Documente Academic
Documente Profesional
Documente Cultură
NCIII
BOOKKEEPING
PRACTICE SET
2|Page
Terms of transactions
Merchandise may be purchased and sold either on credit terms or for cash on delivery. When goods are sold
on account, a period of time called credit period is allowed for payment. If the credit period is 30 days, then
the payment is expected within 30 days from the invoice date. It is usually described as net credit period or
net terms noted as “n/30”.
Some businesses also give discounts called cash discount/ purchase discount. It is noted as “2/10” which
means the buyer may avail 2% (numerator) discount if the invoice is paid within 10 days (denominator) from
the invoice date.
Transportation Cost
Commonly used Shipping terms:
FOB-D - S
FOB Destination- the seller bears the shipping cost
FOB-SP - B
FOB Shipping Point- the buyer shoulders the shipping cost FC - B
Freight Collect- the buyer pays the shipping cost FP - S
Inventory Systems
PERPETUAL INVENTORY SYSTEM
The inventory account is continuously updated. At the time of sale, the cost of sales is determined and
recorded by a debit to the cost of sales account and a credit to inventory account.
PERIODIC INVENTORY SYSTEM
No entries are made to the inventory account as the merchandise is bought and sold. When Goods are
purchased, a separate set of accounts – purchases, purchases discounts, purchases returns and allowances,
and transportation in – is used to accumulate information on the net cost of the purchases.
Under this method, you are required to prepare a “Cost of Goods Sold Schedule”.
The following Chart of Accounts are used by SV Merchandising Store: using the
Perpetual Method
101 Cash 400 Sales
110 Accounts Receivable 410 Sales Discounts
120 Supplies 420 Sales Returns and Allowances
130 Merchandise Inventory 500 Cost of Sales
140 Office Equipment 610 Salaries Expense
210 Accounts Payable 620 Freight Out
220 Notes Payable 630 Advertising Expense
310 Villa, Capital 640 Rent Expense
320 Villa, Drawings 650 Utilities Expense
330 Income Summary
The following Chart of Accounts are used by SV Merchandising Store: using the
Periodic Method
101 Cash 400 Sales
110 Accounts Receivable 410 Sales Discounts
120 Supplies 420 Sales Returns and Allowances
130 Inventory 510 Purchases
140 Office Equipment 520 Purchases Discounts
210 Accounts Payable 530 Purchases Returns and Allowances
220 Notes Payable 540 Freight In
310 Villa, Capital 610 Salaries Expense
320 Villa, Drawings 620 Freight Out
330 Income Summary 630 Advertising Expense
640 Rent Expense
650 Utilities Expense
Serenity Villa opened SV Merchandising Store. The following transactions occurred during the
month of July 2018:
1-
Jul Villa invested P128,000 in the business.
2 Acquired Computer Set for P21,000. Villa paid 5,000 and issued a promissory note for
the remaining balance.
2 Acqired supplies for cash, P1,200.
3 Purchase P81,900 of merchandise from LOWKEY company on account.
Terms: FOB Destination, 2/10, n/30.
5 Sold merchandise to THORE for P48,600 on account.
Terms: FOB Destination, 2/10, n/30.
The cost of merchandise sold was P28,880.
Paid P550 freight on the same day.
7 Received collections from customers billed on sales of P48,600 on July 5.
9 Returned merchandise purchased from LOWKEY Company, P380.
11 Paid the amount due from July 3 transactrion.
13 Purchase merchandise P12,300 and additional supplies P450 for cash.
15 Paid 15th month salary, P8,000.
16 Received refund for poor quality of merchandise from a supplier on cash purchase
made on July 13, P870.
18 Sold merchandise to various customers, P24,300.
The cost of merchandise is P16,500.
19 Purchase 15,800 of merchandise from Eleonor Shop.
FOB Shipping point, terms, 2/10, n/30.
23 Receive sales returns, P3,800 from various customers. It's cost is P2,900.
24 Borrowed money from Town Bank, signed promisory note for P13,500.
24 Paid freight on July 21 purchase, P580.
26 Sold merchandise on account for P36,800 terms, 2/10, n/30 FOB Destinaton. The
merchandise sold had a cost of P21,300.
28 Serenity Villa withdrew cash from the business, P9,000.
30 Paid Eleonor Shop in full.
31 Paid Salary to employees, P8,000.
31 Paid News Hub for 1 month advertisement of the store, P1,580.
31 Paid Rent and Utilities expenses for the month, P2,800 and P700 respectively.
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GJ-3
26
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GJ-4
Closing Entries
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Date Account Title and Explanation PR Debit Credit
31-Jul
31
31
31
Account Name:
SALES
Account No. 400 Balance
Date Particulars Post Debit Credit Debit Credit
SV Merchandising Store
Trial Balance
31-Jul-18
Perpetual
Acct. # Account Title Debit Credit
SV Merchandising Store
Statement of Financial Performance
For the month ended July 31,2018
Perpetual
14 | P a g e
SV Merchandising Store
Statement of Changes in Equity
For the month ended July 31,2018
Perpetual
SV Merchandising Store
Statement of Financial Position
July 31,2018
Perpetual
ASSETS
Current Assets
15 | P a g e
LIABILITIES AND OWNER'S EQUITY
SV Merchandising Store
Statement of Cash Flow
July 31,2018
Perpetual
SV Merchandising Store
Post-closing Trial Balance
July 31,2018
Perpetual
Acct # Account Title Debit Credit
16 | P a g e
2
2
3
5
5
7
9
11
GJ-2
13
15
18 | P a g e
16
18
19
23
24
24
26
28
30
GJ-3
31
31
31
19 | P a g e
GJ-4
Closing Entries
Post
Date Account Title and Explanation Ref. Debit Credit
31-Jul
20 | P a g e
31
31
31
31
SV Merchandising Store
Trial Balance
31-Jul-18
Periodic
Acct. # Account Title Debit Credit
26 | P a g e
SV Merchandising Store
Statement of Financial Performance
For the month ended July 31,2018
Periodic
SV Merchandising Store
Cost of Goods Sold Schedule
27 | P a g e
SV Merchandising Store
Statement of Changes in Equity
For the month ended July 31,2018
Periodic
SV Merchandising Store
28 | P a g e
SV Merchandising Store
Statement of Cash Flow
July 31,2018
Periodic
29 | P a g e
SV Merchandising Store
Post-closing Trial Balance
July 31,2018
Periodic
Acct. # Account Title Debit Credit