JOURNALIZING, POSTING (ledger) and TRIAL BALANCE

CHART OF ACCOUNTS:

• A chart of account – is a list of account titles used by the business. It serves as a guide to the
bookkeeper. Such account are divided into sections and each title has a given code number.

AMARA SERVICES
CHART OF ACCOUNTS
ASSETS Proprietorship
011 Cash of Hand 211 Virgil, capital
012 Cash in Bank 212 Virgil, drawing
013 Notes Receivable 213 Revenue and Expenses Summary
014 Interest Receivable Income
015 Accounts Receivable 311 Sales
015a Allowance for bad debts 311a Sales return and allowances
016 Merchandise Inventory 311b Sales discounts
017 Supplies Unused Cost
018 Prepaid Insurance 411 Purchases
019 Furniture and Fixtures 411a Purchases return and allowances
019a Accumulated Depreciation-Furniture 411b Purchase discounts
and Fixtures
020 Equipment 412 Freight in
020a Accumulated Depreciation-Equipment Expenses
021 Land 511 Salary Expenses
022 Building 512 Supply Expenses
022a Accumulated Depreciation-Building 513 Rent Expenses
Liabilities 514 Advertising Expenses
111 Notes Payable 515 Freight out
112 Accounts Payable 516 Bad Debts
113 Interest Payable 517 Depreciation
114 Taxes Payable 518 Light, Water and Telephone
115 Salaries Payable 519 Taxes and Licenses
Other Income 520 Miscellaneous Expenses
611 Interest Income Other Expenses
612 Commission Income 711 Interest Expenses
 • Accounting cycle consist of successive steps starting with the recording of transaction in the book of
accounts and ending with post- closing trial balance;
• The following successive steps:
Journalizing
Posting/ Ledger
Preparation of the Trial Balance
Preparation of the Comprehensive Income Statement
Preparation of the statement of the Owner’s Equity
Preparation of the Statement of Financial Position/Balance Sheet
Preparation of the Post- closing Trial Balance
Preparation of the Closing Entries
Preparation of the statement of the Cash Flows

JOURNALIZING

It is the first step in the accounting cycle.

It is the process of recording business transactions in the journal
A Journal is a book of accounts wherein business transaction for the first time. And it is also called the
book of original entry
(2) kinds of Journal – ( general journal and Special journal)
Types of special journals – (Cash receipts journal, Cash payment journal, sales journal, and purchases
journal)
General journal – is the simplest form of journal wherein the two-column forms may be used.

GENERAL JOURNAL page no._____

DATE: Account titles and Explanation PR/F Debit Credit

A general journal contains the following columns:

Date – the date of the transaction is entered in this column, transaction are recorded in a systematic
manner and in chronological order.
Account titles and explanations - this column contains the debit and credit account and a brief
explanation of the entries
Post reference / Folio – this contains the post reference number of the ledger page in which tha
account are transferred
Debit – contains the amount debited
Credit – contain the amount credited
ILLUSTRATION: (Journalizing, Posting and Trial Balance)

TRANSACTIONS: for the month of September 2019

1 - S. Amara opened a Computer Repair Shop, he called “ AMARA Repair Shop”. He began investing
Php 2,500 in cash and the following asstes: repair tools php 1,200 , repair supplies php 1,500 and a car - Wigo
php 20,000.
2 - Paid php 250 for the newspaper advertising amounting the opening of his shop.
3 - Purchased office tables and filling cabinets from JONNIEL furniture on credit php 6,500
5 - Completed repair work for Exmo on credit php 1,200.
9 - Completed repair work for Mahal Coo php 2,200. Accepting php 1,000 in cash and promised to
pay the balance after (5) days.
15 - Paid the salary of the shop helper php 450.
18 - Paid one-half of the account due to JONNIEL Furniture and issued a promissory note for the
other half.
20 - Exmo paid his account.
25 - Withdrew cash , php 750 for personal use.
28 - Received php 2,500 from Poh Tec for repair service rendered.
30 - Paid the monthly utility bills php 150, Rent php 1,000 and salary php 450.

AMARA REPAIR SHOP

CHART OF ACCOUNTS
ASSETS OWNER’S EQUITY
11 Cash 31 Amara – Capital
12 Account Receivable – Exmo 32 Amara – Drawing
13 Account Receivable – Mahal Coo INCOME
14 Repair Tools 41 Service Income
15 Repair Supplies
16 Furniture and Fixture EXPENSES
17 Car – Wigo 51 Advertising expense
LIABILITIES 52 Salary expense
21 Account Payable – JONNIEL Furniture 53 Utility expense
22 Notes Payable 54 Rent expense
 GENERAL JOURNAL page no._____
DATE: Account titles and Explanation PR/F Debit Credit
Sept 1 Cash 11 2,500
Repair tools 14 1,200
Repair Supplies 15 1,500
Car – Wigo 17 20,000
Amara, Capital 31 25,200
To record the initial investment

2 Advertising expense 51 250

Cash 11 250
Payment of newspaper Ads.

3 Furniture and Fixture 16 6,500

Accounts Payable – Jonniel Furniture 21 6,500
Purchased furnitures on account

5 Account Receivable – Exmo 12 1,200

Service Income 41 1,200
Service rendered on credit

9 Cash 11 1,000
Account Receivable – Mahal Coo 13 1,200
Service Income 41 2,200
Repair service rendered

15 Salary expense 52 450

Cash 11 450
Payment of the salary

18 Account Payable – Jonniel Furniture 21 6,500

Cash 11 3,250
Notes Payable 22 3,250
Payment of the account due.

20 Cash 11 1,200
Account Receivable – exmo 12 1,200
Full payment if his account

25 Amara, Drawing 52 750

Cash 11 750
Drawing of the owner for personal used

28 Cash 11 2,500
Service Income 41 2,500
Repair service rendered
 30 Utility expense 53 150
Cash 11 150
Payment of utility bills

30 Rent expense 54 1,000

Cash 11 1,000
Payment of the rent

Salary expense 52 450

Cash 11 420
Payment of the helper

POSTING TO GENERAL LEDGER:

CASH Acct. No. 11

Date Explanation F Debit Date Explanation F Credit
Sept 1 Initial investment j-1 P2,500 Sept 2 Advertising j-1 P250
9 Serviced rendered 1,000 15 Salary 450
20 Payment fr. Exmo 1,200 18 Partial to J. 3,250
Furniture
28 Service rendered 2,500 25 Drawing acct 750
7,200 30 Utility 150
Rent 1,000
Salary 450
6,300
900
7,200

ACCOUNT RECEIVABLE - Exmo Acct. No. 12

Date Explanation F Debit Date Explanation F Credit
Sept 5 j-1 1,200 Sept 20 1,200

ACCOUNT RECEIVABLE – MAHAL CO0 Acct. no. 12

Date Explanation F Debit Date Explanation F Credit
sept 9 j-1 1,200

REPAIR TOOLS Acct. no. 14

Date Explanation F Debit Date Explanation F Credit
sept 1 j-1 1,200
 REPAIR SUPPLIES Acct. no. 15
Date Explanation F Debit Date Explanation F Credit
sept 1 j-1 1,500

FURNITURE AND FIXTURES Acct. no. 16

Date Explanation F Debit Date Explanation F Credit
sept 3 j-1 6,500

CAR-WIGO Acct. no. 17

Date Explanation F Debit Date Explanation F Credit
sept 1 j-1 20,000

ACCOUNT PAYABLE – JONNIEL FURNITURE Acct. no. 21

Date Explanation F Debit Date Explanation F Credit
sept 18 j-1 6,500 SEPT 3 6,500

NOTES PAYABLE Acct. no. 22

Date Explanation F Debit Date Explanation F Credit
sept j-1 SEPT 18 J-1 3,250

AMARA - CAPITAL Acct. no. 31

Date Explanation F Debit Date Explanation F Credit
Sept 1 j-1 25,200

AMARA - PERSONAL Acct. no. 32

Date Explanation F Debit Date Explanation F Credit
sept 25 j-1 750

SERVICE INCOME Acct. no. 41

Date Explanation F Debit Date Explanation F Credit
Sept 5 j-1 1,200
9 2,200
28 2,500
 5,900

ADVERTISING Acct. no. 51

Date Explanation F Debit Date Explanation F Credit
sept 2 j-1 250

SALARY Acct. no. 52

Date Explanation F Debit Date Explanation F Credit
sept 15 j-1 450
30 450
900

UTILITY EXPENSE Acct. no. 53

Date Explanation F Debit Date Explanation F Credit
sept 30 j-1 150

RENT EXPENSE Acct. no. 54

Date Explanation F Debit Date Explanation F Credit
sept 30 j-1 1,000
PREPARATION OF THE TRIAL BALANCE

AMARA REPAIR SHOP

TRIAL BALANCE
September 30,2019
Particulars Dr Cr
Cash 900
Account Receivable – Mahal Coo 1,200
Repair Supplies 1,500
Repair Tools 1,200
Furniture and Fixtures 6,500
Car – Wigo 20,000
Notes Payable 3,250
Amara – Capital 25,200
Amara – Drawing 750
Service Income 5,900
Advertising 250
Salary 900
Utility 150
Rent 1,000
TOTAL 34,350 34,350