Basic Accounting

• Accounting Cycle •
(1) Identifying and recording
(2) Journalizing
(3) Posting
(4) Trial Balance
(5) Adjusting entries
(6) Adjusted trial balance
(7) Preparing financial statements
(8) Closing
(9) Post closing trial balance
(10) Reversing entries
• Sample Format •
 • Sample Format •
General Journal Sheet sheet No. 15

Date Account PR Debit Credit

2019
Nov-30 Depreciation G_810 4,000.00
Accumulated Depreciation G_250 4,000.00
to record depreciation for November

Nov-30 Bad Debt Expense G_840 1,500.00

Allowance for Doubtful Accounts G_120 1,500.00
to allow for doubtful accounts at the
month end
• Sample Transaction •
The folowing are the transactions for Wedding "R" Us during the month of the May.

Maria Concepcion Jennifer Perez-Manalo is a social entrepreneur from the

south. She is into a lot of interesting causes. Her fine taste is preminent such that
May-01 she is considered an authority in planning weddings. Upon the advice and
prodding of an esteemed colleague, Bendalyn Landicho, Perez Manalo decide to
organize her wedding consultancy. She invested P250,000 into this entity

01 Rented office space and paid two month rents in advance, P8,000.

Maria Concepcion Jennifer Perez-Manalo issued a promissory note for a

P210,000 loan from a metrobank, This availment will be used for acquisition of a
02 service vehicle. The note carries a 20% interest per annum. The arrangement
with the bank is that both the interest and the principal are payable in full one
year.
• Initial Investment (Source of Assets) •

May1 Maria Concepcion Jennifer Perez-Manalo is a social entrepreneur from

the south. She is into a lot of interesting causes. Her fine taste is preminent such
that she is considered an authority in planning weddings. Upon the advice and
prodding of an esteemed colleague, Bendalyn Landicho, Perez Manalo decide to
organize her wedding consultancy. She invested P250,000 into this entity
DATE PR DEBIT CREDIT

May-01 Cash (A) 250,000.00

Perez-Manalo, Capital (OE) 250,000.00

initial investment
• Rent Paid in Advance (Exchange of Assets) •

MAY 1 Rented office space and paid two month rents in advance, P8,000.

DATE PR DEBIT CREDIT

May-01 Prepaid Rent (A) 8,000.00

Cash (A) 8,000.00

to record two months advance payment of

rent
 • Note Issued for Cash (Source of Assets)

MAY 2 Maria Concepcion Jennifer Perez-Manalo issued a promissory

note for a P210,000 loan from a metrobank, This availment will be used for
acquisition of a service vehicle. The note carries a 20% interest per annum.
The arrangement with the bank is that both the interest and the principal are
payable in full one year.
DATE PR DEBIT CREDIT

May-02 Cash (A) 210,000.00

Notes Payable (L) 210,000.00

to record short-term note payable, 20%

interest
 Hired an office assistant and an account executive each with a P7,800
May-02 monthly salary. Or each is to receive P300 per day for the 26 day work
month.

04 Acquired service vehicle for P420,000.

Paid Prudential Guarantee and Assurance, Inc. P14,000 for a one year
04 comprehensive insurance coverage on the service vehicle.

Acquired office equipment from Fair and Square Emporium for

05 P60,000; paying 15,000 in cash and the balance next month.

Purchased supplies on credit for P18,000 from San Jose

08 Merchandising.

09 Paid San Jose Merchandising 10,000 of the amount owed.

May 2 Hired an office assistant and an account executive each
with a P7,800 monthly salary. Or each is to receive P300 per day
for the 26 day work month.

DATE PR DEBIT CREDIT

May-02 no entry (memorandum entry only)

• Service Vehicle Acquired for Cash (Exchange of Assets) •

MAY 4 Acquired service vehicle for P420,000

DATE PR DEBIT CREDIT

May-04 Service Vehicle (A) 420,000.00

Cash (A) 420,000.00

to record acquisition of service vehicle

• Insurance Premium Paid (Exchange of Assets) •

MAY 4 Paid Prudential Guarantee and Assurance, Inc. P14,000 for a

one year comprehensive insurance coverage on the service vehicle

DATE PR DEBIT CREDIT

May-04 Prepaid Insurance (A) 14,000.00

Cash (A) 14,000.00

to record one year insurance for service

vehicle
• Office Equipment Acquired on Account (Exchange and Source of Assets) •

MAY 5 Acquired office equipment from Fair and Square Emporium for
P60,000; paying 15,000 in cash and the balance next month.
NOTE: A compound entry is needed for transaction
DATE PR DEBIT CREDIT
May-05 Office Equipment (A) 60,000.00

Cash (A) 15,000.00

Accounts Payable (L) 45,000.00

to record acquisition of office equipment

on account from Fair and Square
Emporium
• Supplies Purchased on Account (Source of Assets) •

MAY 8 Purchased supplies on credit for P18,000 from San Jose

Merchandising
DATE PR DEBIT CREDIT

May-08 Supplies (A) 18,000.00

Accounts Payable (L) 18,000.00

to record aquisition of supplies on account

fron San Jose Merchandising
• Accounts Payable Partially Settled (Use of Assets) •

MAY 9 Paid San Jose Merchandising 10,000 of the amount owed

DATE PR DEBIT CREDIT

May-09 Accounts Payable (L) 10,000.00

Cash (A) 10,000.00

to record payment for supplies to San Jose

Merchandising
 Coordinated and finalized simple arrangements for three couples and
collected fees of P8,800 per couple. Services include prospecting and
May-10 selecting the church and reception location, couturier, caterer, car, service,
flowers, souveneirs and invitations.

13 Paid salaries P6,600. The entity pays salaries every two saturdays

The entity is earning additional revenues by referring consulting clients to

15 friendly hotels, caterers, printers, and couturiers. Received P10,000
advance fees for three clients referred.

Coordinated and finalized elaborate bridal arrangements for three couples

and billed fees of P12,000 per couple. Additional services include
19 documents preparation, consultation with a feng shui expert as to ideal
wedding date for prosperity and harmony, provision for limousine service
and honeymoon trip.
• Revenues Earned and Cash Collected (Source of Assets) •

MAY 10 Coordinated and finalized simple arrangements for three couples

and collected fees of P8,800 per couple. Services include prospecting and
selecting the church and reception location, couturier, caterer, car, service,
flowers, souveneirs and invitations

DATE PR DEBIT CREDIT

May-10 Cash (A) 8,800.00

Consulting Revenue (OE:I) 8,800.00

to record the service rendered

 • Salaries Paid (Use of Assets) •

MAY 13 Paid salaries P6,600. The entity pays salaries every two
saturdays (refer to the calendar in chapter 4)

DATE PR DEBIT CREDIT

May-13 Salaries Expense (OE:E) 6,600.00

Cash (A) 6,600.00

to record the payment for salaries

• Unearned Revenues Collected (Source of Assets) •

MAY 15 The entity is earning additional revenues by referring

consulting clients to friendly hotels, caterers, printers, and couturiers.
Received P10,000 advance fees for three clients referred.

DATE PR DEBIT CREDIT

May-15 Cash (A) 10,000.00

Unearned Referral Revenue (L) 10,000.00

to record unearned revenue from referring

clients
• Revenues Earned Account (Source of Assets) •

MAY 19 Coordinated and finalized elaborate bridal arrangements for

three couples and billed fees of P12,000 per couple. Additional services
include documents preparation, consultation with a feng shui expert as to
ideal wedding date for prosperity and harmony, provision for limousine
service and honeymoon trip.

DATE PR DEBIT CREDIT

May-19 Accounts Receivable (A) 12,000.00

Consulting Revenue (OE:I) 12,000.00

to record the service rendered on account

May-25 Perez-Manalo withdrew P14,000 for personal expenses.

27 Paid Salaries P7,200

30 Receive the ICC-Bayantel Telephone bill P1,400

30 Received P24,000 from two clients for services billed last May 19

31 Settled the electricity bill of P3,000 for the month

• Withdrawal of Cash by Owner (Use of Assets)

MAY 25 Perez-Manalo withdrew P14,000 for personal expenses

DATE PR DEBIT CREDIT

May-25 Perez-Manalo, Withdrawals (OE) 14,000.00

Cash (A) 14,000.00

to record personal withdrawals

• Salaries Paid (Use of Assets) •

May 27 Paid Salaries P7,200

DATE PR DEBIT CREDIT

May-27 Salaries Expense (OE:E) 7,200.00

Cash (A) 7,200.00

to record payment of salaries

• Expenses Incurred but Unpaid (Exchange of Claims) •

MAY 30 Receive the ICC-Bayantel Telephone bill P1,400

DATE PR DEBIT CREDIT

May-30 Utilities Expense (OE:E) 1,400.00

Utilities Payable (L) 1,400.00

to record the bill from ICC-Bayantel

Telephone
• Accounts Receivable Partially Collected (Exchange of Assets)

MAY 30 Received P24,000 from two clients for services billed last May 19

DATE PR DEBIT CREDIT

May-30 Cash (A) 24,000.00

Accounts Receivable (A) 24,000.00

to record the payment received from May

19 transaction
• Expenses Incurred and Paid •

MAY 31 Settled the electricity bill of P3,000 for the month

DATE PR DEBIT CREDIT

May-31 Utilities Expense (OE:E) 3,000.00

Cash (A) 3,000.00

to record the payment for electricity for

the month