Chapt

er5
JOURNALIZI
NGTRANSACTI ONS
(1stSt
epofAccount
ingPr
ocess)

SI
NGLE-ENTRYVERSUSDOUBLE-
ENTRYSYSTEM OFBOOKKEEPI
NG

Thesingl
e-ent
rybookkeepingsystem i
susual
l
yusedbysmall
businessent
erpr
ises
.
Underthi
ssyst
em,onlytransact
ionsinvol
vi
ngcashandper
sonal
accountsare
recogni
zed.

Thedoubl e-entr
ysystem ofbookkeepi
ngrecogni
zesthetwo- f
oldeffectsofa
transacti
on:theval
uer ecei
ved,andtheval
uepartedwit
h.Thisjust
if
iestheequal
i
tyof
debitandcr edi
tamount s.Becauseoft
hetwo-fol
deff
ectsrecogniti
on,bothsi
desof
thef undamentalequati
onwi l
lal
waysbeequal.

BOOKSOFACCOUNTS

Therear et
woset sofbooksthatareusedbythebusi
ness.Theyarethe"bookof
ori
ginalent
ry"andt he"bookoffi
nalent
ry"
.Thebookoforigi
nalentr
yiscall
ed
"j
ournal"whichisoftwokinds,t
hegeneralj
ournal
andthespecialj
ournal
.Thisi
s
call
edthebookofor i
ginal
ent
rybecauseiti
sinthi
sbookwher etr
ansacti
onsare
recordedforthefi
rstti
me.

Thebookoffinalent
ryiscall
edthe"l
edger"whichi
salsooft wokinds:yhrgener
al
l
edgerandthesubsidiar
yledger.Thi
siscal
ledbookoff i
nalent
rybecauseitisi
nthi
s
bookwheretransact
ionsthatwererecor
dedinthejournalaret
ransferr
edinthe
l
edgerforf
inalrecor
ding.

BOOKOFORI
GINALENTRY-
JOURNAL

Gener
alJour
nal

Agener
alj
ournal
canthatbea"l
oose-
leaf
"or"
book-
bound"f
orm.I
thast
he
f
oll
owi
ngcolumnarheadi
ngs:

 Dat ecol umn-showst hedatewhent hetransacti

onstookplace
 Par ti
cul ars-showst heit
em ortheaccountsdebi t
edandcr edit
edasaresul
tof
at ransact ionanal ysisaswellasabrieforconciseexplanati
onofwhat
transact i
oni sabout
 Fol i
o-showst henumberofanaccounti nal edgertowhichitwastr
ansfer
red
 Debi tcolumn-t hisisamoneycol umnshowi ngt hepesoamountoft heval
ue
recei vedi nat ransact i
on
 Cr edi tcolumn-t hisist
hemoneycol umnshowi ngtheamountofthevalue
par tedwi t
hi nat ransacti
on

Theent
ryt
hatismadeintheJour
nal
iscal
l
edj
our
nal
ent
ry.Aj
our
nal
ent
rymaybe
"si
mpl
e"or"compound"
.

Asimplej
ournal
ent
ryi
sonethathasonedebi
ti
tem wi
thadebi
tamountandone
cr
editi
tem wi
thacr
edi
tamount.

Year Part
icul
ars F Debi
t Cr
edi
t
Month Day Debi
tit
em
Cr
editi
tem
Explanat
ionofthenatur
eof
t
ransacti
ons.
Acompoundj
our
nalent
ryi
sonet
hathasonedebiti
tem andtwoormorecr
edi
ti
tems:
twoormor
edebi
tit
emsandonecr
editi
tem:ormayhavet woormorei
temsonbot
h
sides.

Year Part
icul
ars F Debi
t Cr
edi
t
Month Day Debi
tit
em
Debi
tit
em
Cr
editi
tem
Cr
editi
tem
Explanat
ionofthenatur
eof
t
ransacti
ons.

BOOKOFFI
NALENTRY

Gener
alLedger

Ageneral
ledgercanthatal
sobeofa"l
ooseleaf
"or"book-bound"for
m.Thisbook
wil
lgr
oupitemsoraccountsoft
hesamekind,cl
ass,ornat
ure.Eachit
em oraccount
i
sbeingprovi
dedwithaleafofal
edger
.

 Datecolumn-showt hedateofthet
ransacti
ont hatoccur
edasr ecordedi
n
thejour
nal
 Part
icul
ars-showsabriefbutaconciseexplanati
onofthetr
ansacti
onas
showninjourna
 Foli
o-showst hepagenumberofaj ournal
wher eentri
esaretakenform
 Moneycol umns-thedebitmoneycolumnandcr edi
tmoneycol umn

2020 Par
ti
cul
ars F Debi
t 2020 Par
ti
cul
ars F Cr
edi
t
Jan 01 Jan 01

T-accounti
susedi nl
i
euofagenerall
edger
.Iti
sanaccount
ingdevi
cethatmostof
thebookkeepersandaccount
ant
susedinsummar i
zi
ngtheeff
ectofchangesi
n
assets
,li
abi
li
ti
es,andequi
tyi
nafastandexpedi
entmanner.

CHARTOFACCOUNTS
Thechartofaccount
sshowsaccountti
tl
eswhicharearr
angedi
nthi
sor
der
:Asset
s,
Li
abi
li
ti
es,Owner '
sEqui
ty,I
ncome,andExpenses.
DAVAOLAUNDRYSERVI CES
Char
tofAccounts

St
atementofFi
nanci
alPosi
ti
onAccount
s St
atementofCompr
ehensi
veI
ncome

ASSETS I
NCOME
Page Acct. Page Acct
.
No. No. No. No.
1 111 Cas hi nBank 13 441 Laundr
yIncome
2 112 Account sRecei vable
3 112-AEst.uncol lecti
bleAcct s.
4 113 Laundr ySuppl i
esI nv.
5 114 Laundr yEqui pment
6 114-AAccumul atedDep' n
LI
ABI LITIES EXPENSES
7 221 NotesPayabl e 14 551 Uncollect
ibl
eAccounts
8 222 Account sPayabl e 15 552 Depreciat
ionExpense
9 223 Accr uedAdver ti
sing 16 553 Sal
ariesExpense
OWNER' SEQUI TY 17 554 RentExpense
1
0 331 S.Sant os,Capital 18 555 Uti
l
it
iesExpense
1
1 332 S.Sant os,Drawi ng 19 556 Laundr
ySuppl
i
esExpense
1
2 333 I
ncome&Expense 20 557 TaxesandLi censes
Summar y. 21 558 Adverti
si
ngExpense
22 559 I
nterestExpense
 I
l
li
str
ati
veProbl
em:
CotabatoLaundryServi
ces
(
Compl
eteAccounti
ngProcessforServi
ceConcer
n)

 March1-Mr.Sant
osopensacurrentaccountwit
hAll
i
edBankingCorpor
ati
on
i
ntheamountofP850,000tost
artwit
hhislaundr
yshopbusi
nessunderthe
t
radenameCotabatoLaundr
yServi
ces.

 Mar
ch2-Purchasedl
aundr
ysuppl
i
esi
nvent
oryonaccount
,P90,
000,f
rom
t
heff
.suppl
i
ers:

SM Ci
tyCotabat
o-P35,
000
Gai
sanoMal l
-P25,
000
NCCCMal l
-P30,000

 Mar
ch3-Pur
chas
eofl
aundr
ymachi
nef
orcash,P1
50,
000.

 Mar
ch4-Render
edl
aundr
yser
viceonaccount
,P80,
000t
othef
f:

ApoViewHotel-P5,
000
GrandMenSengHot el-P35,000
TheMarcoPoloHotel-P30,000
RoyalMandayaHotek-P10,
000

 Mar
ch1
0-Pai
dtaxesandl
i
censesduet
ogover
nment
,P4,
000.

 March12-Mr.Sant
oswi
thdr
ewP1
0,000cashf
rom t
hebusi
nessf
orhi
s
per
sonaluse.

 March17-Thebusi
nessborr
owedmoneyf
rom LandBankoft
hePhi
l
ippi
nes
,
P1
00,000byissui
nga1 5-
daynot
e.

 March17-Thebanki
ssuedadebi
tmemo,P1
,000f
ori
nter
estandbank
char
ges.

 March21-Recei
vedcashofP45,
000r
epr
esent
ingcol
l
ect
ionf
rom cust
omer
's
account
:

GrandMenSengHot el
-P30,
000
TheMarcoPoloHot
el-P10,
000
RoyalMandayaHot
el-P5,
000

 Mar
ch25-Par
ti
alpaymentofaccount
son,P60,
000t
othef
f.suppl
i
ers:

SM Ci
tyCotabato-P25,000
Gai
sanoMal l
-P20, 000
NCCCMal l
-P1 5,000

 March30-Thef
f:expenseswer
epai
dbyCot
abat
oLaundr
ySer
vicesf
ort
he
monthofMar
ch2020:

Spacerent
al-P5,000
Tel
ephone,l
ightandwater
-P1 2,
000
Sal
ari
esofempl oyees
-P10,000
 GENERALJOURNAL
2020 Part
icul
ars F Debit Cr
edi
t
March 1 Cashinbank GL-
1 850,000
S.Sant
os,Capit
al GL-
10 850,
000
Ini
ti
ali
nvest
ment

2 Laundrysuppli
esinvent
ory GL-
4 90,
000
AccountsPayabl
e GL-
8 90,
000
Purchasedsuppli
esonaccount

3 LaundryEqui
pment GL-
5 1
50,
000
Cashinbank GL-
13 1
50,
000
Pur
chasedequi
pmentf
or
cash

4 AccountsReceivabl
e GL-
2 80,
000
Laundr
yI ncome GL-
13 80,
000
Renderedservi
ceonaccount

1
0 TaxesandLicenses GL-
20 4,
000
CashinBank GL-
1 4,
000
Pai
dtaxesandli
censes

1
2 S.Santos,Dr
awing GL-
11 1
0,000
Cashinbank GL-
1 1
0,000
Withdrawalbyowner

1
7 Cashinbank GL-
1 1
00,
000
NotesPayabl
e GL-
7 1
00,
000
I
ssueda1 5-
daynot
eformoney
borrowed

I
nterestexpense GL-
22 1
,000
Cashinbank GL-
1 1
,000
Banki nter
estpayment

21 Cashinbank GL-
1 45,
000
AccountsReceivabl
e GL-
2 45,
000
Parti
alcol
lect
ionofaccount
s

25 AccountsPayabl
e GL-
8 60,
000
Cashinbank GL-
1 60,
000
Parti
alpaymentofaccount

30 Rentexpense GL-
17 5,
000
Uti
l
it
iesexpense GL-
18 12,
000
Sal
ariesexpense GL-
16 1
0,000
Cashinbank GL-
1 27,
000

(
Spacef
oradj
ust
ingent
ri
es)