Fundamentals of SENIOR

Accountancy, Business HIGH

and Management 1 (FABM 1) SCHOOL

Self-Learning
Module

Chart of Accounts 11
666
Quarter 3
Fundamentals of Accountancy, Business and Management 1
Quarter 3 – Self-Learning Module11: Chart of Accounts
First Edition, 2020

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Development Team of the Self-Learning Module

Writer: Hedelita B. Calonia
Editor: Edna D. Camarao, PhD., Dennis T. Alex
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Illustrator: Name
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Management Team: Ma. Evalou Concepcion A. Agustin
OIC-Schools Division Superintendent
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OIC-Assistant Schools Division Superintendent
Victor M. Javena, Ed. D.
Chief - School Governance and Operations Division
Manuel A. Laguerta, Ed. D.
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Librada L. Agon EdD (EPP/TLE/TVL/TVE)

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Pasig City
 Fundamentals of
SENIOR
Accountancy, Business HIGH
and Management 1 SCHOOL

(FABM 1)

Self-Learning
Module

Chart of Accounts 11
Quarter 3
Introductory Message

For the facilitator:

Welcome to the Senior High School – Fundamentals of Accountancy, Business

and Management 1 Self Learning Module on Chart of Accounts!

This Self-Learning Module was collaboratively designed, developed and

reviewed by educators from the Schools Division Office of Pasig City headed by its
Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A.
Agustin, in partnership with the City Government of Pasig through its mayor,
Honorable Victor Ma. Regis N. Sotto. The writers utilized the standards set by the K
to 12 Curriculum using the Most Essential Learning Competencies (MELC) in
developing this instructional resource.

This learning material hopes to engage the learners in guided and independent
learning activities at their own pace and time. Further, this also aims to help learners
acquire the needed 21st century skills especially the 5 Cs, namely: Communication,
Collaboration, Creativity, Critical Thinking, and Character while taking into
consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the
body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them to
manage their own learning. Moreover, you are expected to encourage and assist the
learners as they do the tasks included in the module.
 For the learner:

Welcome to Fundamentals of Accountancy, Business and Management 1 Self

Learning Module on Chart of Accounts!

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning material while being an active
learner.

This module has the following parts and corresponding icons:

Expectations - This points to the set of knowledge and skills

that you will learn after completing the module.

Pretest - This measures your prior knowledge about the lesson

at hand.

Recap - This part of the module provides a review of concepts

and skills that you already know about a previous lesson.

Lesson - This section discusses the topic in the module.

Activities - This is a set of activities that you need to perform.

Wrap-Up - This section summarizes the concepts and

application of the lesson.

Valuing - This part integrates a desirable moral value in the

lesson.

Posttest - This measures how much you have learned from the
entire module.
 EXPECTATIONS

After going through this module, you are expected to:

1. discuss the importance of chart of accounts in recording business
transactions;
2. identify and classify sub-accounts from the chart of accounts; and
3. prepare chart of accounts for a service business .

PRETEST

Directions: Write TRUE if the statement is correct, and FALSE if otherwise.

1. A chart of accounts is a list of all the accounts used by the organization for
financial reporting.
2. Assets, liabilities, income, and expenses are the only standard categories in
the chart of accounts.
3. Expenses include cost of goods sold and intangible items like trademarks and
software.
4. Liability accounts include wages payable and sales tax payable.
5. It is easier to locate specific amounts through chart of accounts.

RECAP

Directions: Fill in the blanks.

1. The five major accounts are ________, ________, ________, ________, and________.
2. The normal balance of assets and expenses is ___________ while the normal
balance of liabilities, capital or owner’s equity and income is ____________.
3. The two approaches for financial accounting are ____________ and _____________.
 LESSON

In recording business transactions, business entities develop chart of accounts. A

chart of accounts is a list of all the accounts used by the business with corresponding
account codes that the business will use in recording and posting in the books of
accounts and in reporting in the financial statements. In order to have uniformity,
using chart of accounts will ensure that the same account title and account codes
are used for the same transactions. It is necessary to standardized account titles so
that there is consistency in recording of specific transactions and reporting in the
same financial statements. There are many internal and external users of the
financial statements, therefore the account titles shown exactly in the chart of
accounts must be used for uniformity in understanding and interpretation. Account
codes are assigned based on the accounting elements. Small businesses usually have
3-digit account codes and large businesses have 4-digit codes.

Typical Chart of Accounts

RBD SERVICES
CHART OF ACCOUNTS

Code Account Titles Code Account Titles

ASSETS REVENUES
101 Cash 501 Delivery Fees
103 Accounts Receivable EXPENSES
103.1 Allowance for Bad Debts 601 Rent Expense
105 Office Supplies 602 Wages Expense
107 Prepaid Insurance 603 Telephone Expense
109 Prepaid Rent 604 Electricity Expense
110 Notes Receivable 605 Transportation Expense
112 Interest Receivable 606 Gasoline Expense
120 Land 607 Office Supplies Expense
122 Building 608 Entertainment Expense
122.1 Accumulated Depreciation-Building 609 Depreciation Expense-Building
124 Car 610 Depreciation Expense-Car
124.1 Accumulated Depreciation-Car 611 Depreciation Expense-Delivery Van
126 Delivery Van 612 Depreciation Expense-Computer
126.1 Accumulated Depreciation-Van 613 Depreciation Expense-Furniture
127 Computer 615 Van Maintenance Expenses
127.1 Accumulated Depreciation-Computer 699 Miscellaneous Expenses
128 Furniture
128.1 Accumulated Depreciation-Furniture

LIABILITIES OTHER REVENUES

201 Accounts Payable 701 Rental Revenues
203 Notes Payable 703 Interest Revenues
205 Interest Payable
207 Wages Payable OTHER EXPENSES
209 Unearned Revenues 801 Interest Expense
211 Loans Payable
CAPITAL DRAWING
301 Roberto Sy, Capital 401 Bernie Dee, Drawing
T-Account, Footing and Balancing

An accounting device that helps facilitate in transaction analyses is called a T-

account. It is in the form of big letter T. A T-account has three parts: the account
title or account name, the debit side on the left side and the credit side on the right
side. Every account title has a T-account. It is easier to do cross referencing when a
date is placed on the left side of each posted amount. After all the transactions are
posted on the T-account, the amount of each side is totalled. This process is called
footing. A T-account can have two footings. There is no need to compute for the
footing if the T-account has only one amount posted. Getting the difference between
the debit footing and the credit footing is called balancing. The balance of an account
is computed by deducting the smaller footing from the larger footing and the resulting
balance is placed on the side with the larger footing.

Illustration
Transactions of RBD Services in December 2017

Dec. 1 Received Php1,000,000 investment from Roberto Sy to start RBD Services. Issued
official receipt (OR) number 001.

2 Issued check (CK) 001 for office supplies Php3,000.

3 Bought a computer from Best Buy, Php35,000. Issued CK 002 for Php3,000 down
payment. The balance is on account.

6 Bought delivery van from A-J Car Dealership, Php 1,500,000. Issued CK 003 for the
Php20,000 down payment. Balance is on account.

7 Paid one year rent, Php60,000. Issued CK 004.

8 Performed services for cash, Php275,000. Issue OR 002 and sales invoice (SI) 001.

9 Performed services, Php100,000. Issued OR 003 for the Php10,000 down payment and
SI 002 for the full amount. The balance is on account.

13 Obtained bank loan, Php500,000. Issued promissory note (PN) 001.

14 Paid Php3,000 for van maintenance. Issued CK 005.

15 Paid wages, Php30,000. Issued CK 007. CK 006 was voided.

16 Performed services, Php200,000. Issued OR 004 for the Php50,000 down payment and
SI 003 for the full amount. The balance is on account.

17 Issued OR 005 for the Php60,000 collected from customers (12/9).

18 Issued CK 008 as payment for the telephone expense, Php2,000.

19 Issued CK 009 as payment for the electricity expense. Php4,000.

20 Issued CK 010 partial payment to Best Buy, Php16,000. (12/3).

21 Issued CK 011 payment to A-J Dealership, Php50,000.(12/6).

22 Issued CK 012 to Roberto Sy for cash withdrawal, Php40,000.

23 Collected Php100,000 from customers on account. Issued OR 006.

28 Paid entertainment expense, Php10,000. Issued CK 013.

30 Paid wages, Php30,000. Issued CK 014.

T-Account Presentation of RBD Services Transactions in December 2017
 Account balances summary of RBD Services for December 2017 transactions

ACTIVITIES

Activity 1: T-Account
Directions: Determine the T-account balance for cash from the transactions below.

March 1 Invested Php800,000 as initial capital for RBD Services.

March 3 Purchased computers worth Php100,000 on account and payable within 60 days.

March 5 Purchased office supplies worth Php20,000 on cash.

March 9 Paid Php40,000 to reduce RBD’s obligation last March 3.

March 13 Earned Php70,000 for services rendered. The client is allowed to pay within 30 days.
March 18 Paid Php25,000 for employees’ salaries.

March 23 Received Php30,000 from March 13 transaction.

March 27 Received Php210,000 for services rendered to a client.

March 30 Issued check worth Php35,000 for March utilities.

March 31 Paid office rent worth Php45,000 for f March.

March 31 Withdrawals of Php150,000 to settle an immediate obligation.

Activity 2: Footings!
Directions: Using the transactions from Activity 1,
What is the debit and credit footings of the cash account?

WRAP-UP

To summarize what you have learned in the lesson, answer the following
questions:

1. What is an account?
2. How do you differentiate footing from balancing?
3. What is a chart of accounts?

VALUING

Reflect on this!

“Learning is not attained by chance, it must be sought for with ardor and
diligence." – Abigail Adams

POSTTEST

Directions: Identify and write your answer before each item number.

________1. It refers to the increased side of the account.

________2. It refers to the list of account titles with corresponding account codes.
________3. It refers to the process of computing the total of each side of a T-account.
________4. It refers to the process of getting the balance between the debit footing
and the credit footing.
________5. It refers to an accounting device that facilitates transaction analysis.
 KEY TO CORRECTION

APPROACH
APPROACH, MODERN
TRADITIONAL 3.
DEBIT, CREDIT 2. 5.T-account
INCOME, EXPENSES
CAPITAL OR EQUITY, 4.Balancing
ASSETS, LIABILITIES,
1.
RECAP (CR) Php 315,000 3.Footing
5. TRUE (DR) Php1,040,000
4. TRUE ACTIVITY 2 2.Chart of Accounts
3. FALSE
2. FALSE 1. Normal Balance
Php 725,000 (DEBIT Balance)
1. TRUE
PRETEST ACTIVITY 1: POSTTEST

References
Ballada, W. 2017. Fundamentals of Accountancy, Business, and Management 1. VDomDane
Publishers.

Banggawan, RB. Asuncion, DJ. 2017. Fundamentals of Accountancy, Business, and

Management 1. Real Excellence Publishing.

Feme, PM. Cabuñag, HP. 2017. Fundamentals of Accountancy, Business and Management 1.
Fastbooks Educational Supply, Inc

Ferrer, RC. Millan, CV. 2017. Fundamentals of Accountancy, Business, and Management 1.
Bandolin Enterprise. San Juan, DA. 2018. Fundamentals of Accounting. Elmoer
Publishing

Rabo, JS. Tugas,FC.Salendrez, HE. 2016. Fundamentals of Accountancy, Business, and

Management 1. Vibal Group Inc.

San Juan, D. A. 2018. Fundamentals of Accounting. ELMOER Publishing.

https://www.accountingcoach.com/search?q=chart+of+accounts&stp=1.
Accessed on August 23, 2020.

https://www.investopedia.com/terms/c/chart-accounts.asp.
Accessed on August 23, 2020.

http://www.netmba.com/accounting/fin/accounts/chart/.
Accessed on August 23, 2020.

https://bench.co/blog/accounting/chart-of-accounts./ Accessed on August 23, 2020.

https://beanninjas.com/blog/what-is-a-chart-of-accounts/. Accessed on August 30, 2020.

https://www.accountingcoach.com/chart-of-accounts/explanation/2.
Accessed on August 30, 2020.