SHS

Entrepreneurship
Quarter 2: Module 7
Entrepreneurship
Grade 11/12 Quarter 2: Module 7
First Edition, 2020

Copyright © 2020
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form without written
permission from the copyright owners.

Development Team of the Module

Author: Jennilyn C. Lucas, T-I

Editor: SDO La Union, Learning Resource Quality Assurance Team

Illustrator: Ernesto F. Ramos Jr., P II

Management Team:

Atty . Donato D. Balderas, Jr.

Schools Division Superintendent

Vivian Luz S. Pagatpatan, Ph.D

Assistant Schools Division Superintendent

German E. Flora, Ph.D, CID Chief

Virgilio C. Boado, Ph.D, EPS in Charge of LRMS

Lorna O. Gaspar, EPS in Charge of ABM

Michael Jason D. Morales, PDO II

Claire P. Toluyen, Librarian II

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Entrepreneurship
Quarter 2: Module 7

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 Target

Record keeping is important in a business for it is the only way to inform the
entrepreneur how the business is doing. In order to analyze the ‘health’ of your
business you need data! Therefore, a systematic process of gathering data and
recording it should be set up.

In your previous lesson, you are through on how to implement a business plan.

This learning material will provide you with information and activities which will
assist you to identify the reasons for keeping business records.

After a thorough study on this learning material, you are expected to:

1. Identify the reasons for keeping business records.

CS_EP11/12B-ENTREPIV-j-4

Let us start your journey in learning more on business records. Are you excited to
answer the Jumpstart? Smile and Enjoy

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 Jumpstart

Before you equip yourself with a new set of knowledge, let us

check your understanding about the topic. Enjoy answering!

Activity 1
Direction: Draw a if the word/group of words is an essential part of a
business record and leave the number blank if not. Write your answers on a separate
sheet of paper.

1. Official Receipt 6. Calendar

2. Purchase Order 7. Sales Invoice
3. Year Book 8. Cash Allowance
4. Balance Sheet 9. Delivery Receipt
5. Sales Report 10. Employees Records

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 Discover

“Success knows your purpose in life, growing to reach your

maximum potential, and sowing seeds that benefit others.”

--- John C. Maxwell

WHAT ARE BUSINESS RECORDS?

A business record is a document (hard copy or digital) that records business dealing.
Business records include meeting minutes, memoranda, employment contracts, and
accounting source documents. It must be retrievable at a later date so that the
business dealings can be accurately reviewed as required. Since business is dependent
upon confidence and trust, not only must the record be accurate and easily retrieved,
the process surrounding its creation and retrieval must be perceived by customers
and the business community to consistently deliver a full and accurate record with no
gaps or additions.

IMPORTANCE OF KEEPING GOOD RECORDS

1) Monitor the Progress of the Business

The good records need to monitor the progress of a business. Records can
show whether the business is improving, which items are selling, or what
changes the need to make. Good records can increase the likelihood of business
success.

2) Prepare the Financial Statements

The good records need to prepare accurate financial statements. These
include income (profit and loss) statements and balance sheets. These statements
can help in dealing with the bank or creditors and help manage the business.

a) An income statement shows the income and expenses of the

business for a given period of time.
b) A balance sheet shows the assets, liabilities, and equity in the
business on a given date.

3) Identify sources of Income

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 The money or property will received from many sources. The records can
identify the sources of income. This information will help to separate business
from non-business receipts and taxable from non-taxable income.

4) Keep Track of the Deductible Expenses

Keep the record especially the expenses will greatly needed when preparing
the tax return.

5) Keep Track as the Basis in Property

The basis is the amount of the investment in property for tax purposes. The
basis will be used to figure the gain or loss on the sale, exchange, or other
disposition of property, as well as deductions for depreciation, amortization,
depletion, and casually losses.

TYPES OF RECORDS FOR ACCOUNTING AND TAX PURPOSES

 Business expenses
 Credit card statements
 Bank statements
 Annual tax returns
 Quarterly tax filings
 Payroll
 Inventory
 Sales
 Income
 Petty cash
 Vehicle use log
 Travel log
 Cash register tapes
 Credit card sales receipts
 Invoices
 Cancelled checks
 Check stubs

OTHER RECORDS

 Purchase order
 Employment applications
 Emails and other business communications
 Inventory logs
 Personnel records

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  Accident reports
 Article of incorporation
 Permits
 Licenses
 Trademark registrations and patents

Financial forms/records usually have set standards of reporting and any

differences are very minimal. Samples obtained from an existing similar project will
definitely prove helpful for your design requirements. (p. 219 A Business Planning by
Jorge Cuyugan 1996)

These are:

1. Accounts Receivables – these are valuable not only to decision

on extension of credits but also to make accurate billing and maintenance of
good relations with customers. These records will reveal how effective is your
firm’s credit and collection policies.

2. Inventory Records – these records will be used to control your

inventory items. In addition, they could also be used to supply information for
your firm’s purchasing, maintenance of economic supply of sticks and
computing turnover ratios.

3. Accounting Payable – these liability record show what your

firm owes, facilitates obtaining of available cash discounts and informs you
when payments are due.

4. Sales Records – these could be used in the analysis of the

effectiveness in advertising and promotions of your products, market coverage
and profitability. They also serve as a basis for computing your salesmen’s
compensation.

5. Production Records – these records provide a basis for your

product costing and detect lost profits/costs as a result of idle
manpower/machineries.

6. Payroll Records – show the total payments you pay your

employees and provide a basis for computing some legal payments.

7. Cash Records – show all receipts and disbursements made by

your firm. They contain your firm’s cash flow and petty cash balances. These
records also enable you to know when to time your loans and they may also be
used as assurances for ready cash when needed.

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 8. Other Accounting Records
 Insurance registers
 Leasehold records
 Investment records

SPECIFIC TYPES OF ACCOUNTING RECORDS

1. Journals
a. Sales Journal (Sales Book) – these are used to record your
company’s sales.
b. Purchase Journal (Purchase Book) – these are used to record
your company’s purchase.
c. Cash Receipts Journal (Cash Receipts Book) – these are used to
record your company’s cash receipts.
d. Cash Payments Journal (Cash Payments Book or Cash
Disbursement Book) – these are used to record your company’s
payments in cash.
e. General Journal – these are used to record your company’s
transaction mentioned in a, b, c and d.

A summary of the above records is given in the table below:

Journal Transaction Supporting Forms

Sales Journal (S) Sales Sales Invoice
Purchase Journal (P) Purchases Purchase Invoices
Cash Receipt Journal (CR) Cash Receipts Official Receipts
Cash Payment Journal (CP) Cash Payments Cash Vouchers
General Journal (J) Others Journal Vouchers

2. Ledgers
a. Accounts Receivable Ledgers – contain your company’s
individual trade with customers (accounts).
b. Accounts Payable Ledgers – contain your company’s individual
accounts with creditors.
c. Plant Ledgers – contain your company’s list of all fixed assets.

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 Explore

Enrichment Exercise 1

Directions:Compare the business records used by the Private Companies versus

Government Agencies. Use separate sheet of paper for your answer.

Comparative Study between the Private Companies versus Government Agencies

in Using Business Records

Private Companies Government Agencies

Enrichment Exercise 2

Direction: Collect five different business records/receipts that you have already seen
or you already have. Paste it on an A4 size bond paper then write a description on
each business record/receipt (what type of business record is it, their uses, and why it
is important to keep those business records/receipt).
CATEGORY 10 pts. 9 pts. 8 pts 7 pts or below
Content Expresses Opinion s and Unclear Does not
& opinion and ideas are connection to express
Presentation ideas in a stated clearly the topic. opinions or
clear and with Evidenced in ideas clearly,

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 concise occasional minimal no connection
manner with lack of express of to the topic.
obvious connection to opinions or
connection the topic. ideas
with the
topic.
Originality Ideas and Ideas and Uses ideas and Uses ideas and
& illustrations illustrations illustration of illustration of
Uniqueness shows a large shows original other people. others and no
amount of thoughts. There is a evidence of
original Works shows slight evidence original
thoughts. new idea and of original thinking.
Ideas is perception. thinking.
unique and
imaginative
Creativity Uses excellent Make good Make use of Make use of
& choice of choice of evidences and evidences and
Craftsmanship evidences and evidences and words that are words that are
words that words that are not so not appealing
are appealing appealing to appealing to to the market.
to the market. the market. the market.

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 Deepen

An entrepreneur should entrust record keeping to a knowledgeable person. We will

read the case below to understand the importance of record keeping then after
reading, answer the questions after the situation below.

JOHN ENTERPRISES
John operated a small scale business which dealt in selling fruits of all
varieties, such as pineapples, oranges, passion fruit, bananas, watermelons, grapes
and many others. He received his supplies directly from the farmers. To ensure
good operation of the business he tried very hard to keep good records. He
maintained a supplies book where he recorded all the supplies from each supplier.
In the supplier book he recorded the quantities supplied and the amount of money
the supplies were worth. He also maintained a cash book where he recorded the
cash sales. He also recorded any credit given to his customers on small pieces of
paper. He also recorded all the business expenses in a hard cover book.

John was very happy with the record keeping but one day the pieces of paper on
which he recorded the creditors disappeared and subsequently, he was not able to
tell how much he was owed by his creditors. John found it difficult to reconstruct
the credit from his memory.

In 2008, the Kenya Revenue Authority staff visited John’s business and
demanded to see John’s records. John was surprised to hear that he was required
to maintain records for inspection by the Kenya Revenue Authority staff. The KRA
staff gave him one month to prepare the records. John did not know where to
begin.
1. How effective in your opinion was John at record keeping?
________________________________________________________________________

1. How effective in your opinion was John at record keeping?

________________________________________________________________________

2. Identify the records that John should maintain to meet the

requirements of the KRA.

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 ________________________________________________________________________

3. In the your opinion, what methods could John employ to improve his
system?
________________________________________________________________________

SCORING RUBRIC FOR THE ACTIVITY

Category 5 points 3 - 4 points 1 - 2 points
One idea may not be
Writing is clear and Some ideas do not
Ideas relevant or somewhat
easy to understand. make sense.
confusing.
The composition has The composition
The composition
clear, creates interest, does not have a
Organization needs details to make
well-developed and clear beginning,
it interesting.
satisfying. middle, or end.
The composition has
The composition has The composition
a lot of powerful and
Word Choice some powerful and has no powerful
exciting words to
exciting words. and exciting words.
enhance the meaning.

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 Gauge

Part 1
Direction: Choose the correct answer. Write the letter of your answer in a separate
sheet of paper.

1. Why it is important to keep the record of expenses especially when preparing

the tax return?
A. To identify sources of income.
B. To monitor the progress of the business.
C. To keep track as the basis in property.
D. To keep track of the deductible expenses.

2. What is the reason why it is needed to record sources of income?

A. To figure the gain or loss on the sale, exchange or other
disposition of property as well as deductions for depreciation.
B. It will help to separate business from non-business receipts and
taxable from non-taxable income.
C. To show what your firm owes, facilitates obtaining of available
cash discounts and informs you when payments are due.
D. To represents the investments actually paid by the company’s
stockholders.

3. The following are types of records for accounting and tax purposes except?
A. Invoices
B. Ticket Stubs
C. Annual Tax Returns
D. Vehicle Use Log

4. Which of the following is a transaction business record?

A. Sales Journal
B. Sales Invoice
C. Cash Receipts
D. Official Receipts

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 5. These could be used in the analysis of the effectiveness in advertising and
promotions of your products, market coverage and profitability.
A. Sales Records
B. Cash Records
C. Payroll Records
D. Production Records

Part II. True or False

Direction: Analyze each statement then write TRUE if the statement is correct and
write FALSE if the statement is wrong.

1. A business record must be retrievable at an earlier date so that the business

dealings can be accurately reviewed as required.
2. Good records can decrease the likelihood of business success.
3. Financial statements can help in dealing with the bank or creditors and help
manage the business.
4. The records can identify the sources of income.
5. Financial records usually have set standards of reporting and any differences
are very minimal.

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 16
Key Answer
Jumpstart
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Explore
Enrichment Activity 1 Answers may vary depending on learners understanding
Enrichment Activity 2 Answers may vary depending on learners understanding
Deepen
Activity 1 Answers may vary depending on learners understanding
Gauge
Part 1: Multiple Choice
1. D
2. B
3. B
4. C
5. A
Part II: True or False
1. FALSE
2. FALSE
3. TRUE
4. TRUE
5. TRUE
References
Printed Materials:

Acierto, Marife Agustin-. 2017. Entrepreneurship K to 12 Basic Education Curriculum Senior

High School – Applied Track Subject. Room 215 ICP Building, Cabildo St., Intramuros
Manila: Unlimited Books Library Services & Publishing Inc.

Websites:

http://www.oerafrica.org

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