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Accounting Tutorial
Accounting Tutorial
Accounting Tutorial
a. BUSINESS = "Ikaw"
b. ASSET = Pag-aari "ng business"
c. LIABILITY = Utang "ng business" sa iba (Ex. Bank)
d. OWNER'S EQUITY = "Utang" "ng business" sa may-ari (owner)
#CommonMistake
Ang "Business" at ang "Owner" ay IISA..
*MALI po yan. Para maintindihan natin ang Accounting Equation (A=L+OE), ang
una dapat nating isipin ay magkaiba ang "BUSINESS" at ang "OWNER"
#HALIMBAWA
BUSINESS(Ikaw) = Buy & Sell ng damit
~kung ikaw si BUSINESS, kailangan mo ng "pera" pambili ng damit.
#QUESTION
Saan manggagaling ang pera?
Answer:
a. Mangungutang sa iba (Ex. Bank) P60
b. "Mangungutang" sa may-ari or owner P40
P60 + P40 = P100
Ang pera na ngayon ni "Business" ay P100
Business:
A = P100 (Pera/Asset)
L = P60 (Utang sa Bank)
OE = P40 ("Utang" sa Owner)
In simple words, ang Pera ng Business na P100 (ASSET):
~ay galing sa utang sa Bank P60 (LIABILITY), at galing sa "utang" sa Owner P40
(OWNER'S EQUITY)
A = L + OE
P100 = P60 + P40
#REMINDER
~In Form, parang ISA lang ang "Business" at "Owner"
~Pero in Substance, IKAW lang si " BUSINESS" (at "parang" pinautang ka lang ng
sarili mo)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"DEBIT AND CREDIT"
1. Bumili ka ng Laptop at nagbayad ka ng P50000
DEBIT: Laptop 50000
CREDIT: Cash 50000
Nagkaroon ka ng Laptop, kaya DEBIT
Nawalan ka naman ng Cash, kaya CREDIT
NOTE: (ASSET)
Pag "nagkakaroon" ka ng Asset(or bagay) = DEBIT
Pag "nawawalan" ka ng Asset (or bagay) = CREDIT
..............................................
2. Bumili ka ng Laptop pero utang, P50,000
DEBIT: Laptop 50000
CREDIT: Accounts Payable 50000
Nagkaroon ka ng Laptop, kaya DEBIT
Nagkaroon ka ng utang(Accounts Payable), kaya CREDIT
NOTE: (LIABILITY or UTANG)
Pag "nagkakaroon" ka ng utang = CREDIT
Pag "nawawalan" ka ng utang = DEBIT
#IMPORTANT
Baliktad ang ASSET at LIABILITY
(ASSET)
DEBIT: pag "nagkakaroon" ka ng Asset(or bagay)
CREDIT: pag "nawawalan" ka ng Asset (or bagay)
(LIABILITY)
CREDIT: pag "nagkakaroon" ka ng utang
DEBIT: pag "nawawalan" ka ng utang
..............................................
3. Binayaran mo na ang utang..
DEBIT: Accounts Payable 50000
CREDIT: Cash 50000
Nawala na ang utang (Accounts Payable), kaya DEBIT.
Nawalan ka din ng Cash, kaya CREDIT.
*Yehey, wala nang utang. :)
..............................................
4. Ginamit mo yung Laptop sa business mong Accounting Tutorial. Kumita ka ng
P20,000 pero "pautang".
DEBIT Accounts Receivable 20,000
CREDIT Service Income 20,000
Nagkaroon ka ng "pautang"(Asset siya kasi makokolekta mo siya), kaya DEBIT
Nagkaroon ka din ng kita o income, kaya CREDIT.
NOTE: (INCOME or KITA)
Pag "nagkakaroon" ka ng income = CREDIT
..............................................
5. Nakolekta mo na yung pautang mo sa tinuruan mong estudyante P20,000.
DEBIT Cash 20000
CREDIT Accounts Receivable 20000
Nagkaroon ka ng Cash, kaya DEBIT
Nawalan ka ng pautang(Accounts Recevable), kaya CREDIT
...............................................
6. Nagbayad ka ng P10,000 sa inuupahan mong lugar para sa tutorial.
DEBIT Expense 10000
CREDIT Cash 10000
Nagkaroon ka ng gastos(expense), kaya DEBIT
Nawalan ka din ng cash, kaya CREDIT.
NOTE: (EXPENSE or GASTOS)
Pag "nagkakaroon" ka ng gastusin = DEBIT
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Point of view of the BUSINESS:
Increase in Asset
Nagkakaroon ng asset ang business kasi pwedeng
-nanggaling sa inutang niya (ito ang pautang or investment ng creditors)
-nanggaling sa owner (ito ang initial or additional investment ng owner)
-galing sa serbisyo/benta
Decrease in Asset
Nawawalan naman ng asset ang business kasi pwedeng
-nagbayad siya ng utang
-ibinalik na yung capital sa owner (withdrawal by the owner)
-may mga gastusin o expenses
Equity/Capital = Investment + Revenue - Expenses - Drawings(Withdrawal)
Increase in Equity
-Tumataas ang Equity pag mas malaki ang kita(revenue) kaysa sa
gastos(expenses). Ang tawag dito ay "Net Income".
-Pwede rin tumaas ang Equity pag nadadagdagan ang capital(pera o gamit) ng
business.
Decrease in Equity
-Bumababa ang Equity pag mas malaki ang gastos(expenses) kaysa sa revenue
or kita. Ang tawag dito ay "Net Loss".
-Pwede rin bumaba ang Equity pag ibinalik na ang capital(pera o gamit) sa may-
ari. (Withdrawal by the owner)
Normal Balances:
DEBIT (DEAL)
D-ividends (Drawings)
E-xpenses
A-sset
L-osses
CREDIT (GIRLS)
G-ains
I-ncome
R-evenues
L-iabilities
S-tockholder's (or Owner's) Equity
(c) Admin/Tutor Michael
#Part2 tomorrow 😊
Tip:
"Don't MEMORIZE, INTERNALIZE" 😊
~~~~~~~~~~~~~~~~~~~~
Topic: "ASSETS"
~~~~~~~~~~~~~~~~~~~~
#REVIEW
Assets = Liabilities + Owner's Equity
CHARACTERS" :)
a. BUSINESS = "Ikaw"
b. ASSET = Pag-aari "ng business"
c. LIABILITY = Utang "ng business" sa iba (Ex. Bank)
d. OWNER'S EQUITY = "Utang" "ng business" sa may-ari (owner)
Tinawag po nating "Utang" or "Obligation" ang Owner's Equity/Capital dahil ang
point of view natin ay si "Business"
Dahil na kay BUSINESS ang mga ininvest/contributions/puhunan ni Owner,
parang may "Utang" si BUSINESS dahil may "obligation" siyang ibalik ang mga
yan sa may-ari/owner.
Again, our POINT of VIEW is the "Business" (not the owner po)
**
Magkaiba/hiwalay ang "Business" at "Owner" ("Entity" Concept)
1. Business = as if an "Artificial being" (our POINT OF VIEW)
2. Owner = Human being
~~~~~~~~~~~~~~~~~~~~~~~
#START
~~~~~~~~~~~~~~~~~~~~~~~
ASSETS:
A. Current Assets:
-Cash
-Trading Securities (Marketable Securities) (Fair value through Profit or Loss)
(Short-term Investment)
-Accounts Receivable
-Allowance for Doubtful Accounts (Allowance for Bad debts)
-Notes Receivable
-Merchandise Inventory*
-Accrued "_____" Income
-Prepaid Expenses
a. (Supplies/Office Supplies/Store Supplies*)
b. (Prepaid Rent, Prepaid Salaries, etc.) - ang keyword ay "PREPAID"
-Advances "TO" Employess (Advances to Suppliers*)
-Other "current" assets
B. Noncurrent Assets
-Land
-Building
-Machinery and Equipment
-Furniture & Fixtures
-Accumulated Depreciation
-Intangible Assets
-Other "noncurrent" assets
....................
Ang ASSET ay nahahati sa dalawang classifications.
1. "Current" Assets
2. "Noncurrent" Assets
CURRENT = SHORT-TERM (generally, "1 year or less").
NONCURRENT = LONG-TERM (generally, "more than 1 year")
*Siyempre, pag sinabing "general", may exception. Ibig sabihin, pwedeng hindi
masunod yung guide na "1 YEAR"
(dahil may tinatawag tayong "Normal operating cycle")
~~~~~~~~~~~~~~~~~~~~~~~~~~
Q: ANO BA ANG MGA HALIMBAWA NG "CURRENT ASSETS"?
ANS:
Current Assets:
-Cash
-Trading Securities (Marketable Securities) (Fair value through Profit or Loss)
(Short-term Investment)
-Accounts Receivable
-Allowance for Doubtful Accounts (Allowance for Bad debts)
-Notes Receivable
-Merchandise Inventory*
-Accrued "_____" Income
-Prepaid Expenses
a. (Supplies/Office Supplies/Store Supplies*)
b. (Prepaid Rent, Prepaid Salaries, etc.) - ang keyword ay "PREPAID"
-Advances "TO" Employess (Advances to Suppliers*)
-Other "current" assets***
**
1. "CASH"
A = L + OE
100 =60 + 40
Si Business(Ikaw) ay may perang P100 ngayon.
(P60, utang sa bank)
(P40, utang sa owner)
Ano ang tawag sa P100?
Yan po ay CASH.
CASH = P100
*"CURRENT asset" siya, kasi pwede mo gastusin "anytime" (1 year or less)
**
2. "ACCOUNTS RECEIVABLE"
ASSUME: Ang "line of busines" mo ay "pagpapautang"
Ngayon, si Business ay nilapitan ng isang kaibigan. Ang sabi niya sayo ay..
"Business, pwedeng "PAUTANG"?
Dahil may P100 Cash ka, ang sabi mo ay " Sige, pauutangin kita.
At yun ang nangyari. Inabot mo ang P100 sa kanya at walang natira sa iyo.
Tanong: Magkano na ang asset mo? Zero o P100 pa rin?
Sagot: P100 pa rin.
Oo, nawala yung P100 kaya parang walang asset. Pero nagkaroon ka naman ng
"PAUTANG". Ang pautang ay hindi nahahawakan pero asset mo pa rin siya.
Ang tawag sa PAUTANG na yan ay "ACCOUNTS RECEIVABLE". Receivable kasi
may "mare-receive" kang bayad o pera.
**
3. "ALLOWANCE FOR DOUBFUL ACCOUNTS"
May experience ka dati na laging "kalahati" lang kung magbayad itong kaibigan
mo (Mabait ka lang talaga kaya lagi mo siyang pinapautang).
TAKE NOTE: Hindi pa siya nagbabayad sa inutang niyang P100.
Pero iaanticipate mo na yung hindi niya mababayaran. Ang tawag dito ay
"Allowance for Doubtful Accounts". Iaanticipate or ire-record mo nang
"Allowance for Doubtful Accounts" yung kalahati na P50 (P100/2=P50)
Simple Math lang ang accounting di ba? pa divide-divide ka lang. :)
SUMMARY:
Pautang (Accounts Receivable-AR) P100
Anticipated na di babayaran (Allowance for Doubtful Accounts-ADA) P50
P100(AR)-P50(ADA)
= P50 (ito na lang ang sa tingin mong makokolekta mo sa future). In Accounting,
"NRV or Net Realizable Value" ang tawag dito.
Ang ACCOUNTS RECEIVABLE (or Pautang) ay pwede ring manggaling sa
"services rendered", na hindi mo pa nakokolekta yung bayad ng client or
customer mo.
**
5. "TRADING SECURITIES" (Marketable Securities) (Fair value through Profit or
Loss) (Short-term Investment)
Si Business(IKAW) ay may P100 ngayon
Ang P100 ay ININVEST.
Pag sinabing ininvest, parang "PAUTANG" din yan. Ipapahawak mo muna sa iba
yung pera mo para kumita or madagdagan (Take note: pwede rin na mabawasan)
Pwede ka mag-invest(or magpautang) sa dalawang ito.
~DEBT Securities (dito, pwede madagdagan ang pera mo ng tinatawag na
"INTEREST")
~EQUITY Securities (dito, pwede madagdagan ang pera mo ng tinatawag na
"DIVIDEND" and "PRICE APPRECIATION)
Example:
Nag-invest ka ng P100. So nawalan ka ng P100.
After ng ilang buwan, binawi mo na yung pera at naging P120.
Paki compute. Magkano po ang sobra?
P120-P100=P20
Ang tawag po sa sobrang P20 ay INTEREST(pag debt security), or
DIVIDEND/PRICE APPRECIATION(pag equity security)
*Simple Illustration lang po ito :)
Nung mga oras na inabot mo yung bayad sa cashier, nawalan ka ng P100 Cash.
Pero nagkaroon naman ng P100 load ang celllphone mo.
Ano yung tawag sa P100 load.
*Answer: Prepaid Expense
PREPAID EXPENSE:
~PAID but not yet incurred.
"Bayad na" pero "di pa nagagamit"
Paano kung nagtext ako at nabawasan ng Piso?
~Ang PREPAID EXPENSE mo ay P99 na lang (P100-P1)
In short, ang PREPAID EXPENSE ang yung amount ng load na "HINDI MO PA
NAGAGAMIT".
~Ganun din pag bumili ka ng ballpen, pencil, or yung mga nabibiling "SUPPLIES"
sa NATIONAL BOOKSTORE, "Prepaid Expense" din ang tawag dun.
**
8. "ADVANCES TO EMPLOYEES"
P100, pinautang sa empleyado. Ang pambayad ay ibabawas na lamang sa
kanyang sweldo.
Ang tawag: ADVANCES TO EMPLOYEES
**
9. "NOTES RECEIVABLE"
P100, pinautang pero may kasulatan (PROMISSORY NOTE)-at kumikita ng
"INTEREST.
Ang tawag: Notes Receivable
**
10. "ACCRUED INCOME"
Nagpapaupa ka(ikaw ang may-ari) ng isang room for rent.
Ang paupa mo ay P100 per month.
Walang ka pang natatanggap na pera kahit magkano(Advance man or Deposit)
Lumipas ang isang buwan. May kinita ka nang P100 para sa isang buwang upa.
Pero hindi mo pa natatanggap yung pera.
Kumita ka na, Pero hindi pa natatanggap yung pera.
Ang tawag: ACCRUED INCOME
(Earned but not yet received)
Kumita na, hindi pa natatanggap yung pera
*Ito po ay isang uri din ng RECEIVABLE (Parang ACCOUNTS RECEIVABLE) dahil
may "mare-receive" kang pera.
~~~~~~~~~~~~~~~~~~~~~~~~
#NEXT TOPIC
Ang next topic ay NONCURRENT ASSETS.
Q: ANO BA ANG EXAMPLES NG NONCURRENT ASSETS
ANS:
PROPERTY, PLANT AND EQUIPMENT or PPE (or FIXED ASSET)
-Land
-Building
-Machinery and Equipment
-Furniture & Fixtures
-Accumulated Depreciation(Building)
-Accumulated Depreciation(Machinery & Equipment
-Accumulated Depreciation(Furniture & Fixtures)
(Take note: walang Accumulated Depreciation-Land)
OTHERS:
-Intangible Assets
-Other "noncurrent" assets
**
Ang Noncurrent Asset ay Long-term.
**NONCURRENT = LONG-TERM (generally, "more than 1 year")
Kaya siya "Long-term" kasi
-matagal ang buhay niya and/or
-matagal mo siya pwedeng magamit or mapakinabangan
**
1. "LAND"
Ito ang "FAVORITE asset" ko kasi ang ganda ng meaning niya.
L-A-N-D
L-ove (of GOD)
A-lways "Appreciate" And
N-ever
D-epreciate :)
Pinapaalala lang namin sayo na wag mong kalimutan si God. Alam mo ba na alam
Niya ang lahat ng sakripisyo mo?
Naniniwala kami na lahat ng magaganda at di magagandang nangyayari sa buhay
mo ay nakadisenyo. Disenyo na kailangan mong pagdaanan para "makumpleto"
ka. 😊
Example:
Alam mo yung "PUZZLE" di ba?
Nilalaro ko ito nung bata ako. Pinagdidikit-dikit ko yung mga piraso para mabuo
ang magandang larawan.
Ganun din si God sayo. Ang mga piraso ay yung magaganda at di magagandang
nangyayari sa buhay mo. Na kailangan mong maranasan, para sa dulo ay maging
"magandang larawan" ka. Maging SUCCESSFUL ka. :)
**
YOU: Sir.. di po ako maka-relate. SINGLE pa po eh
ME: Edi JOWAin mo muna si ACCOUNTING 😄 😄 😄
~~~~~~~~~~~~~~~~~~~~
#START
Simulan natin sa "OWNER'S EQUITY"
- INITIAL INVESTMENT by the owner
- ADDITIONAL INVESTMENT by the owner
- REVENUE / INCOME of the business
- EXPENSES of the business
- DRAWINGS / WITHDRAWAL by the owner
Isa-isahin natin yan mamaya. 😊
~~~~~~~~~~~~~~~~~~~~
"BASIC" ACCOUNTING EQUATION
A = L + OE
Assets = Liabilities + Owner's Equity
P100 = P60 + P40
**
"Ibahin" natin ang EQUATION
A - L = OE
Assets - Liabilities = Owner's Equity
P100 - P60 = P40
Nasundan ba?
**
Ang ibig sabihin nito ay:
Sa ASSETS na P100,
"priority" na mabayaran muna ang LIABILITIES sa Creditors na P60.
Kaya ang matitira na lang para sa OWNER ay P40.
**
Kung hahatiin or ibi-break down natin yung natira sa owner na P40, ito po ay ang
mga sumusunod (1 to 5):
(PERO this time, let us change our POINT OF VIEW)
(Isipin mo naman ngayon na IKAW ang "OWNER")
(Gagawin lang natin 'to para mas madali mong maunawaan)
Kung ikaw si OWNER, tanungin mo lang ang sarili mo:
"Kung ihihinto ko na ang Business ko, ano kaya ang mababawi ko galing sa
business ko?
1. "INITIAL INVESTMENT" by the owner.
Nang magtayo ka ng negosyo, yan ang kauna-unahang binigay mong puhunan.
Pwedeng pera, pwedeng gamit, etc. Investments or contributions mo ito "before
operations"
2. "ADDITIONAL INVESTMENT" by the owner.
Dagdag-puhunan. Binigay mo ito "during operations".
Maaaring sa unang taon ay sobrang dami agad ng customers mo kaya naman
nagdagdag ka ng puhunan. Yung dagdag-puhunan na yan ay ginawa mo "during
operations" ng business mo.
*
3. "REVENUE" or "INCOME
"Kita" ng business mo
4. "EXPENSES"
"Gastusin" ng business mo
Sa 3 & 4, ang dapat na goal ay mas malaking REVENUE kaysa EXPENSE.
Example:
a) Revenue - Expense = Net INCOME
20 - 15 = 5
b) Revenue - Expense = (Net LOSS)
15 - 20 = -(5)
(between the two, better ang Net INCOME)
Simple MATH lang ang Accounting di ba? 😄
*
5. "DRAWINGS / WITHDRAWAL" of the owner
Parang sa ATM card. Pag nagwithdraw ka, may kinuha ka
DRAWINGS or Temporary withdrawal - ito ang tawag pag ang kinuha mo ay yung
KITA ng business mo (Net INCOME)
PERMANENT WITHDRAWAL - ito ang tawag pag ang kinuha mo ay ang
INVESTMENT mo (yung 1 & 2)
~~~~~~~~~~~~~~~~~~~~
EXAMPLE:
Initial investment P50
Additional investment P30
Revenue 20
Expenses 15
Drawings 45
*
Q: How much ang NET INCOME
A: Revenue - Expenses = Net Income
20 - 15 = 5
Answer is 5
*
Q: How much ang OWNER'S EQUITY?
A: Beginning Capital(Initial investment) + Additional investment + Net income -
Drawings = Ending Capital (Owner's equity)
50 + 30 + 5 - 45 = P40
Answer is P40.
*YUNG P40, yan na lang ang portion ng asset na pwedeng MABAWI ng owner.
**
Supposedly, ang "mababawi" niya dapat ay yung INITIAL AND ADDITIONAL
INVESTMENT niya (50+30) at yung NET INCOME ng business (5).
50 + 30 + 5 = 85.
Kaya lang, may "actual" DRAWINGS siyang P45.
Kaya ang natira na lang is 40 (85-45).
*GRABE na 'to.. Plus(+) Minus(-) lang pala ang Accounting 😄
DEBIT (DEAL)
D-ividends (Drawings)
E-xpenses
A-sset
L-osses
CREDIT (GIRLS)
G-ains
I-ncome
R-evenues
L-iabilities
S-tockholder's (or Owner's) Equity
*
(Normal Balance) - ADE & LOR 😊
DEBIT (ADE)
A - sset
D -rawings
E - xpense
CREDIT (LOR)
L - iabilities
O - wner's equity
R - evenue
~~~~~~~~~~~~~~~~~~~~~~~~
*For DECREASES, just do the "OPPOSITE"
24. DECREASE in ASSET..... CREDIT
25. DECREASE in LIAB..... DEBIT
26. DECREASE in OE..... DEBIT
27. DEREASE in INCOME..... DEBIT
28. DECREASE in EXPENSE..... CREDIT
29. DECREASE in OWNER'S DRAWING..... CREDIT
DECREASE in CONTRA-ASSET..... DEBIT
30. What is the "NORMAL BALANCE" of Cash, Trading Securities, Accounts
Receivables, Notes Receivables, Accrued Income, Supplies, Prepaid Expense,
Land, Building, Machinery & Equipment, Furniture & Fixtures..... DEBIT
31. What is the "NORMAL BALANCE" of Accounts Payable, Notes Payable,
Accrued Expense, Unearned Income, Bonds Payable, Mortgage Payable.....
CREDIT
32. What is the "NORMAL BALANCE" of Owner's Capital, Revenue or Income.....
CREDIT
33. What is the "NORMAL BALANCE" of Owner's Drawing, Expense..... DEBIT
34. What is the "NORMAL BALANCE" of Allowance for Doubtful Accounts,
Accumulated Depreciation..... CREDIT*
*CREDIT, because they are contra-assets
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Definitions, Classifications and Examples of Accounts
I.
-REAL accounts (or PERMANENT accounts)
The real accounts are
-Assets
-Liabilities and
-Owner’s Equity/Capital
Real accounts are reported in the Statement of Financial Position(or "BALANCE
SHEET"). They are not "closed" at the end of accounting period.
---------------------------------------------------------------
-NOMINAL accounts (or TEMPORARY accounts)
The nominal accounts are
-Income/revenues
-Expenses and
-Owner’s Drawing
Nominal Accounts are those that comprise the elements of the Statement of
Financial Performance (or INCOME STATEMENT) – the revenue and expenses
accounts.
These accounts are called temporary because they are "closed", or put into zero
balance, at the end of the accounting period.
*Please note that Owner’s Drawing is NOT an income statement account, but
must also be closed, or put into zero balance, at the end of the accounting
period.
---------------------------------------------------------------
SUMMARY:
REAL accounts (or PERMANENT accounts)
-Assets
-Liabilities
-Owner’s Equity
NOMINAL accounts (or TEMPORARY accounts)
-Income/revenues
-Expenses and
-Owner’s Drawing
---------------------------------------------------------------
II.
The REVENUE Accounts
Revenue represents the earnings of the business from sales of goods or service
rendered.
Revenue accounts have normal CREDIT balance.
Below are some common revenue accounts:
Sales – an account used to summarize sale of goods of a trade or
merchandising business. This includes cash sales and sales on account.
Service Income – the earning derived from service rendered by a servicing
business to its customers. This includes cash and on account service.
Professional Fees – the earning derived from services rendered by a
professional or professional servicing firm which could be in cash or in
collectibles to its clients.
Interest Income – the earning representing the time value of money derived
from promissory notes received by the business, whether in cash or collectibles
in the future.
Rent Income – the income earned from allowing others to use property or
facility of the business.
Gain on Sales of other Assets – the income derived from the sales of assets
used in the business operation. There is a gain on sale if the proceeds exceed
the book value or cost of disposed asset. Examples are gain on equipment, gain
on sale investments, gain on sale of land, etc.
Others
---------------------------------------------------------------
The EXPENSES Account
Expenses are cost incurred in conducting the business activities. Expense
accounts have normal DEBIT balances. Some common expense accounts are as
follows:
Cost of Sales – the value of merchandise sold
Supplies Expense – the amount of supplies consumed or used by the business
during the period. Examples: used in papers, inks, ballpoint pens, etc.
Salaries and Wages Expenses – the amount paid to service rendered by the
employees in the operation of the business
Insurance Expense – the amount of insurance policy incurred during the current
period. Examples: premiums on building insurance, life insurance, plant
insurance, etc.
Taxes and Licenses Expenses – the cost of local as well as national taxes that
are incurred and required to be paid in connection with the conduct of the
business.
Example: Cost to acquire mayor’s permit, registration cost of the building,
percentage tax on sales, etc.
Others
"Estimated Expense"
Doubtful Account Expenses – the estimated amount of losses the uncollectible
accounts arising from credit sales of the current period. This is also called the
debt expense or uncollectible account expense.
Depreciation Expense – represents the current periodic cost for using
depreciable plant assets. In accordance with the systemic cost of depreciable
asset should be allocated as expense over its useful life.
Others
---------------------------------------------------------------
SUMMARY:
Revenue
-Sales
-Service Income
-Professional Fees
-Interest Income
-Rent Income
-Gain on Sales of other Assets
-Others
Expenses
-Cost of Sales
-Supplies Expense
-Salaries and Wages Expenses
-Insurance Expense
-Taxes and Licenses Expenses
-Doubtful Account Expenses
-Depreciation Expense
-Others
#Part5 tomorrow 😊
"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. 😊
~~~~~
ASSET:
~nagkaroon (CASH and OFFICE EQUIPMENT)
OWNER'S EQUITY
~nagkaroon (INVESTMENT ng Owner)
Ang business ay nawalan ng ASSET, dahil sa EXPENSES.
~~~~~
ASSET:
~nawalan (CASH)
OWNER'S EQUITY
~nawalan ("EXPENSES" or gastusin ng business)
~~~~~
ASSET:
~nagkaroon (OFFICE BUILDING 500,000 "minus" CASH 250,000 = 250,000)
LIABILITIES
~nagkaroon (MORTGAGE PAYABLE)
4. Wala pang nasisimulang trabaho, kaya wala pa din dapat expense para sa sweldo ng
secretary.
5. Ang "business" ay nagkaroon ng ASSET na Furniture and Fixture, ngunit hindi pa niya
ito nababayaran. LIABILITY pa.
~~~~~
ASSET:
~nagkaroon (FURNITURE AND FIXTURES)
LIABILITIES
~nagkaroon (ACCOUNTS PAYABLE)
Ang "business" ay nagkaroon ng ASSET (or PAUTANG) galing sa rendered services
(Service INCOME)
~~~~~
ASSET:
~nagkaroon (Pautang or ACCOUNTS RECEIVABLE)
OWNER'S EQUITY
~nagkaroon (kita or SERVICE INCOME)
Ang "business" transaction na ito ay walang epekto sa TOTAL ASSETS.
~~~~~
ASSET:
~nagkaroon (OFFICE SUPPLIES, 4,500)
4,500 - 4,500 = 0
Ang "business" ay nawalan ng LIABILITY kasi binayaran na niya. Nawalan din siya
ng ASSET dahil nagbigay siya ng Cash.
~~~~~
LIABILITY:
~nawalan (utang or ACCOUNTS PAYABLE)
ASSET:
~nawalan(Cash)
Ang "business" ay nawalan ng ASSET (Cash and Office supplies) dahil nag-WITHDRAW
ang owner.
~~~~~
ASSET:
~nawalan (CASH and OFFICE SUPPLIES)
OWNER'S EQUITY
~nawalan (DRAWINGS ng Owner)
~~~~~
ASSET:
~nawalan (CASH)
OWNER'S EQUITY
~nawalan ("EXPENSES" or gastusin ng business)
~~~~~
ASSET:
~nagkaroon (CASH)
OWNER'S EQUITY
~nagkaroon (kita or SERVICE INCOME)
Ang "business" transaction na ito ay walang epekto sa TOTAL ASSETS.
ASSET:
~nagkaroon (CASH, 10,000)
10,000 - 10,000 = 0
Same explanation in #7. 😊
Same explanation in #7. 😊
Same explanation in #10.
~~~~~~~~~~~~~~~~~~~~
#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". 😊
~~~~~~~~~~~~~~~~~~~~
~~~~~~~~~~~~~~~~~~~~
"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.
👍 👍 👍
~ Admin/Tutor Michael