Accounting Cycle:

Journal - Is a chronological record of the entity's transactions.

Journal Entry - Effects of a business transaction in terms of debits and credits.

The process of recording transaction is called journalizing.

Date - Year and month are not rewritten unless the year or month changes.

Account titles and explanation - The account to be debited is entered at the

extreme left of the first line while the account to be credited is entered slightly
indented on the next line.

P.R - It will be used when entries are posted, that is until the amounts are
transfered/Acc code.

Debit - Amount for each account in the left column.

Credit - Amount for each account in right column.

Rules for Credit and Debit:

+Debit (Dr.)

D = Drawing/With-Drawals
E = Expense
A = Assest

+Credit (Cr.)

L = Liabilty
E = Equity/Owner's Equity
R = Revenue

[May 1]

Cash {Asset} + Debit

Gevera, Capital {Owner's equity} + Credit

- - - - - - - - - - - - - - - - - - - - - - -

[Acct Title & Explanation]

May 01 -

Debit: Cash, P250,000

Credit: Gevera, Captial, P250,000
Explaintion: To record Gevera investment

Debit: Prepaid rent, P8,000

Credit: Cash, P8,000
Explantion: Paid two months'rent in advance

May 02 -

Debit: Cash, P210.000

Credit: Notespayable, P210,000
Explantion: Issued a promissory note for 210K loan from Metrobank
Hired an office assistant - Not to be recorded because it's not a financial
transaction

May 04 -

Debit: Service Vehicle, P420,000

Credit: Cash. P420,000
Explaination: Acquired Serv. Vehicle for P420,000

Debit: Prepaid Insurance, P14,400

Credit: Cash, P14,400
Explaination: Paid one-year comprehensive insurance coverage

May 05 -

Debit: Office Equipment, P60,000

Credit: Cash, P15,000. Accounts Payable, P45,000
Explaination: Acquired Off. Equipment from Fair and Square Emporium P60,000;
paying P15,000 in cash and the balance next month

May 08 -

Debit: Supplies, P18,000

Credit: Accounts Payable, P18,000
Explaination: Purchased supplies on credit

May 09 -

Debit: Accounts Payable, P10,000

Credit: Cash, P10,000
Explaination: Paid P10,000 of the amount owed from San Jose Merchandising

May 10 -

Debit: Cash (8,800 x 3), P26,400

Credit: Consulting Revenues, P26,400
Explaination: Rendered services on buisness entity and collecting 8,800 per
couple

May 13 -

Debit: Salaries Expense, P6,600

Credit: Cash, P6,600
Explaination: Paid Salaries

May 15 -

Debit: Cash, P10,000

Credit: Unearned Referal Revenues, P10,000
Explaination: Received 10,000 advance fees for three clients

May 19 -

Debit: Accounts Receviable (P12,000 x 3), P36,000

Credit: Consulting Revenues, P36,000
Explaination: Rendered services on buisness entity and collecting P12,000 per
couple
May 25 -

Debit: Gevera, w/drawals, P14,000

Credit: Cash, P14,000
Explaination: Withdrew P14,000 from the business for personal expense

May 27 -

Debit: Salaries Expense, P7,200

Credit: Cash, P7,200
Explaination: Paid salaries

May 30 -

Debit: Ultilities Expense, P1,400

Credit: Accounts Payable, P1,400
Explaination: Received telephone bill

Debit: Cash, P24,000

Credit: Accounts Receivable, P24,000
Explaination: Received P24,000 billed last May 19

May 31 -

Debit: Ulititles Expense, P3,000

Credit: Cash, P3,000
Explaination: Settled electrcity bill

- - - - - - - - - - - - - - - - - - - - - - -

May 30 Transaction was entry as;

Debit - Ulti. Exp.

Credit - A/P

It is still acceptable, but looking at the chart of accounts of business entity,

there is N/P, A/P, S/P, and U/P. Since there is U/P, it will be changed to U/P.

- - - - - - - - - - - - - - - - - - - - - - -

[T-Accounts]

A T-account is an informal term for a set of financial records

that use double-entry bookkeeping.

Cash
-------------------------------
250K{8K
210K{420K
26.4K{14.4K
10K{15K
{10K
{6.6K
{14K
{7.2K
{3K
- - - - - - - - -
520.4K - 498.2K
[22.2K]
 Gev, Capital
-------------------------------
[250K]

Pre. Rent
-------------------------------
[8K]

N/P
-------------------------------
[210K

U/P
-------------------------------
[24K]

Serv. Vehicle
-------------------------------
[420K]
Pre. Ins.
-------------------------------
[14.4K]
A/R
-------------------------------
36K{24K

- - - - - - - - -
[12K]
Off. Eqmpt
-------------------------------
[60K]

- - - - - - - - -
A/P
-------------------------------
10K{45K
{18K
- - - - - - - - -
53K
Supplies
-------------------------------
[18K]

- - - - - - - - -
Cons. Rev.
-------------------------------
{26.4K
{36K

- - - - - - - - -
[62.4K]
Sal. Exp
-------------------------------
6.6K{
7.2K{

- - - - - - - - -
[10.8K]
 Unearned R.R
-------------------------------
[10K]

- - - - - - - - -
Gev, w/drawals
-------------------------------
[14K]

- - - - - - - - -
Util. Exp
-------------------------------
1.4K{
3K{
- - - - - - - - -
[4.4K]