"BALANCING"

ACCOUNTING TUTORIAL - Part 6

(May "EXPLANATION" sa CAPTION ng bawat photo) 👍

GUIDE:

For beginners, tingin muna sa GUIDE.

Kung maaari ay isulat mo ito sa papel, at tingnan habang sinasagot ang bawat items.

Malilito ka sa simula, pero ulit-uliting lang hanggang sa masanay ka na. 😊

Ito yung guide (paki sulat mo na):

*ASSET
Nagkaroon (+), DEBIT
Nawalan (-), CREDIT

*LIABILITIES
Nagkaroon (+), CREDIT
Nawalan (-), DEBIT

*OWNER'S EQUITY
Nagkaroon (+) ng OE:
=Investment/Capital.... CREDIT
=Revenue or Income.... CREDIT

Nawalan (-) ng OE:

= Expenses:
"Bawas"(-) sa OE, pero "Dagdag"(+) sa Expense.... DEBIT

= Drawings:
"Bawas"(-) sa OE, pero "Dagdag"(+) sa Drawings.... DEBIT

Additional info: Pag sinabing "nagkaroon ng OE", ang meaning nito ay..... "NAGKAROON NG OBLIGATION
ang BUSINESS" na ibalik sa may-ari ang,
- mga "Investments" ng Owner
- at "Kinita" ng Business)
ACCOUNTING TUTORIAL - PART 7

1. CPA Board Exams

2. Career Fields in Accounting
3. Different Accounting Areas
4. Different Regulatory Bodies

1. CPA Board Exams

Q: SINO ang allowed mag-take ng Philippine CPA Board Exam?

A:

- Yung mga graduate sa course na BACHELOR OF SCIENCE IN ACCOUNTANCY

- Yung may GOOD MORAL CHARACTER

- Yung hindi napatunayang guilty ng "MORAL TURPITUDE" (like Adultery or Concubinage - pakikiapid)

- Filipino citizen.

Q: Tuwing KAILAN ginaganap ang CPA Board Exam?

A: Dalawang beses sa isang taon. May and October.

Q: Ilan at Ano ang mga SUBJECTS sa CPA board exam ?

A: 6 subjects

- RFBT (Regulatory Framework for Business Transactions)

- TAX (Taxation)

- MAS (Management Advisory Services)

- AUDITING (Auditing theory and Auditing problems)

- FAR (Financial Accounting and Reporting)

- AFAR (Advanced Financial Accounting and Reporting)

Q: Paano makapasa sa CPA board exam?

A: General weighted average of 75% and above

(with no grades below 65% in any subject)
Q: Anong mangyayari pag ang Gen. Ave. ay above 75%, ngunit may grade na below 65% sa ibang
subject(s)

A:

- CONDITIONAL if 75% and above ang at least 4 subjects (at ang uulitin na lang ay yung subjects na may
grade below 75%)

-FAILED if 3 subjects and below lamang ang 75% and above.

*Masasabing CONDITIONAL ang status ng isang examinee kapag 75% and above ang grade niya sa at
least 4 subjects (kahit na ZERO pa ang grade sa natitirang 2 subjects).

*Ang CONDITIONAL examinee ay kailangang mag-exam ulit para kunin ang di naipasang subject(s) within
2 years mula sa exam kung saan siya na-conditional.

2. Career Fields in Accounting

A. Public Accounting
B. Commerce and Industry / Private Accounting
C. Academe (Education)
D. Government Accounting

3. Different Accounting Areas

A. Basic Accounting / Bookkeeping

B. Financial Accounting
C. Managerial Accounting
D. Auditing
E. Cost Accounting
F. Government Accounting

4. Different Regulatory Bodies

A. PRC (professional Regulation Commission)

B. PRBOA (Professional Regulatory Board of Accountancy)

C. PICPA (Philippine Institute of Certified Public Accountants)

D. FRSC (Financial Reporting Standards Council)

E. IASB (International Accounting Standards Board)

ACCOUNTING TUTORIAL - Part 8

"ADJUSTING ENTRIES"

Q: What are the six (6) "Adjusting Entries" of a SERVICE business?

A:

1. Accrued expense
2. Accrued income (including "Accrued Service Income")
3. Prepaid expense
4. Unearned income (including "Unearned Service Income")
5. Depreciation expense
6. Doubtful accounts expense / Bad debt expense

PAALALA: "Basahin"
(Kahit wag munang unawain) 😃😃😃

Halos lahat yata ng nag-BASIC ACCOUNTING, ay sa topic na ito nahirapan.

PERO I WANT TO "CHALLENGE" YOU. Aralin mo na ito. Para pag tinuro na ni Teacher ay may baon ka
nang kaalaman at di ka na masyadong mahirapan.

Ngayon ay gagawa muna tayo ng "SUMMARY" ng lahat ng Adjusting Entries.

Sa mga susunod na tutorial (simula bukas) ay saka natin iisa-isahin ang bawat ADJUSTMENTS (1-6)

Okay lang ba sayo yun???

"YES" di ba?.. Wala ka namang magagawa eh. 😄😄😄

#GAME

Let me discuss the six (6) adjusting entries thru a STORY. 😊

Bumili ka ng "OFFICE BUILDING" worth P500.

Ang building na ito ay may dalawang rooms.

Room 1: Gagamitin sa "main business" mong tutorial.
Room 2: Vacant (bakante siya)
Next mong ginawa ay bumili ka ng isang CELLPHONE na worth P500 din.

Next ay pumunta ka sa 7 eleven para bumili ng PREPAID LOAD CARD worth P100.
Summary:
- OFFICE BUILDING P500
- CELLPHONE P500
- PREPAID LOAD CARD P100

Total: P1,100

Lahat ng ito ay ininvest mo sa itatayo mong "ACCOUNTING TUTORIAL business". 😊

(Date: January 1, 2018)

#START na ng business 😊

First: Ni-register mo muna yung PREPAID LOAD CARD sa iyong CELLPHONE.

Gagamitin mo ito para makahanap ng mga tuturuang STUDENTS (Text, Call and Surf)

TUTORIAL FEE: P120 per year

- STUDENT A: nag-advance payment siya ng P360 (good for 3 years). Dito ay nakatanggap tayo ng P360
cash

- STUDENT B: hindi muna nagbayad

- STUDENT C: hindi muna nagbayad

Maya-maya ay nilapitan ka ng isang kaibigan. Naghahanap daw siya ng mauupahan. Kaya ang ginawa
mo, pinagamit mo muna yung bakanteng ROOM 2 bilang room for rent.

Ang usapan, P60 kada taon ang upa. At makokolekta mo lang ang bayad at the END OF 2ND YEAR (60 +
60)

(Date: January 1, 2018)

SUMMARY (Jan. 1, 2018)

"ACCOUNTING TUTORIAL BUSINESS"

*"ASSETS":
- Office Building P500
- Cellphone P500
- Prepaid Expense (Load) P100
- Cash (advance from STUDENT A) P360
Note: ang "prepaid expense", gaya ng LOAD, ay "nabayaran na" "pero di pa nagagamit"

Total assets: (500 + 500 + 100 + 360)

= P1460

*"LIABILITY":
- Unearned income (advance from STUDENT A) P360

Note: ang "unearned income" ay isang liability. Utang siya kasi may natanggap kang P360 cash, ngunit
hindi mo pa natuturuan si Student A (wala pang service)

Kaya ang liability/utang (unearned income) mo kay Student A, ay ang pagtuturo or "service".

*"OWNER'S EQUITY":
- Capital (Investments) P1100

A = L + OE
1460 = 360 + 1100

BALANCE! Amazing!!!! 😃😃😃

"ITO NA ANG ADJUSTING ENTRIES"

Q: Ano naman ang mga pwede mong KITA makalipas ang isang (1) taon? (Date: December 31, 2018)

A:

1. "SERVICE INCOME"
Student A P120 (bayad na)®
Student B P120 (di pa rin bayad)
Student C P120 (di pa rin bayad)

STUDENT A: - "UNEARNED INCOME"

®Yung P360 worth of service (to be rendered in 3 years) ay tatanggalan na natin ng P120.

Ito ay dahil may "rendered services" na ngayong taon (1 year).

Kaya sa Dec 31, 2018, P240 na lang ang hindi pa natin nabibigay kay Student A na serbisyo.
(P240 na lang ang "unearned income")

Nakakasunod pa ba?

At the same time, kumita ka na rin ang tutorial business ng para sa unang taon, P120.
EFFECT:
mababawasan ang UTANG na service
madadagdagan ang INCOME

DEBIT: Unearned Service Income 120

CREDIT: Service Income 120

STUDENT B & C (ACCRUED SERVICE INCOME)

Ito ay ACCRUED INCOME(in general). Hindi mo pa nakokolekta ang cash, pero INCOME na siya dahil
nagturo ka na ng isang taon.

Pero mas tama na tawagin itong ACCRUED SERVICE INCOME dahil galing ito sa "main business" mo
(tutorial)

EFFECT:
-magkakaroon ka ng PAUTANG (Accounts Receivable)
-magkakaroon ka ng INCOME (Service Income)

DEBIT: Accounts Receivable 240

CREDIT: Service Income 240

(B + C) (120 + 120)

2. "RENT INCOME" P60 (di pa rin bayad)

Ito ay isang halimbawa ng ACCRUED INCOME na hindi nanggaling sa "main business" mong tutorial.

May rent income ka nang P60 ngayong YEAR 2018.

Ito ay galing sa ROOM FOR RENT kung saan nakatira na ang kaibigan mo ng isang taon. Kaya lang ay di
mo pa nakokolekta ang bayad as of Dec. 31, 2018 dahil ang usapan ay sa end of 2nd year pa ang bayaran
(Dec 31, 2019)

Year 2018 = P60 Rent Income (ACCRUED INCOME kasi di pa nakokolekta as of Dec. 31, 2018)

EFFECT:
-magkakaroon ka ng PAUTANG
-magkakaroon ka ng INCOME

DEBIT: Rent Receivable 60

CREDIT: Rent Income 60
Sa ibang mga libro, ganito ang ginagawa:
DEBIT: Accrued Rent Income 60
CREDIT: Rent Income 60

Note: Ang "Accrued Rent Income" ay isang RECEIVABLE account (Asset po siya)

Q: Ano naman ang mga pwede mong mga EXPENSES or GASTUSIN makalipas ang isang (1) taon? (Date:
December 31, 2018)

A:

1. DEPRECIATION EXPENSE - Office building

(pagliit ng halaga or "pagkaluma" dahil nagamit mo na ang "Office Building" ng isang taon)

EFFECT:
-magkakaroon ka ng EXPENSE
-mawawalan(ng value) ang OFFICE BUILDING

DEBIT: Depreciation expense

CREDIT: Accumulated depreciation

Note: Accumulated depreciation is a CONTRA-ASSET account. Kaya ang effect nito ay "bawas" sa Office
Building.

2. DEPRECIATION EXPENSE - Cellphone

(pagliit ng halaga or "pagkaluma" dahil nagamit mo na ang "Cellphone" ng isang taon)

DEBIT: Depreciation expense

CREDIT: Accumulated depreciation

3. LOAD EXPENSE
(yung gastusin mo sa text, call and surf)

~Ito ay Adjustment for PREPAID EXPENSE

Pag nagtext ka, yan ay NAPAGASTOS ka. Kasi nabawasan yung LOAD mo.

EFFECT:
-magkakaroon ka ng EXPENSE
-mawawalan/mababawasan ka ng PREPAID BALANCE

DEBIT: Load expense

CREDIT: Prepaid expense

4. UTILITIES EXPENSE (Meralco)

(yung gastusin mo sa "Electricity")

~Ito ay Adjustment for ACCRUED EXPENSE.

Ipagpalagay na di mo pa bayad ang electricity bill.

Na-consume na ang electricity sa office mo, pero di ba nababayaran.

EFFECT:
-magkakaroon ka ng EXPENSE (consumed electricity)
-magkakaroon ka ng UTANG

DEBIT: Utilities expense

CREDIT: Utilities payable

Sa ibang mga libro, ganito ang ginagawa:

DEBIT: Utilities expense
CREDIT: Accrued Utilities expense

Note: Ang "Accrued Utilities Expense" ay isang PAYABLE account (Liability po siya)

5. DOUBTFUL ACCOUNTS EXPENSE

(para sa student na hindi pa bayad, at maaaring "hindi na talaga magbabayad")

Candidate dito sina STUDENT B & C.

Ipagpalagay natin na si Student C ay lubos na naghihirap financially. Malaking posibilidad na hindi siya
makakabayad sa parating na due date.

EFFECT:
-magkakaroon ka ng EXPENSE
-mawawalan/mababawasan ang PAUTANG

DEBIT: Doubtful account expense

CREDIT: Allowance for doubtful accounts

Note: Allowance for doubtful accounts is a CONTRA-ASSET account. Kaya ang effect nito ay "bawas" sa
Accounts receivable.
ACCOUNTING TUTORIAL - PART 9

"ADJUSTING ENTRIES" - continuation

ACCRUALS

1. Accrued Expense

ADJUSTING ENTRY: 😊

Debit: _____ expense

Credit: _____ payable

(Amount: used)

2. Accrued Income

ADJUSTING ENTRY: 😊

Debit: _____ receivable

Credit: _____ income

(Amount: earned)

DEFERRALS

3. Prepaid Expense

A. ASSET Method

Original Entry:

Debit: Prepaid _____

Credit: Cash

(Amount: total)

ADJUSTING ENTRY: 😊

Debit: _____ expense

Credit: Prepaid _____

(Amount: used portion)

B. EXPENSE Method

Original Entry:

Debit: _____ expense

Credit: Cash

(Amount: total)

ADJUSTING ENTRY: 😊

Debit: Prepaid _____

Credit: _____ expense

(Amount: unused portion)

~~~~~~~~~~

4. Unearned Income (or Deferred Income)

a. LIABILITY Method

Original Entry:

Debit: Cash
Credit: Unearned _____

(Amount: total)

ADJUSTING ENTRY: 😊

Debit: Unearned _____

Credit: _____ income

(Amount: earned portion)

**

b. INCOME Method

Original Entry:

Debit: Cash
Credit: _____ income
(Amount: total)

ADJUSTING ENTRY: 😊

Debit: _____ income

Credit: Unearned _____

(Amount: unearned portion)

5. Depreciation

ADJUSTING ENTRY: 😊

Debit: Depreciation expense - _____

Credit: Accumulated depreciation - _____

FORMULA: (straight line method)

Cost - Salvage Value / Useful life = Depreciation Expense per year

6. Doubtful Accounts (or Bad debts)

ADJUSTING ENTRY: 😊

Debit: Doubtful accounts expense

Credit: Allowance for doubtful accounts

FORMULA:
(Accounts Receivable x % uncollectible ) = Allowance for doubtful accounts or ADA

ADA +(-) "some adjustment" = Doubtful accounts expense

("some adjustment" means: write-off, beginning balance of ADA, etc)