Scribd Logo
Upload

Welcome to Scribd!

  • PH Accountancy Guide Random Topics PDF

    Uploaded by

    Mika
    11 views36 pages

    Original Title

    PH Accountancy Guide random topics.pdf

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    Download as pdf
    11 views36 pages

    PH Accountancy Guide Random Topics PDF

    Uploaded by

    Mika

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    Download as pdf
    of 36
    4 PHILIPPINE ACCOUNTANCY GUIDE “Digitalizing The World of Accountancy” PrNcCgUCe.yE BANK RECONCILIATION PROCEDURE https://wiley.cony (modified) A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate. The information on the bank statement is the bank's record of all transactions impacting the entity's bank account during the past month. ttos:/ Awww accountingtools.com/articles/2017/5/17/bank-reconciliation PURPOSE It is also useful to complete a bank reconciliation to see if any customer checks have bounced, or if any checks you issued were altered or even stolen and cashed without your knowledge. Thus, fraud detection is a key reason for completing a bank reconciliation. When there is an ongoing search for fraudulent transactions, it may be necessary to reconcile a bank account on a daily basis, in order to obtain early warning of a problem. When it comes time for the annual audit, the auditors will always examine the company's ending bank reconciliation as part of their testing procedures, so this is yet another reason to complete a reconciliation. itos://ww aecountingtools.com/articles/what-is-the-purpese-of-2-bank-reconciliation.htm) IMPORTANCE OF BANK RECONCILATION 1 The reconciliation will bring out any errors that may have been committed either in the cash book or in the pass book. 2. Any undue delay in the clearance of cheques will be shown up by the reconciliation. 3. A regular reconciliation discourages the accountant of the bank from embezzlement. There have been many cases when the cashiers merely made entries in the cash book but never deposited the cash in the bank; they were able to get away with it only because of lack of reconciliation. 4, It helps in finding out the actual position of the bank balance. FACEBOOK PAGE: hitos://www.facebook.com/PhilippineAccountancyGuide/ Page 1 of S y) PHILIPPINE ACCOUNTANCY GUIDE izing The World of Accountancy” se unciae we BANK RECONCILIATION PROCEDURE STEP 1 - Deposits in transit. ‘Compare the individual deposits listed on the bank statement with deposits in transit from the preceding bank reconciliation and with the deposits per company records or duplicate deposit slips. Deposit recorded by the depositor that have not been recorded by the bank are the deposits in transit. Add these deposits to the bank per balance. STEP 2- Outstanding checks. Compare the paid checks shown on the statement with a, Check outstanding from the previous bank reconciliation, and b. Check issued by the company as recorded in the cash payment journal or check in the check register in the checkbook. Issued checks recorded by the company but that have not yet been paid by the bank are outstanding checks. Deduct checks from the balance per the bank. STEP 3- Errors. Note any errors discovered in the foregoing steps and list them in the appropriate section of reconciliation schedule. All errors made by the depositor are reconciling items in determining the adjusted cash balance per book. In contrast, all errors made by the bank are reconciling items in determining the adjusted cash balance per bank. STEP 4- Bank Memoranda (Memo). Trace bank memoranda to the depositor’s records. List in the appropriate section of the reconciliation schedule any unrecorded memoranda. FACEBOOK PAGE: hitos://www.facebook.com/PhilippineAccountancyGuide/ Page 2 of S y) PHILIPPINE ACCOUNTANCY GUIDE izing The World of Accountancy” Se ueciae APPLICATION The bank statement of PAG Corporation, shows a balance per bank of 15,907.45 on Dec. 31, 2019. On this date the balance of cash per books is 11,589.45 STEP 1 - Deposits in transit Dec. 31, 2019 deposit was received by the bank on Jan. 3, 2020, P 2,201.40 STEP 2 - Outstanding checks. No. 463, P 3,000.00; no. 467, P 1,401.30; no. 470 P1,502.70. STEP 3- Errors. PAG wrote check no. 453 for P 1,226.00 and the bank paid that amount, However, PAG recorded that check as P1,262.00. STEP 4- Bank Memoranda (Memo). a. Debit — NSF check from YOU for P425.60 b. Debit — Charge for printing company checks P30.00 ¢, Credit — Collection of note receivable for 1,000.00 plus interest earned P50.00, less bank collection fee P15.00 FACEBOOK PAGE: httos://www.facebook.com/PhilippineAccountancyGuide/ Page 3 of S 4) PHILIPPINE ACCOUNTANCY GUIDE “Digitalizing The World of Accountancy" eipeeaye PAG Corporation Bank Reconciliation Dec. 31, 2019 Cash balance per bank statement 15,907.45 Add: Deposits in transit 2,201.40 18,108.85 Less: Outstanding checks No. 463 3,000.00 No. 467 1,401.30 No. 470 1,502.70 5,904.00 Adjusted cash balance per bank 42,204.85 Cash balance per books 11,589.45 Collection plus interest Add: less fee 1,035.00 Error in recording check no. 453 36.00 1,071.00 12,660.45 Less: NSF 425.60 Bank service charge 30.00 Adjusted cash balance per books Journal Entries COLLECTION OF NOTE RECEIVABLE Cash in Bank 1,035.00 Miscellaneous Expense 15,00 Notes Receivable 4,000.00 Interest income 50.00 -To record collection of note receivable by bank BOOK ERROR Cash in Bank 36.00 ‘Accounts Payable 36.00 =To record esror in recording check no. 453 NSF CHECK Accounts Receivable 425.60 Cash in Bank 425.60 -To record NSF check BANK SERVICE CHARGE Miscellaneous Expense 30.00 Cash in Bank 30.00 To record charge for printing company checks FACEBOOK PAGE: hitos://www.facebook.com/PhilippineAccountancyGuide/ Page 4 of S yy PHILIPPINE ACCOUNTANCY GUIDE, “Digitalizing The World of Accountancy” i ail EXERCISE PAG Corporation bank statement for Jan. 31, 2020 shows the following data. Balance, Jan. 1, 2020 P 12,650.00 NSF Check 175.00 Collection of note receivable 505.00 Balance, Jan. 31, 2020 P 14,280.00 ‘The cash balance per book at Jan, 31, 2020 is P 13,319.00, Based on your review the following data was revealed. 1. The NSF Check as from YOU Corporation. The note was collected by the bank was P 500.00, 3-month 12% note. The bank charged a P10.00 collection fee. No interest has been accrued. Outstanding checks at Jan. 31, 2020 totaled P 2,410.00 Deposits in transit at Jan. 31, 2020 totaled P 1,752.00 A PAG Corporation check for P 352.00, dated Jan. 10, 2020, cleared the bank on Jan, 25, 2020, The company recorded this check, which was a payment on account, for 325.00 XN Po Requirements 1. Prepare a bank reconciliation. 2. Journalize the entries required by the reconciliation. 3. Send your work at the Facebook Page. FACEBOOK PAGE: httos://www.facebook.com/PhilippineAccountancyGuide/ Page 5 of S PHILIPPINE ACCOUNTANCY GUIDE “Digitalizing The World of Accountancy” philacetquide@amail. com Philacctguide. xyz CLOSING ENTRIES a supplementary guide PURPOSE 1. To update the Retained Earnings account in the ledger by transferring net income (loss) and dividends to retained earnings. 2. To prepare the temporary accounts such as revenue, expense and dividends for the next period's posting by reducing their balances to Zero. PROCESS 1. Assuming normal balances. Debit each revenue account for its balance and credit Income Summary for total revenues. 2. Assuming normal balances. Debit Income Summary for total expense and credit each expenses account for its balance. 3. Debit Income Summary and Credit Retained earnings for the amount of Net Income or Credit Income Summary and Debit Retained Earnings forthe amount of Net Loss. 4. Debit Retained Eamings for the Balance in the Dividends account and credit Dividends for the same amount. Sole/Partnership. Debit Capital account and Credit Drawing Account. 6. Sole/Partnership. Debit Income Summary and Credit Capital account for the amount of Net Income or Credit Income Summary and Debit Capital account for the amount of Net Loss. a PAG NOTE: * ForSole and Partnership Instead of Retained Earnings use the Capital account. « Skip any part of the process if Not Applicable. APPLICATION Sales 45,300.00 Sales retum & allowances 900.00 Sales discount 304.00 come Summary 44,096.00 -To close Sales account Page 1 of 2 [S34 PHILIPPINE ACCOUNTANCY GUIDE SS “Digitalizing The World of Accountancy” philacctquide@amail.com Philacctguide xyz Income Summary Purchase returns and allowances Purchase discounts Merchandise inventory, end Purchases Freight in ~ To close purchases and establish inventory account lrcome Summary Salaries Expense Advertising Expense Utilities Expense Rent Expense Freight out - To close Operating expenses Drawings PAG, Capital PAG, Drawing - To close Drawing account Assumeitis a Net Income Income Summary PAG, Capital - To close Income Summary lbcome Summary Retained Earnings - To close heome Sunmary Assumeitis a Net Loss PAG, Capital Income Summary = To clase Income Summary Retained Earnings ircome Summary + To close Income Summary Dividends Retained Earnings Dividends. + To close Dividends Page2 of 2 8,100.00 2,008.00 2,296.00 2,296.00 2,296.00 2,296.00 3,000.00 56,800.00 700.00 3,000.00 4,000.00 400.00 3,500.00 200,00 2,008.00 2,296.00 2,296.00 2,296.00 2,296.00 3,000.00 Y PHILIPPINE ACCOUNTANCY GUIDE, “Digitalizing The World of Accountancy” i ail Philacctguide.xyz Merchandising Entries using Perpetual Inventory System Sales transactions * Selling of merchandise to customers Cash/Accounts Receivable XXX Sales Revenue XXX Cost of Goods Sold XXX Inventory XXX * Granting sales returns or allowances to customers Sales Returns and Allowances XXX Cash/Accounts Receivable XXX Inventory XXX Cost of Goods Sold XXX « Paying freight cost on sales, FOB destination Freight-Out XXX Cash XXX * Receiving payment from customers within discount period Cash XXX Sales Discount XXX Accounts Receivable XXX FACEBOOK PAGE: httos://www.facebook.com/PhilippineAccountancyGuide/ Page 1 of 2 Y PHILIPPINE ACCOUNTANCY GUIDE. "Diptalsing The Word of Ansourtaney” philacctguide. WE Purchase transactions « Purchasing merchandise for resale Inventory XXX Cash/Accounts Payable XXX * Paying freight costs on merchandise purchased, FOB Shipping Point Inventory XXX Cash OK * Receiving purchase returns or allowances from suppliers Cash/Accounts Payable XXX Inventory XXX Paying suppliers within discount period Accounts Payable XXX Inventory XXX Cash XXX Adjusting and Closing Entries * Inventory book count is higher than actual inventory on hand Cost of Goods Sold XXK Inventory XXX * Closing temporary accounts with credit balances Sales Revenue XXX Income Summary XXX * Closing temporary accounts with debit balances Income Summary XXX Sales Returns and Allowances XXX Sales Discounts XXX Cost of Goads Sold XXX Freight-Out XXX Expenses XXX FACEBOOK PAGE: httos://www.facebook.com/PhilippineAccountancyGuide/ Page 2 of 2 [say PHILIPPINE ACCOUNTANCY GUIDE S “Digitalizing The World of Accountancy” hi philacctguide xyz CHALLENGE 1 Scores and suggested solution will be posted on the Facebook Page. W wishes to purchase 1/4 interest in the partnership of |X, Y, and Z. The three partners agreed to sell to W 1/4 of their respective capital and P&L interest in exchange for a total payment of P 50,000. The partner's capital accounts and the profit and loss ratio immediately before the admission of Ware as follows: PROFIT AND LOSS CAPITAL BALANCES RATION Xx 95,000 60% Y 46,000 30% z 26,000 10% After admission of W, what should be their respective capital balances and P&L ratio? ‘Send your answer at htto://phil ide. x) i/page/challenge-1 Deadline for submission: Feb. 8, 2020 12:00 pm. FACEBOOK PAGE: httos://www.facebook.com/PhilippineAccountancyGuide/ Page 1 of 8 PHILIPPINE ACCOUNTANCY GUIDE “Digitalizing The World of Accountancy” philacctouide@amail.com Philacctguide xyz IASB amends IAS 1 to clarify the classification of liabilities as current or non-current issued on 23 January 2020. FACEBOOK PAGE: httos://www.facebook.com/PhilippineAccountancyGuick Page lof 1 Deloitte. igi IFRS in Focus IASB amends IAS 1 to clarify the classification of liabilities as current or non-current Contents This FRSin Focus addresses the recent amendmetits to IAS 1 Presentation of Financial Statements that have been published by the intermational Accounting Standards Board (ASB) The amendments are titled Classification of Liabilities as Current or Non-current Amendments t0 AS?) Background ‘The amendments ‘The amendments t0 14S 1 Effective date clarify that the classfication of labilties as current oF non-current is based on rights that are in existence atthe end of the reporting period Further information speoty that classification is unaffected by expectations about whether an erty wil Key contacts exercise its right to defer settlement ofa babily. explain that rights are in existence if covenants are complied with at the end of the reporting period. Introduce a definition of settlement to make clear that settlement refers to the transfer to ‘the counterpary of cash, equity instruments, other assets or services, are effective for annual periods beginning on or after 1 January 2022 with earlier application permitted are applied retrospectively, The amendments resutt from a request recelved by the ASB to clay the ertrlafor the assiication ofa kabilty as ether current ar nan-

    You might also like