Republic of the Philippines

DEPARTMENT OF EDUCATION
Region I
Schools Division Office I Pangasinan
Alvear St. Lingayen, Pangasinan
Tel. No Fax No. (075) 522-2202 (OSDS), (075) 632-8385(ASDS)
E-mail : pangasinan1@deped.gov.ph; Officeofthesdspangasinani@gmail.com
BOLINAO SCHOOL OF FISHERIES
Bolinao, Pangasinan

Competency-Based Curriculum (CBC) for Entrepreneurship for Technical Vocational High School, May 25 – 30, 2009
Copyright Department of Education 2009

Quarter 4

MODULE 1 : Preparing and Maintaining

Financial Records and Reports

DIANA LINDA B. GABARDA

Teacher III

1
 MODULE 1, WEEK 1 to 2
PREPARING AND MAINTAINING
FINANCIAL RECORDS AND REPORTS

What this module is about?

This module covers the knowledge, skills and attitude required to prepare and
maintain financial records and reports.

What you are expected to learn?

 differentiate accounting from bookkeeping;

 appreciate the importance of record keeping to the business.

How to learn from this module?

You are expected to follow the instructions in the module. You are also to
perform such tasks and accomplishing the activities and tasks that would test if
you learned the desired knowledge and skills and formed positive attitudes as go
through the lessons.k

Keep in mind that this test is being administered to determine your pre-
entry knowledge of the lessons to be presented. If you meet some difficulty in
performing the desired tasks, feel free to consult any member of your family,
your friends or your teachers. Good luck!

2
QUARTER 4, WEEK 1

PREPARE AND MAINTAIN FINANCIAL RECORDS AND

REPORTS

An entrepreneur‟s growing concern is to continuously learn and

understand the activities of his or her business. The cash movement, if
properly recorded and kept, can clearly describe the total business picture.

Bookkeeping can guide you in your tasks. The primary rule is to

understand the mechanics of financial records.

ACCOUNTING
 The language of business
 The art of recording, classifying, summarizing in a significant
manner and in terms of money, those transactions and events
which are part, at least of a financial character and interpreted as
the results thereof.

BOOKKEEPING
 The act of recording business and events in systematic and
chronological manner. The person involved in this task is the
bookkeeper. His main job is to record and process data in the
accounting system

3
Using the example on the below, let us illustrate the „Dual Aspect
Convention of Bookkeeping:

Let us assume that the material is Php.1,000.00 per kilo and Php.50.00
per meter so that with these values, you can now sum up in monetary
terms that you bought goods amounting to Php. 13,850.00 (13 kilos X
Php.1,000.00 plus 17 meters X Php 50.00.
It is clear therefore, that the common basis for every bookkeeping record
is the monetary value.

The “Dual Aspect” Convention

The convention is in fact at the very heart of a bookkeeping
system.

Bert brings a kilo of chicken to the market and in exchange he

buys T-shirt from Rene.

Each of the parties in the transaction „received‟ a certain economic

value and „gave‟ an identical value.

Bert „received‟ T-shirt and Rene „received‟ a kilo of

“Gave” a kilo of chicken chicken and “Gave” T-shirt

After the previous example let us assume that Bert buys a t-shirt from Rene
for Php.130.00. We can see here that although we are concerned with a
single commercial transaction (from Bert‟s point of view – buying chicken for
cash, from Rene‟s point of view – selling chicken for cash.) We are still left
with the „dual aspect.‟

Bert „received‟ goods (T-shirt) Rene „received‟ money and

and „Gave‟ money. „Gave‟ goods (T-shirt)

In other words, the language of bookkeeping tends to record a

single transaction in dual manner. One, what the person „received‟ and
the second, what that same person „gave‟.

Debit and Credit Rule

Debit is on the left side of an account journal.

Credit is the right side of an account journal.

4
 Type of To Debit the Account To Credit the Account
Account
1. Personal When the person in When the person in whose
whose name the account name the account is kept is in
is kept is in debt to us. credit with us.
2. Real When the account When the account gives us
received money or money equivalent.
equivalent
3. Profit and Any account that ends Any account that ends with
Loss with the words “Expense the words „Revenue Account”.
Accounts”

COMPREHENSIVE EXAMPLE
1.1 We bought goods from GMC Grocery for an overall sum of Php.100.00
(invoice no.123)
2.1 We sold part of the goods for Php.600.00 cash (receipt no.1950).
3.1 We paid Php.200.00 cash for electricity expenses (expense voucher
no.001)
4.1 We bought a stone from Rene for Php.20,000.00 (invoice no.953)
5.1 We rented the store out for Php.700.00 cash invoice no. 001

In the first part of the solution, the records will be presented in the form of a
“T Account” and they will be presented textually in the second part.

5
QUARTER 4, WEEK 2

T Accounts

Good Accounts GMC Grocery

Debit Credit Debit Credit
(1) 1,000 600 (2) 1,000 (1)

Cash Accounts Electricity Expenses

Debit Credit Debit Credit
(2) 600 200 (3) (3) 20
(5) 700

Stone Accounts Rene Accounts

Debit Credit Debit Credit
(4) 20,000 20,000 (4)

Store Rental Account

Debit Credit
700 (5)

Textual Records (Journal Entries)

Debit Credit
(1) Debit: Goods Account 1,000
Credit: GMC Grocery Account 1,000
1.1 Purchase on credit invoice 123
(2) Debit: Cash Account 600
Credit: Goods Account 600
2.1 Cash Sales Receipt invoice
no.123
(3) Debit: Electricity Expenses 200
Credit: Cash 200
3.1 Cash Payment, expense
voucher 001
(4) Debit: Stone Account 20,000
Credit: Rene Account 20,000
4.1 Purchase of Stone Account 953
(5) Debit: Cash 700
Credit: Income from Rental 700
5.1 Cash rental account
TOTAL: Php. 22,500 22,500

6
Event 1

 The goods account ( a real account) is debited. An

account was received (no.1 in the table)
 The GMC Grocery Account (a personal account) is
credited to receive money (No. 2 in the table)

Event 2

 The cash Account (a real Account) is debited – cash was

received. No.2 in the table
 The goods account (a real account) is credited – the store
issue goods (no. 2 in the table)

Event 3

 The electricity expenses (a profit and loss account) is

debited – every expense account is debited (no. 3 in the
table)

Event 4

 The store account (a real account) is debited. The

transaction received a monetary value (No. 2 in the
table).
 The Rene account (a personal account) is credited –
according to no.1 and 2.

Event 5

 The income from the mental account ( profit and loss

account) is credited – all receipts are a credit (No.3 in
the table)
 The cash account is debited – (No. 2 in the table)

7
 It is easy to remember that every expense account is debited (the
expense is a negative matter from an economic point of view and it is a
debt of the business).
 Similarly, all receipts are a credit (a credit is something positive from
an economic point of view and it is to the credit of the business.

Journalizing Case Problem

CNSAT CATERING SERVICES

Gundaway, Cobarroquis, Quirino

Business Transaction
Date:
2008
August 1 Cash Investment amounting to- Php.10,000.00
Received Group Amounting to- Php.25,000.00
Investment Canteen – equipment- Php.15,000.00
Paid Permit and License Php.500.00
Purchase Merchandise
Php.25,000.00
And paid
Php150.00
Transportation only 90% of the amount purchased was
paid in cash
Purchased liquefied petroleum (LPG) for Php.350.00

8
August 2-6 : Sold cooked food and merchandise for Php.30,000.00 only
95% was collected in cash.

August 7 : Purchased merchandise for Php.20, 000.00 in cash and paid

Php.100.00 for transportation.

August 8 – 15 : Sold merchandise for Php.25,000.00 in cash offered snacks

to visitors amounting to Php.200.00 and recorded it as
sales.
Collected Php.1500.00 of account receivables.
Paid account amounting to Php.2,000.00.
Paid salaries and wage manager/cashier and sales ladies
Php.8,000.00
An inventory merchandise amounted to Php.13,000.00
August 16 - 30 : Purchase liquefied petroleum amounting to Php.350.00.
Sold Merchandise for Php.50.000.00 only 95% were
collected in cash.
Purchase raw food and merchandise Php.40,000.00 and
paid Php.200.00 transportation. Only 0% of the amount
purchased were paid in cash.

August 31 : Received electric and water bills for the month

amounting to Php.1,200.00
Sold cooked food and merchandise for
Php.10,500.00 in cash
Collected accounts receivables amounting to
Php.2,000.00.
Paid trade account amounting to Php.3,500.00.
Paid salaries of manager/cashier and sales lady
Php8,000.00
Bought calculator Php.1,000.00 recorded as canteen
equipment.
Snacks offered to visitors was charged to capital
account.
Received building rental Php1,500.00
Depreciation of canteen equipment Php.250.00 was
recognized
Inventory of Merchandise and raw food were value
Php.19,345.

9
 ACTIVITY 1

A. Directions : Answer the questions honestly. Write the letter of your

choice in your notebook.

1. It is known as the language of business.

a. Accounting
b. Bookkeeping
c. Transaction
d. Posting
2. It refers to recording business and events in systematic and
chronological manner.
a. Bookkeeping
b. Accounting
c. Transaction
d. Liability
3. It is on the left side of an accounting journal.
a. debit
b. credit
c. profit
d. sales
4. It refers to the things of value owned by a business.
a. capital
b. inventory
c. cash
d. asset
5. It is the amount of merchandise sold and valued at selling price.
a. sales
b. receivables
c. purchase
d. proprietorship

10
 ACTIVITY 2

Direction : It is always important to update and keep financial records and

reports. On your own perception express your point of view on the
importance of updating and maintaining financial records and reports by
completing the open sentences below:

1. If a business has clear and accurate financial records, I

__________________________________________________________________
__________________________________________________________________
_______________________________________________.

2. Many successful business undertakings happened because

__________________________________________________________________
__________________________________________________________________
_______________________________________________.

3. If I want to check and see how my business works, I usually

__________________________________________________________________
__________________________________________________________________
_______________________________________________.

ACTIVITY 3

Direction: Classify the following as: A – assets, L – Liabilities,

C – Capital, R – Revenue, and E – Expenses.

Accounts Classification
1. G.M. Capital
2. Land
3. Cash
4. Building
5. Accounts receivables
6. Delivery truck
7. Service Income
8. Sales
9. Prepaid Insurance
10. Accounts Payable

11
 Let us Remember

 The law requires that some forms of records must be kept by all
businesses.
 In the time of keen competition, rising cost and increasing taxes,
there can be no alternative to record keeping.
 There must be complete accounting of all business transactions
to efficiently handle purchases and sales inventory control credit
and collection, depreciation and other expenses.

12