What I Know

Read the following statements below. Write a / if the statement is correct, otherwise write X.
/ 1. Debit is to enter the amount on the left side of a T- account
/ 2. Credit is to enter the amount on the right side of a T-account
/ 3. Credit is to increase the income account
X 4. Debit is to decrease the cash account
X 5. Credit is to decrease liability account

What's More
Activity 1 Using the answer sheet below, state the accounts and the amounts to be debited and
credited.
1. M. Manzano invested P150,000 in an Auto Repair Shop
2. Purchased repair equipment from M. Bay P15,000 on account
3. Purchased repair supplies P10,000 on cash
4. Completed repair work to Mr. XYZ on credit, P25,000
5. Completed repair work to Ms. Zen on cash, P15,000
6. Paid one half of the amount owed to M. Bay
7. Received P5,000 from Mr. XYZ as partial payment of his account
8. Paid for the gas and oil place in the service car, P600
9. Purchased additional repair equipment on cash, P13,000
10. Completed repair work for A. Martinez on credit, P10,800
11. Paid the salary of the shop helper, P4,000
12. Paid P5,000 for the shop space
13. Withdrew P12,000 for personal use
14. Collected the account due from A. Martinez
15. Received in full the account due from Mr. XYZ
 DEBIT CREDIT
Account Amount Account Amount

10

11

12

13

14

15
Activity 2
Using the information on activity number 1, Use the t-account to analyze the transactions and
determine the ending balances of each account.

Activity 3
For each of the following items, fill in the net effect on asset, liabilities, and equity. Write if there
will be a net increase, and if there will be a net decrease.

EVENT ASSET LIABILITIES OWNERS

EQUITY

1 B.A Roa opened a TV

Repair Shop by investing
P150,000 in the business

2 Paid the rent of the space,

P4,500

3 Purchase shop supplies

P9,000 on cash

4 Purchase shop supplies to J.

Vega on credit P17, 500

5 Paid P15, 000 to creditors

6 Repaired the TV set of M.

Salvador P2,000 on credit

7 Paid the salary of the helper,

P2, 500

8 Paid the telephone bill of the

month P550

9 Received payment from M.

Salvador

10 Paid the amount owed to J.

Vega
What I Have Learned
1. What do you mean by debit and credit?

2. What is T-account? When does a t-account used in analyzing business transactions?

3. Briefly discuss the theory of double-entry system.

4. Reflect on the most valuable skills you have learned about the lesson; How important the
debit and credit as well as the t account on your daily living as a student?

What I Can Do
Analyze the following business transaction of Dr. Kho Clinic using the rules of debit and credits.
State the account and the amount to be debited and credited.

Sept 1 Dr. Kho invested P150,000 into the business.

2 Dr. Kho paid P8,500 to City Hall for a business permit.
3 Dr. Kho paid P10,500 for a one-year insurance.
4 Dr. Kho purchase clinic equipment P55,000 on account.
5 Dr. Kho acquire clinic supplies P78,000 paying one fourth in cash
and the balance is on account.
6 Dr. Kho rendered profession service to a various patients
worth P35,000 on account 7 Dr. Kho collected one half cash on the rendered service to a
various patients dated September 6.
8 Dr. Kho paid the the electricity bill for the month, P1,500
9 Dr. Kho withdraw P5000 from the for personal use
10 Dr. Kho paid the salary of his assistant,
P3000.

Assessment

Identify the following account on their normal classifications either Debit or Credit. Write Dr for
debit and Cr for credit.
1. Wages
2. N, capital
3. G, drawing
4. Accounts payable
5. Cash
6. Notes receivable
7. Utility expenses
8. Supplies
9. Professional fees
10.Prepaid Rent