIT

CREDIT

To record decreases

CREDIT

DEBIT

THE T-ACCOUNT

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The simplest form of an account called the T-Account has two sides: one side is
for recording increases and the other side is for recording decreases. At the center of
the T account is the title of the item. To illustrate:
Cash

Left side or

Right side or

Debit side

Credit side

When an amount is to be recorded on the left side, we simply say debit the
account, and when it is to be recorded on the right side, we say credit the account.
Debit is an accounting term which simply means left side of an account, while credit
simply means right side of an account. What happens when the amount is placed on
the left side or on the right side of an account? Some accounts are increased on the
debit side, others on the credit side based on the accounting equation:

Assets

Liabilities +

Owners Equity

Since the assets are on the left side or debit side, increases are therefore on the
debit side and decreases are on the credit side. Since liabilities and owners equity are
on the right side or credit side, increases therefore are on the credit side and decreases
are on the debit side. Thus:

ASSETS

Debit

LIABILITIES

Credit

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Credit

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OWNERS EQUITY

Debit

Credit

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JOURNALIZING

Journalizing is the first step in the accounting cycle. It is the process of recording
business transactions in a journal.
A journal is a book of accounts wherein business transactions are recorded for the
first time. It is also called the book of original entry. There are two kinds of journal the
general journal and the special journals. Cash receipts journal, cash payments journal,
sales journal, purchases journal, and some other forms of combination journals are
special journals. The type of journal to be used depends on the size and need of the
business.
General journal is the simplest form of journal wherein the two-column form may be
used.

Illustration:

General Journal

Date

Account Titles and Explanation

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Credit

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A general journal contains the following columns:

Date the date of the transaction is entered in this column; transactions are recorded in
a systematic manner and in a chronological order.

Account Titles and Explanation this column contains the debit and credit accounts
and a brief explanation of the entries.
Folio this contains the post reference number or the ledger page in which the
accounts are transferred.
Debit contains the amounts debited.
Credit contains the amounts credited.
Procedures in Journalizing:
A. Under the date column
1. The year is written in small figures at the top of the first column.
2. The month of the transaction is written on the first line of the column. The
year and the month are not repeated except at the top of a new page or
when there is a change in the month.
3. The day of each transaction is written in the right sub-column of the date
column. The date of the transaction occurring on the same day is
repeated.
B. Under the account titles and explanation column
1. The name of the account debited is written first at the left margin of the
account titles and explanation column.
2. The name of the account credited is written on the following line, indented
about one-half inch from the left margin.

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Journalizing
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3. The explanation is placed on the next line, indented about one inch from
the left margin. The explanation should be short but sufficient enough to
explain the entry.
C. Under the debit column
1. The debit amount is written on the debit column opposite the debit
account.
D. Under the credit column
1. The credit amount is written on the credit column opposite the credit
account.
E. Under the folio column
1. The folio or reference column is used to indicate the page number of the
ledger in which the entry is transferred.
There is no entry yet in the folio column when transactions are recorded in the
general journal. However, when the entries are copied from the journal to the ledger,
the account number of the ledger accounts in which the debits and credits are copied
are entered in the folio column.
2. A single-space should be left blank after each entry.
A Journal entry is a record of business transactions in the journal. There are two
types of journal entry: the simple journal entry which contains only one debit and one
credit accounts, and the compound journal entry which contains either one debit and
two or more credits; or two or more debits and one credit; or two or more debits and two
or more credits.
Need for a journal
1. To provide in one place a complete record of each transaction. Such will link
together the debits and credits of the transactions.
2. The records make it possible to trace the debits and credits of the accounts when
errors are committed.
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Journalizing
Transactions

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Bookkeeping techniques

When recording transactions in the journal or ledger, commas and periods are no
longer written because the rules lines in the forms accomplished this purpose. Each
column represents a digit as follows:

thousand digits
ten-thousands
hundred thousands
peso sign

hundred digits
tens digits
ones digits
centavos

However, when reports are prepared in unruled paper, commas and periods are
necessary.

Dash instead of zeros may be used in writing centavos because it is easier to write than
two zeros. This, however, is optional on the part of the bookkeeper. When preparing
reports, however, two zeros are preferred because they are neater in appearance.

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Journalizing
Transactions

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SELF CHECK LO3-1

Instruction: Indicate whether the sentence or statement is TRUE or FALSE.

_________ 1. The top of the T-Account is used for account titles. Credits are entered
on the left side of the T-account; debits, on the right.
_________ 2. A credit to an account always increases it; a debit to an account always
decreases it.
_________ 3. The payment of liability is recorded by a debit to the liability account and
a credit to the owners capital account.
_________ 4. The difference between the debit and credit amounts in an account is the
account balance.
_________ 5. An asset account appears on the right side of the accounting equations
and is also increased on the right side of its T-account.

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Journalizing
Transactions

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ANSWER KEY LO3-1

1. False
2. False
3. False
4. True
5. False

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Journalizing
Transactions

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WORKSHEET LO3-1
Listed below are several account titles, each identified by a letter. Following the list of
accounts is a series of business transactions. Indicate the account to be debited and the
account to be credited for each transaction.
A. Cash in Bank
B. Accounts Receivable
C. Office Supplies

D. Store Equipment F. Accounts Payable

E. Office Equipment G. Melanie Nelson, Capital

1. Melanie Nelson deposited P15,000 in cash from personal funds into the business
checking account.
2. Melanie Nelson issued a check for P1,750 to buy store equipment.
3. Melanie Nelson bought a computer for the business on credit from Modern
Equipment, Inc., for P1,599.
4. Issued a check for P682 to buy supplies for the office.
5. Issued a check for P800 to Modern Equipment, Inc., as half payment for the
computer.
6. Sold P65 in office supplies to Hector Ramirez, CPA, on account.
7. Melanie Nelson invested an additional P3,000 cash in the business.
8. Received a P65 check from Hector Ramirez, CPA, for office supplies purchased
earlier.
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Journalizing
Transactions

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WORKSHEET LO3-2
INSTRUCTION: Analyze and journalize the following transactions. Use journal paper.
Pat Kwok owns and operates Kwok's Word Processing Service. The accounts
used for recording and reporting business transactions are:
Cash in Bank
Accounts Receivable
Processing Supplies

Office Equipment
Computer Equipment

Accounts Payable
Pat Kwok, Capital

Pat completed these transactions during the first month of operation on July 2012.
1. Pat invested P20,000 in the business to begin operations.
2. Purchased computer equipment for P3,500.
3. Invested computer equipment, valued at P600, in the business.
4. Bought a used cash register, P975, on account from Downey Equipment, Inc.
5. Purchased processing supplies for P739.
6. Paid P600 on account to Downey Equipment, Inc.,.
7. Purchased paper, ribbons, and other processing supplies for P539, on account, from
Gillis
Office Supplies.
8. Purchased a desk for P495.
9. Paid Gillis Office Supplies P539 on account.

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Journalizing
Transactions

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JOB SHEET 1.1-1

Title : Journalizing Transactions
Performance Objective: Record business transactions in the journal with carefulness and
accuracy.
Supplies : journal paper, pen
Tools: Calculator
Steps/Procedure:
1. Analyze the transactions of Arthurs Machine Works.
2. Journalize accurately the transactions using journal paper.
The following selected transactions were completed by Arthurs Machine Works during the month of
February, 2012:
1 M. Arthur made an investment in cash P20,000 and Furniture, P10,000 to start his business.
3 Purchases supplies for cash P500.
5 Purchased equipment on account for P15,000 from Sanyo.
10 Received from customers cash P4,200 for machine work done.
12 Paid Gas and Oil, P1,500.
15 Paid 50% of its account due to Sanyo.
18 Billed customer for machine work done, P8,500.
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Journalizing
Transactions

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20 Arthur made a
cash withdrawal for personal use, P500.
21 Collected P4,200 from customers who were billed in Feb. 18.
22 Accounts payable to Sanyo is due. Issued a note promising to pay after 5 days.
25 Paid the Meralco bill for electricity used up, P1,000.
27 The note in Feb. 22 was paid from the personal cash of the owner.
28 All the supplies were used up.
Account Titles:
Cash; Accounts Receivable; Supplies; Furniture and Fixtures; Equipment; Accounts Payable; Notes
Payable; Arthur, Capital; Arthur, Drawing; Service Income; Gasoline Expense; Utilities Expense;
and Supplies Expense

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Journalizing
Transactions

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Performance Criteria Checklist for

Job Sheet 1.1-1
Journalizing Transactions
Trainees Name: ______________________________ Date:
___________________

CRITERIA

YES

NO

1. Prepare journals in accordance with industry

practice and generally accepted accounting
principles/Philippine
Financial
Reporting
Standards for transactions and events.
2. Determined debit account titles in accordance
with chart of accounts.
3. Determined credit account titles in accordance
with chart of accounts.
4. Prepared explanation to journal entry in
accordance with the nature of transaction
5. Prepared journal entries with 100% accuracy.
Comments / Suggestions:
_______________________________________________

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Journalizing
Transactions

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______________________________________________________________________
_
______________________________________________________________________
Trainer: ___________________________

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Bookkeeping NCIII
Journalizing
Transactions

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Date Developed :
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Unit of
competency:

Journalize Transactions

The evidence must show that the trainee

Oral Questioning

Bookkeeping NCIII

Practical/
performance test

Competency
standard:

Written Test

Evidence Plan

Prepare journals in accordance with industry practice

and
generally
accepted
accounting
principles/Philippine Financial Reporting Standards for
transactions and events.
Determined debit account titles in accordance with
chart of accounts.
Determined credit account titles in accordance with
chart of accounts.
Prepared explanation to journal entry in accordance
with the nature of transaction.
Prepared journal entries with 100% accuracy.
NOTE: *Critical aspects of competency
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Journalizing
Transactions

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Prepared
by:

Date:

Checked
by:

Date:

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Journalizing
Transactions

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BOOKKEEPING NCIII
Journalize Transactions
WRITTEN TEST
TEST I. Ruth Abrams, a physical therapist, is the owner/operator of Abrams Health
Center. Below is a partial listing of the accounts used in the business.
A.
B.
C.
D.

Cash in Bank
Accts. Rec.Bret Hagen
Office Equipment
Medical Equipment

E. Accts. Pay.Metro Suppliers

F. Ruth Abrams, Capital
G. Ruth Abrams, Withdrawals
H. Professional Fees
I. Advertising Expense

Use the form that follows. For each transaction:

(1) Determine which accounts are debited and credited, and place the letter assigned
to those accounts in the Acct. Title columns.
(2) Indicate the account classification by placing A for asset, L for liability, OE for
owner's equity, R for revenue, and E for expense in the Acct. Class. columns.
(3) Indicate whether the account is to be increased or decreased by placing a plus sign
(+) for increase and a minus sign (-) for decrease in the Incr./Decr. columns.

Trans. No.

Account
Title

Account Debited
Account
Increase/
Class.
Decrease

Account
Title

Account Credited
Account
Increase/
Class.
Decrease

1
2
3
4
5
6
7
8
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Journalizing
Transactions

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Transactions:
1.
2.
3.
4.
5.
6.
7.
8.

Ruth Abrams invested P5,000 in the business.

Received P520 for professional services completed for a client.
Received P60 from a patient, Bret Hagen, to apply on account.
Purchased therapy equipment on account from Metro Suppliers, P1,800.
Ruth Abrams withdrew P400 in cash for personal use.
Wrote a check for P75 in payment to the Daily News for the weekly advertisement.
Ruth Abrams donated an old file cabinet, valued at P75, to the business.
Paid Metro Suppliers P500 on account.

TEST II: Below is a partial listing of the accounts used by Macy Landscaping. Record
the following business transactions on page 2 of the general journal using the current
year.
Cash in Bank
Accounts ReceivablePeggy Dunne
Supplies Fees

Bill Macy, Capital

Bill Macy, Withdrawals

Rent Expense
Supplies Expense

Transactions:
Nov. 1 Issued Check for P900 in payment of the monthly rent.
5 Received a check for P200 from a charge customer, Peggy Dunne, on
account.
7 The owner, Bill Macy, withdrew from the business P20 in supplies for personal
use.

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Journalizing
Transactions

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GENERAL JOURNAL
DATE

PARTICULARS

P/R

DEBIT

CREDIT

BOOKKEEPING NCIII
Journalize Transactions
PRACTICAL TEST

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Journalizing
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INSTRUCTION: Journalize the following transaction of Ms. Snooky Von.

Miss Snooky Von opened a nursery school called Rainbow Nursery School.
The following transactions took place in the first month of the business
operations:

June, 2010
1 Miss Von invested P300,000 in the business.
2 Purchased tables and chairs, P13,000 and play equipment for P23,000 from Almar
Nursery Home on credit.
4 Paid P1,200 cash to a local newspaper for advertising for the opening of the nursery
school.
5 Purchased nursery supplies from Leo Nursery Supplies on credit, P7,500.
7 Received P8,000 from a client.
8 Paid P10,000 to Almar Nursery Home as partial settlement on account.
10 Sent a bill to P. Paloma for fees amounting to P6,500.
11 Paid Leo Nursery Supplies the full amount due to it.
15 Paid the monthly rent of the space, P5,000.
15 Paid the wages of the nursery helper, P2,500.
18 Collected P3,000 form P. Paloma as partial settlement of her account.
20 Received P10,500 from various customers.
25 Paid the utility bills for the month, P1,800.
26 Purchased additional nursery supplies for cash, P15,000.
28 Withdrew P5,000 for personal use.
30 Paid the wages of the nursery helper, P2,500.
ACCOUNT TITLES:
Cash, Accounts Receivable, Nursery Supplies, Furniture and Fixtures, Play Equipment,
Accounts Payable, Von Capital, Von Drawing, Fees Income, Advertising Expense, Rent
Expense, Wages Expense and Utilities Expense.

St. Ignatius Technical Institute of Business and Arts

Training Evaluation Sheet

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Journalizing
Transactions

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Name of Trainee: _______________________________

___________ Department/Shop: ________________________

Date:

INSTRUCTIONS:
This post-training evaluation instrument is intended to measure how satisfactorily
your trainer has done his job during the whole duration of your training. Please give your
honest rating by checking on the corresponding. Your answers will be treated with
utmost confidentiality.

TRAINERS/ INSTRUCTORS
Name of Trainer:

Poor/
Unsatisfactory

Fair/
Satisfactory

Good/
Adequat
e

Very
Good/
Very
Satisfactory

Outstanding

_______________________________

Orients trainees about CBT, the use of

CBLM and the evaluation system
Discusses clearly the unit of competencies
and outcomes to be attained at the start of
every module
Exhibits mastery of the course he/she is
teaching
Motivates and elicits active participation
from the students or trainees
Keeps records of evidence/s of
competency attained by each
student/trainees
Instill the value of safety and orderliness.
in the classrooms and workshops
Instills the value of teamwork and positive
work values
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Journalizing
Transactions

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TRAINERS/ INSTRUCTORS
Name of Trainer:

Poor/
Unsatisfactory

Fair/
Satisfactory

Good/
Adequat
e

_____________________________

Very
OutstanGood/
ding
Very
Satisfact
ory
4

Instills good grooming and hygiene

Instills value of time
Clarity of voice while teaching
Use appropriate language or dialect
Provides extra attention to trainees with
specific learning needs
Attends classes regularly and promptly
Shows energy and enthusiasm while
teaching
Maximizes use of training supplies and
materials

Poor/
Unsatisfactory

Fair/
Satisfactory

Good/
Adequat
e

Very
Good/
Very
Satisfact
ory

Outstanding

PREPARATION

Workshop layout conforms with the

components of a CBT workshop
Number of CBLM is sufficient
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Journalizing
Transactions

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Orientation given is clear and

comprehensive
Objectives of every training sessions
are well explained
Expected activities/outputs are clarified

PROGRAM DESIGN
AND DELIVERY

Poor/
Unsatis
-factory

Fair/
Satisfactor
y

Good/
Adequat
e

Very Good/
Very
Satisfactor
y

Outstanding
5

Course contents are sufficient to

attain objectives
CBLM are logically organized and
presented
Information Sheet are
comprehensive in providing the
required knowledge
Provide relevant examples,
illustrations and demonstrations.
Sufficiency exercises, like Task/Job
Sheets are sufficient to learn
required skills
Appropriate knowledge are learned
through the contents of the course
Training Methodologies are
effective
Assessment Methods and
evaluation system are suitable for
the trainees and the subject matter
Recording of achievements and
competencies acquired is prompt
and comprehensive
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Journalizing
Transactions

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Feedback about the performance of

learners are given immediately

TRAINING FACILITIES /
RESOURCES

Poor/
Unsatisfactory

Fair/
Satisfactory

Good/
Adequate

Very Good/
Very
Satisfactory

Outstanding

Training Resources are adequate

Training Venue is conducive for
learning
Equipment, Supplies, and
Materials are Sufficient
Equipment, Supplies and
Materials were suitable and
appropriate
Promptness in providing Supplies
and Materials

Poor/
Unsatisfactory

Fair/
Satisfactory

Good/
Adequat
e

Very
Good/
Very
Satisfact
ory

Outstanding

SUPPORT STAFF

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Journalizing
Transactions

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Support Staff are accommodating

Support Staff are knowledgeable
on the tools and equipment in
their respective stations

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Bookkeeping NCIII
Journalizing
Transactions

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