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SAP B1 on Cloud – Fundamentals of Accounting
Fundamentals of Accounting
EXERCISE WORKBOOK
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FIT ACADEMY l GF King’s Court Bldg II., Chino Roces cor. Delarosa Sts., Makati City 1200, Philippines l Telephone Number: 63.2.759.4348 l www.fitacademy.ph
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Table of Contents
1. Basic Navigation......................................................................................................................................4
Exercise 1.1..............................................................................................................................................4
Exercise 1.2..............................................................................................................................................4
2. Introduction to Fundamentals of Accounting..........................................................................................5
Exercise 2.1..............................................................................................................................................5
3. Chart of Accounts....................................................................................................................................6
Exercise 3.1..............................................................................................................................................6
4. Subsidiary Ledgers...................................................................................................................................7
Exercise 4.1..............................................................................................................................................7
5. The Accounting Cycle...............................................................................................................................8
Journalizing..................................................................................................................................................8
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Exercise 5.1..........................................................................................................................................8
Exercise 5.2..........................................................................................................................................9
Manual Journal Entry and Journal Vouchers.........................................................................................10
Exercise 5.3........................................................................................................................................10
Exercise 5.4........................................................................................................................................11
Exercise 5.5........................................................................................................................................12
Exercise 5.6........................................................................................................................................13
Special Journals (Purchase)....................................................................................................................14
Exercise 5.7........................................................................................................................................14
Exercise 5.8........................................................................................................................................15
Exercise 5.9........................................................................................................................................16
Special Journals (Disbursements)..........................................................................................................17
Exercise 5.10......................................................................................................................................17
Exercise 5.11......................................................................................................................................18
Exercise 5.12......................................................................................................................................19
Special Journals (Sales)..........................................................................................................................20
Exercise 5.13......................................................................................................................................20
Exercise 5.14......................................................................................................................................21
Exercise 5.15......................................................................................................................................22
Special Journals (Collection)..................................................................................................................23
Exercise 5.16......................................................................................................................................23
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Exercise 5.17......................................................................................................................................24
General Ledger..........................................................................................................................................25
Exercise 5.18......................................................................................................................................25
Adjusting Entries........................................................................................................................................26
Exercise 5.19......................................................................................................................................26
Exercise 5.20......................................................................................................................................27
Exercise 5.21......................................................................................................................................28
Unadjusted Trial Balance...........................................................................................................................29
Exercise 5.22......................................................................................................................................29
Adjusted Trial Balance...............................................................................................................................30
Exercise 5.23......................................................................................................................................30
Financial Statements.................................................................................................................................31
Exercise 5.24......................................................................................................................................31
Exercise 5.25......................................................................................................................................32
Period End-Closing.....................................................................................................................................33
Exercise 5.26......................................................................................................................................33
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1. Basic Navigation
Exercise 1.1
Fill each blank with the appropriate words or terminologies that will make the statements correct.
1. The MENU BAR displays at the top of the screen. It contains the Windows standard menu (File, Edit, W window, Help) as well as generic SAP Business One
functions.
2. The TOOL BAR is a collection of icon buttons that grant you easy access to commonly-used functions.
3. Navigation in SAP Business One is done using the MAIN MENU. It arranges the functions of the individual applications in a tree structure.
4. The users of SAP Business One are defined in the User-Setup window.
5. Accessing SAP Business One on Cloud is done using Main menu like Google Chrome, Mozilla Firefox or Safari.
Exercise 1.2
Identify the terminologies being described by each sentence.
1. This is a business management software that allows an organization to use a system of integrated applications to manage the business. It aims to serve as a backbone for your
whole business. SAP BUSINESS ONE
2. This is also known as Internal Cloud, is a cloud based infrastructure operated exclusively for a single organization with all data protected behind an internal
firewall. PRIVATE CLOUD
3. This is also known as External Cloud, is available to the public where data are created and stored on third-party servers. PUBLIC CLOUD
4. This is a key feature of cloud computing where resources can be accessed anywhere (except on limitations set by company's internal control). LOCATION
INDEPENDENCE
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5. This the place where SAP, a European multinational software corporation, was founded in 1972.
GERMANY, HEADQUARTER IN WALLDORF, BADEN WURTTEMBURG
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2. Introduction to Fundamentals of Accounting

Exercise 2.1
1. ACCOUNTING is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial
information.
2. Luca Pacioli, is known as the Father of Accounting.
3. A business entity an organization that uses economic resources or inputs to provide goods or services to customers in exchange for money or other goods
and services.
4. DOUBLE ENTRY BOOKEEPING is the fundamental concept underlying present-day bookkeeping and accounting. This is based on the fact that every financial
transaction has equal and opposite effects in at least two different accounts.
5. ACCRUAL PRINCIPLE is the concept that accounting transactions should be recorded in the accounting periods when they actually occur, rather than in the
periods when there are cash flows associated with them.
6. GOING CONCERN PRINCIPLE is the concept that a business will remain in operation for the foreseeable future.
7. Economic ENTITY principle is the concept that the transactions of a business should be kept separate from those of its owners and other businesses.
8. MONETARY UNIT principle is the concept that a business should only record transactions that can be stated in terms of a unit of currency.
9. Full disclosure principle is the concept that you should include in or alongside the financial statements of a business all of the information that may
impact a reader's understanding of those financial statements.
10. Double entry bookkeeping is used to satisfy the equation that Assets = Liabilities + Equity.
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3. Chart of Accounts
Exercise 3.1
1. Chart of Accounts is a financial organizational tool that provides a complete listing of every account in an accounting system.
2. An Account is a unique record for each type of asset, liability, equity, revenue and expense.
3. The Real accounts reflect the monitory value of the company - stock, assets, debt, etc. These accounts are carried over from one fiscal year to the next.
4. Nominal accounts has to be cleared at the end of each fiscal year through Period End Closing process.
5. Chart of Accounts of SAP Business One can be viewed and managed through the financial module.
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4. Subsidiary Ledgers
Exercise 4.1
What are the purpose of subsidiary ledgers?
It is a ledger designed for the storage of specific types of accounting transactions. Once information has
been recorded in a subsidiary ledger, it is periodically summarized and posted to an account in the
general ledger, which in turn is used to construct the financial statements of a company.
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5. The Accounting Cycle

Journalizing
Exercise 5.1
1. JOURNAL ENTRY is a record of financial transactions in order by date. It is often defined as the book of original entry.
2. Sales Journal is a special or specialized journal i s u s e d to record sales of merchandise to customers.
3. CASH RECEIPT journal is a special journal used to record money received.
4.PURCHASE JOURNAL is a record of all acquisitions made on credit during a period
5. Cash Disbursements Journal is a record kept by accountants to record all financial expenditures made by a company.
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Exercise 5.2
Record the following transactions using the Manual Journal Entry:
On January 20, 2020, the company received billings for the following utilities:
Dr. Light Expense P 6,750
Dr. Water Expense P 4,400
Cr. Accrued Expense Payable P 11,150
On January 25, 2020, billings received were paid for cash.

Dr. Accrued Expense Payable P 11,150
Cr. Cash on Hand P 11,150
Insert the screenshot of your output here:
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Manual Journal Entry and Journal Vouchers

Exercise 5.3
On February 10, 20XX, the owner of the company had an additional cash investment of P 500,000, deposited on the company’s BDO Bank Account.
Dr. Cash in Bank – BDO P 500,000
Cr. Aquino, Capital P 500,000
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Exercise 5.4
On March 15, 20XX, the owner withdrawn some of his cash investment to pay for his personal expenses amounting to P 25,000. The Disbursement Officer
withdrew the amount from the company’s BDO account.
Dr. Aquino, Drawing P 25,000
Cr. Cash in Bank - BDO P 25,000
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Exercise 5.5
On March 30, 20XX, the company recorded a Salary Expense worth of P 100,000, paid for through the company’s BDO Bank Account:
Dr. Salaries and Wages P 100,000
Cr. Cash in Bank, BDO P 100,000
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Exercise 5.6
Create the following entries in journal entry through the journal vouchers.
Date Transaction Amount

April 01, 20XX Sansa Aquino invested office equipment Php 850,000
for the business
April 02, 20XX The owner invested additional cash Php 72,000
through a bank deposit in Metrobank
April 03, 20XX Paid transportation for business related Php 1,750
travels
Submit the screenshot of the journal voucher created and the transaction journal report from April 01, 20XX – April 03, 20XX.
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Special Journals (Purchase)

Exercise 5.7
On April 10, 20XX, the company received the billing from PLDT worth Php 11,200 (tax inclusive). It is to be recorded as Communication Expense on the A/P
invoice.
Screenshot the journal entry created from the A/P invoice.
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Exercise 5.8
On April 11, 20XX, the company received the billing from Philhealth, worth P 3000, for the employees’ recent salary.
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Exercise 5.9
On April 13, 20XX, the company received the billing from SSS, worth P 5000, for the employees’ recent salary.
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Special Journals (Disbursements)

Exercise 5.10
On April 15, 20XX, the invoice from PLDT was paid for by cash (based on Exercise 5.6).
Screenshot the journal entry created from the outgoing payment.
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Exercise 5.11
On April 16, 20XX, the invoice from Philhealth was paid for by cash (based on Exercise 5.7).
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Exercise 5.12
On April 16, 20XX, the invoice from SSS was paid for by cash (based on Exercise 5.8).
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Special Journals (Sales)

Exercise 5.13
On May 2, 20XX, the company billed Mariah Carey for the services it rendered worth P 50,000 (tax exclusive, tax will automatically be computed by the system).
It is to be recorded as Sales and Service Income in the A/R invoice.
Screenshot the journal entry created from the A/R invoice.
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Exercise 5.14
On May 5, 20XX, the company rendered service to a walk-in customer amounted to P 15,000 (tax not yet included). The customer immediately paid cash.
Screenshot the journal entry created from the A/R invoice + Payment.
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Exercise 5.15
On May 9, 20XX, the company rendered service to Elvis Presley amounted to P 80,000 (tax not yet included). It is to be recorded as Sales and Service Income in
the A/R invoice.
Screenshot the journal entry created from the A/R invoice.
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Special Journals (Collection)

Exercise 5.16
On May 9, 20XX, Mariah Carey paid her invoice via Bank Transfer to the company’s Metrobank account with reference number RQL0965YT.
Screenshot the journal entry created from the Incoming Payment.
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Exercise 5.17
On May 10, 20XX, Elvis Presley paid his invoice by cash.
Screenshot the journal entry created from the Incoming Payment.
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General Ledger
Exercise 5.18
Generate the General Ledger as of the date of the latest transaction.
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Adjusting Entries
Exercise 5.19
Assuming the company uses Asset Method in recording prepayments. Perform the adjusting entries based on the transactions below:
On June 1, 20XX, the company paid in advance, 1 year worth of rent, for a total of P 120,000 (P 10,000 per month), from its Cash in Bank – BDO account.
Dr. Prepaid Rent P 120,000

Cr. Cash in Bank – BDO P 120,000
(Adjusting Entry) On December 31, 20XX, recognize the rent expense incurred.
Dr. Rent Expense P 70,000

Cr. Prepaid Rent P 70,000
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Exercise 5.20
Assuming the company uses Expense Method. Perform the adjusting entries based on the transactions below:
On July 15, 20XX, the company bought Office Supplies worth Php 35,000.
Dr. Supplies Expense P 35,000

(Adjusting Entry) On December 31, 20XX, office supplies worth Php 15,000 were used and expensed.
Dr. Office Supplies P 20,000

Cr. Supplies Expense P 20,000
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Exercise 5.21
Perform the adjusting entries based on the transactions below:
On August 1, 20XX, the company bought Office Machinery worth Php 20,000.
Dr. Office Machinery P 20,000

(Adjusting Entry) On December 31, 20XX, Office Machinery was computed to have a depreciated by P 2,500.
Dr. Depreciation Expense – Machinery P 2,500

Cr. Accumulated Depreciation - Machinery P 2,500
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Unadjusted Trial Balance

Exercise 5.22
Generate the unadjusted Trial Balance as of the end of the year.
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Adjusted Trial Balance

Exercise 5.23
Generate the adjusted Trial Balance as of the end of the year.
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Financial Statements
Exercise 5.24
Generate the Balance Sheet as of the end of the year.
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Exercise 5.25
Generate the Income Statement for the year ended 20XX.
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Period End-Closing
Exercise 5.26
Perform Period End Closing for the year 20XX.
Screenshot the closing entries generated in the Transaction Journal Report.
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SAP B1 on Cloud – Fundamentals of Accounting

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

GERMANY, HEADQUARTER IN WALLDORF, BADEN WURTTEMBURG

622235606.docx printed on 10/29/2022 6:04 AM

2. Introduction to Fundamentals of Accounting

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

5. The Accounting Cycle

2. Sales Journal is a special or specialized journal i s u s e d to record sales of merchandise to customers.

3. CASH RECEIPT journal is a special journal used to record money received.

4.PURCHASE JOURNAL is a record of all acquisitions made on credit during a period

622235606.docx printed on 10/29/2022 6:04 AM

On January 25, 2020, billings received were paid for cash.

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Manual Journal Entry and Journal Vouchers

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Dr. Salaries and Wages P 100,000

Cr. Cash in Bank, BDO P 100,000

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Date Transaction Amount

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

622235606.docx printed on 10/29/2022 6:04 AM

Special Journals (Purchase)

Screenshot the journal entry created from the A/P invoice.

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Screenshot the journal entry created from the A/P invoice.

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Screenshot the journal entry created from the A/P invoice.

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Special Journals (Disbursements)

Screenshot the journal entry created from the outgoing payment.

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Screenshot the journal entry created from the outgoing payment.

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Screenshot the journal entry created from the outgoing payment.

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Special Journals (Sales)

Screenshot the journal entry created from the A/R invoice.

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Insert the screenshot of your output here:

622235606.docx printed on 10/29/2022 6:04 AM

Screenshot the journal entry created from the A/R invoice.