JOURNALIZING

TRANSACTIONS
• “Transactions in a service business are usually straightforward”.

• Why it is said to be straightforward?

• “ In a service business, it renders service to clients or customers to generate revenues”.

• Give examples of service businesses and describe the transactions that take place in each business.
•Business Transactions
 take place once a business venture starts operation.
 Are the interactions between businesses and other
stakeholders.
 Have to be identified, measured, and documented through
the accounting process.
•Business Transactions or Activities
 Accounting process is the recognition or nonrecognition of
business activities as “accountable” events.
 Not all business activities are accountable .
 An event is accountable or quantifiable when it has an
effect on assets, liabilities and equity.
 TYPES OF BUSINESS
DOCUMENTS
• Identify the knowledge of learners about the sources of documents used in business
transactions before proceeding to the lesson.

• Official Receipts
• Sales Invoices
• Statement of accounts or billing statements
• Deposit slip and withdrawal slip
• Payroll sheet
• Debit and credit memoranda
 DEFINITION OF AN ACCOUNT
• The accounting equation “ assets equal liabilities plus owner’s equity”
ASSETS = LIABILITIES + OWNER’S EQUITY

• An account is an individual accounting record of the movements (increases and decreases) in specific
accounts.
Account Title
Left side for debit Right side for credit

 Asset accounts have normal balances of debit while liability accounts and owner’s equity accounts
have normal balances of credit.
Questions: Enumerate the Accounting Equation.
ASSETS = LIABILITIES + OWNER’s EQUITY

* Accounting has an equation (Assets = Liabilities + Owner’s Equity) which is the step by
step process, Science has Scientific Method of step by step process must be observed.
 GIVE SOME EXAMPLES OF ASSETS,
LIABILITIES AND OWNER’S EQUITY,
REVENUES AND EXPENSES
• Assets ( Cash, Accounts Receivable, Inventory, Prepaid Supplies, Property Plant and
Equipment, Loan Receivable, Petty Cash Fund, )

• Liabilities ( Accounts Payable, Loan Payable, Mortgage Payable, Interest Payable, Salaries
and Wages Payable)

• Owner’s Equity ( Capital and Drawing Account)

• Revenues ( Service Revenue, Sales, Income)
• Expenses (rent Expense, utilities expense, taxes and licenses, interest expense, supplies
expense, miscellaneous expense)
 ACCOUNTING CYCLE OF SERVICE
BUSINESS
• Give the accounting cycle of Service Business
• The learner will read each step and explain by the designated leader of each group.
THE ACCOUNTING CYCLE
 Analyzing business transactions from source documents
 Journalizing the business transactions
 Posting journal entries to the ledger
 Preparing Trial Balance
 Journalizing and Posting adjusting journal entries
 Preparing adjusted trial balance
 Preparing Financial Statements
 Journalizing and posting closing journal entries
 Preparing post-closing trial balance
 Journalizing and posting reversing journal entries
 BUSINESS OR NON-BUSINESS
• Mechanics
• We need 4 groups, designate a leader, each member will collaboratively participate but the
designated leader will represent in giving the answer.
• The group who raise their hands first will be the first to answer, if the answer is correct the
group will be given 2 points but if they are incorrectly answer the question the other group
has a chance to answer but only 1 point will be given to them.
• At Gerald Photocopying Center, many transactions takes place and Gerald the owner of the
business doesn’t know how to identify the transactions – whether business or non-business.
Will you help him with this problem?

• Purchase of bond paper

• Hiring of two personnel
• Received P3,000 cash for service rendered
• Paid salary of personnel
• Appointment of an office supervisor
• Paid Rentals
• Received a bill from electric company
• Operating the business weekend
• This time, learners will answer the transactions using
general journal in journalizing transactions using debit
and credit. They were answer the transaction on the
board. The learners will read first the transaction before
answering it.
• Then after solving all transactions they were compute
for the total assets
 JM MERCADO TRANSACTIONS
PERFORMANCE TASK
Jan. 2 Mr. Mercado invested cash of P30,000 in his business to be known as JM Photocopying
Center
Jan. 3 Mr. Mercado invested a photocopying machine amounting to P30,000
in his business
Jan. 4 Mr. Mercado invested the following in his business: Cash P30,000; and
Photocopying Equipment, P30,000. In addition, his loan Payable of
P50,000 would be assumed by the business.
Jan. 5 Jm Photocopying Center paid P10,000 for the purchase of bond papers
Jan. 7 Mr. Mercado made a P500 cash withdrawal for personal use.
 JOURNALIZED THE
TRANSACTIONS IN THE GENERAL
JOURNAL
Date Particulars Ref. Debit Credit
2019
Jan. 2 Cash P 30,000
Mercado, Capital P 30,000
To record cash investment

3 Photocopying Equipment 30,000

Mercado, Capital 30,000
To record investment of PE
 JOURNALIZED THE
TRANSACTIONS IN THE GENERAL
JOURNAL
Date Particulars Ref. Debit Credit
2019
Jan. 4 Cash P 30,000
Photocopying Equipment 30,000
Loan Payable P 50,000
Mercado, Capital 10,000
To record investment and
liability
 JOURNALIZED THE
TRANSACTIONS IN THE GENERAL
JOURNAL
Date Particulars Ref. Debit Credit
2019
Jan. 5 Unused Supplies 10,000
Cash 10,000
To record purchase of
supplies

Jan. 7 Mercado, drawing 500

Cash 500
To record owner’s drawing
 ACTIVITY
• Journalizing
Bert established a service Business to be known as Bert Photography on August 1, 2015.
During the first month, the following transactions occurred:
Aug. 1 Bert transferred cash of P300,000 from her personal bank account to an
account to be used for her business. He also invested the following:
digital camera, P45,000; manual camera, P25,000; desktop computer
P28,000; photo papers and ink, P14,000; and her personal debts
evidenced by a note which would assumed by the business, P12,000.
Aug. 4 Paid six-month advance rent to Manuel Commercial Complex, P30,000
Aug. 6 Received statement of account from Tag News for advertising this
month, P5,500
Aug. 8 Bought photo enhancing and editing equipment from Miriam Outlet for
P40,000. Bert paid 30% down payment and the balance on account
Aug. 12 Hired office assistant with a monthly salary of P6,000. The office
assistante officially started on Aug. 16, 2015
Aug. 13 Photography services rendered totalled P180,000. Terms 25% cash and the balance settled on
account
Aug. 14 Purchased office sofa set from Maing Designs for P30,000 on account
Aug. 15 Paid various operating expenses during the month: Meeting potential
clients, P4,000; Electricity, P23,000; Telephonce expense, P6,000; and
repairs expense, P2,500
Aug. 18 Photography services rendered totalled P180,000, of which 25% was
settled with an interest-bearing note and the balance on account.
Aug. 20 Received photography advances from a couple for a prenuptial
coverage to be rendered next month P60,000
Aug. 22 Collected 90% of the outstanding receivable from Aug 13 transaction
Aug. 24 Paid in full the statement of account received last Aug 6
Aug. 26 Paid 80% of the outstanding obligation to Miriam Outlet and the
remaining balance, she issued an interest-bearing note
Aug. 28 Paid half of the outstanding obligation to Maing Designs.
Aug. 31 Paid salary of the office assistant for 16 days P3,097
• Bert Photography uses the following account titles:
Cash Photography Supplies Loan Payable
Notes Payable Repairs Expense Bert, Drawing
Furniture and Fixtures Advertising expense Salaries Expense
Advances from Clients Notes Receivable Prepaid Rent
Photography EquipmentOffice Equipment Delivery Vehicle
Photography Service
Revenue Representation Expense Bert, Capital
Salaries Payable Accounts Payable Accounts Receivable
Utilities Expense Interest Receivable Insurance Expense
 GENERAL JOURNAL
Date Particulars Ref. Debit Credit
 GENERAL JOURNAL
Date Particulars Ref. Debit Credit
 GENERAL JOURNAL
Date Particulars Ref. Debit Credit