• Answer the following questions as briefly as possible.

• Explain double entry bookkeeping

- Double entry, a fundamental concept underlying present-day bookkeeping and accounting,

states that every financial transaction has equal and opposite effects in at least two different accounts.

• State the rules of debit and credit

- DEBITS: - CREDITS:

-Opening balances of assets -Opening balances of liabilities and capital

-Additions to assets -Additions to liabilities and capital

-Additions to expenses -Additions to income and revenue

-Reduction in liabilities and capital -Reductions in assets

-Reduction in income and revenue -Reduction in expenses

• What order is usually followed in arranging accounts in the general ledger?

- The general ledger accounts are usually arranged in the following order: first the balance sheet
accounts, then the income statement accounts.

• What is a cross-reference?

- The term cross-reference can refer to either: An instance within a document which refers to
related information elsewhere in the same document.

• What is a trial-balance? What is its purpose?

- A trial balance is a bookkeeping worksheet in which the balance of all ledgers is compiled into
debit and credit account column totals that are equal. The general purpose of producing a trial balance
is to ensure the entries in a company's bookkeeping system are mathematically correct.

• Complete the Matrix by entering either debit or credit in each cell

ITEMS INCREASE DECREASE

ASSETS DEBIT CREDIT
LIABILITIES CREDIT DEBIT
EQUITY CREDIT DEBIT
REVENUE CREDIT DEBIT
EXPENSES DEBIT CREDIT
• State whether the following have debit or credit balance

•Interest income - Revenue, debit-decrease, credit-increase

•Allowance for bad debts -Contra asset, debit-decrease, credit-increase

•Accumulated depreciation - Contra asset, debit-decrease, credit-increase

•Depreciation expense - Expenses, debit- increase, credit-decrease

•Bad debts

•Rent payable - Liability, debit-decrease, credit-increase

•Salary expense - Expenses, debit-increase, credit-decrease

•Notes receivable - Asset, debit-increase, credit-decrease

•Accounts payable -Liability, debit-decrease, credit- increase

•OBARRA, Capital - Liability, debit-decrease, credit-increase

•Building - Asset, debit-increase, credit- increase

• Analyze the transaction, record using T-account and prepare the Trial Balance

Marcie’s Computer and Celfone Clinic was opened by Marcie Castillo on May 1 2021, with a cash
investment of P200,000 and furniture worth of P5,000. Additional transactions for the month as follow.

May 3- Signed a contract of lease and made a deposit of P15,000

May 4 - Paid for the construction of display counters, P25,000

May 5 - Bought repair supplies for cash, P7,500

May 6 - Bought and paid for furniture and fixtures, P45,000

May 8 - Bought repair equipment worth P15,000 from ABC Co. for use in the store. Paid 50% with the
balance to be paid within 30 days

May 9 - Collected P1,500 for cellphone repair service

May 10 - Billed Madison Corp P3,500 for computer repair service rendered

May 13 - Paid for salaries of clerks, P5,000

May 14 - Summary of cash received P4,000 and a promissory note for P2,000 for computer repair
service

May 15 - Signed a contract with Telecom System for the repair work to be done on their computers,
P15,000
May 16 - Paid for Telephone, light and water, P3,800

May 17 – Collected P1,500 from Madison

May 18 – Sent Bill to Telecom System for repair work done

May 22 – Total cellphone repair work collected in cash, P8,500

May 25 – Repair supplies used amounted to P2,200

May 30 – Payment for Salaries, P5,000; Rent, P5,000

May 31 – Marcie Castillo made a personal cash payment of P2,500 to ABC Co,

• You may use the following Account Titles for your Trial Balances

Cash

Accounts Receivable

Notes Receivable

Repair Supplies

Office Furniture

Repair Equipment

Deposit for rent

Accounts Payable

Castillo, Capital

Castillo, Personal

Repair Fees Revenue

Repair Supplies Used

Rent expense

Salaries Expense

Utilities Expense