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Q1 G7-ABM - L07 The Accounting Cycle of A Service Business PDF
Q1 G7-ABM - L07 The Accounting Cycle of A Service Business PDF
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
https://youtu.be/wrnQGqYaQLM
FUNDAMENTALS OF Video Clip
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
https://youtu.be/VSNaRBAzbXo
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service Step 1 - Transactions and/or Events.
Business
Identification and measurement of external transactions and
➢ Lesson Objective
➢ Lesson Introduction
internal events. At this stage, the documents used by the
➢ Video Clip business are analyzed whether it has financial impact or effect.
➢ Lesson Discussion Recall the rule that only financial transactions are recorded and
➢ Recap
➢ Check up Test
that the amount can be measured. These two conditions must
exist in order that a particular transaction is recognized or
recorded. As defined, financial transactions are those activities
that change the value of an asset, liability or an equity
Examples of financial transactions:
Receipt of cash from a client as advance payment to repair a
computer. In this case, asset will increase. At the same time, the
advances from client (liability) will also increase. The advances
from client is a liability because the business has the obligation
to render future service to the client.
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service Payment of electric bill is a financial transaction. This will
Business
decrease the cash (asset) and reduce the income of the business
➢ Lesson Objective at the same time.
➢ Lesson Introduction
➢ Video Clip Examples of non-financial transactions:
➢ Lesson Discussion
➢ Recap ❑ hiring and termination of employees
➢ Check up Test
❑ recognition from the government as most outstanding
business
❑ death of owner
The information needed when recording transactions are taken
from forms used to document these transactions. In a typical
service business, the following are the business documents used:
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business 1. Official Receipt or Cash Receipt
➢ Lesson Objective This document is used when a business receives money or a
➢ Lesson Introduction check. An Official Receipt or Cash Receipt is a document that
➢ Video Clip
➢ Lesson Discussion
acknowledges that money or a check have been received.
➢ Recap 2. Charge Invoice or Sales Invoice
➢ Check up Test
A charge invoice is a document used when a service has been
rendered, but the client will be billed only after a certain number
of days from the date of service. Often, a company will issue a
statement of account to a customer, with the charge or sales
invoice attached. For example: in a laundry business, a customer
may avail of the services of the business. However, that customer
and the owner of the business had a prior agreement that all
services availed by the customer will be paid only after 30 days.
In this case, a charge invoice is issued on the day the client
availed of the services.
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
3. Check or Cash Voucher
The check voucher is a document used when a check is issued to
➢ Lesson Objective
➢ Lesson Introduction pay a certain supplier or vendor. For example, in a laundry
➢ Video Clip business, for the payment of monthly electricity bills, the
➢ Lesson Discussion business may pay either in cash or check. But the company must
➢ Recap
➢ Check up Test prepare a cash or check voucher to support this payment. This
document will serve as a record of payment and, at the same
time, as proof that payment has been made by the company.
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
Rules on Debits and Credits
➢ Lesson Objective
➢ Lesson Introduction ❑ The name of the account to be debited is always listed first.
➢ Video Clip The debited account is listed on the first line with the amount
➢ Lesson Discussion in the left side of the register.
➢ Recap
➢ Check up Test ❑ The credited account is listed on the second line and is usually
indented. The credited amount is recorded on the right side of
the register.
❑ The total amount of debit should always equal the total
amount of credit.
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service Chart of Accounts
Business
The Chart of Accounts is a listing of all account titles used in the
➢ Lesson Objective
➢ Lesson Introduction
business to record all the transactions. It is arranged according to
➢ Video Clip the order of their appearance in the financial statements. Refer
➢ Lesson Discussion to Table X
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service Let us take the case of Pedro Matapang, a computer technician.
Business
Pedro decided to open his computer repair shop on February 14,
➢ Lesson Objective 2016,naming it Matapang Computer Repairs. Pedro knows that
➢ Lesson Introduction
➢ Video Clip business transactions should be separated from personal
➢ Lesson Discussion finances. Thus, he decided to invest PHP200,000 in this business.
➢ Recap
➢ Check up Test He deposited the amount with Nation Bank.
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service Step 3 – Posting
Business
The summary (in specialized journals) or individual transactions
➢ Lesson Objective
➢ Lesson Introduction
(in the general journal) are then posted from the journals to the
➢ Video Clip general ledger (and subsidiary ledgers). Nothing should ever get
➢ Lesson Discussion posted to the ledgers without first being entered in a journal.
➢ Recap
➢ Check up Test Recall the lesson on the general ledger. We will now post the
previous transactions of Pedro to the general ledger. For
purposes of discussion, we will be using the three-column ledger.
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service Step 4 - Unadjusted Trial Balance
Business
At the end of an accounting period (for example, one month or
➢ Lesson Objective
➢ Lesson Introduction
one year) the working trial balance is prepared. This involves
➢ Video Clip copying each account name and account balance to a worksheet
➢ Lesson Discussion (working trial balance). The resulting first two columns of the
➢ Recap
➢ Check up Test
worksheet are called the unadjusted trial balance.
In the preparation of the unadjusted trial balance, the balances
in all the general ledgers at the end of the reporting date are
forwarded to the appropriate column. The unadjusted trial
balance for the transactions in our example from Step 3 is the
following:
FUNDAMENTALS OF Discussion
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Check-up Test - Assessment
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
FUNDAMENTALS OF Check up Test
ACCOUNTANCY, BUSINESS &
MANAGEMENT 1 Grade 11-ABM
The Accounting Cycle of a Service
Business
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Concept
Lesson 07: The Accounting Cycle of a Service
Business
THE END