LESSON NUMBER 08

DATES March 28 – April 01, 2022

Fundamentals of Accountancy, Business and
SUBJECT
Management 1
Steps in Accounting Cycle of a Service Business:
ACTIVITY TITLE
Journalizing
Record transactions of a service business in the
LEARNING TARGETS
general journal
REFERENCE(S) Fundamentals of Accountancy, Business and
SOURCE(S) Management 1 by Vibal
AUTHORS Joy S. Rabo, et. Al
JOURNALIZING (Step 2)
2. Journalizing the business transactions

Journalizing is the process of entering a business transaction in

the form of an accounting entry in the “journal” or the so-
called “book of original entry.”

A journal is where business transactions are initially recorded

in chronological order.
2. Journalizing the business transactions

A journal entry has the following important components:

1. Date of transaction
2. Particulars (account titles and explanation)
3. Folio/Account No. (from the chart of accounts)
4. Debit account title/s (from the chart of accounts) and debit
amount/s
5. Credit account title/s (from the chart of accounts) and credit
amount/s
2. Journalizing the business transactions

Moreover, a journal entry can take the form of a simple

journal entry or a compound journal entry.
• A simple journal entry is a journal entry that has one
debit account and one credit account.

• A compound journal entry is a journal entry with more

than one debit account or more than one credit account,
or both.
2. Journalizing the business transactions

Example:
TRANSACTION: On July 1, 2019, Mr. Mercado invested cash of
Ᵽ30,000 and photocopying equipment amounting to Ᵽ30,000 in his
business to be known as JM Photocopying Center.

The following are the journal entries for the above transaction:
 JM Photocopying Center
Chart of Accounts
Assets Owner’s Equity
101 Cash 301 Mercado, Capital
Use this chart of 112 Accounts Receivable 302 Mercado, Drawing
accounts to identify the 112b Allowance for Doubtful Accounts 399 Income Summary
account title/s being
113 Notes Receivable
affected by the
transaction: 114 Interest Receivable
122 Office Supplies
123 Prepaid Rent Revenues
151 Photocopying Equipment 401 Photocopying Revenues
152 Accumulated Depreciation – 402 Interest Income
Photocopying Equipment
153 Furniture and Fixtures 499 Other Income
154 Accumulated Depreciation – Furniture
and Fixtures
199 Other Assets
Chart of Accounts continuation …

Liabilities Expenses
201 Accounts Payable 501 Taxes and License Expense
202 Notes Payable 502 Salaries Expense
203 Salaries Payable 503 Supplies Expense
204 Income Tax Payable 504 Utilities Expense
205 Interest Payable 505 Rent Expense
208 Unearned Photocopying Revenues 506 Depreciation Expense
212 Mortgage Payable 507 Doubtful Accounts Expense
215 Loan Payable 512 Interest Expense
299 Other Liabilities 599 Other Expense
2. Journalizing the business transactions

Examples of simple journal entries follow:

GENERAL JOURNAL

Date Particulars F Debit Credit

(Account Title and Explanation)
2019
July 1 Cash 101 30,000
Mercado, Capital 301 30,000
To record cash investment

1 Photocopying Equipment 151 30,000

Mercado, Capital 301 30,000
To record investment of
photocopying equipment
2. Journalizing the business transactions

An example of a compound journal entry follows:

GENERAL JOURNAL

Date Particulars F Debit Credit

(Account Title and Explanation)
2019
July 1 Cash 101 30,000
Photocopying Equipment 151 30,000
Mercado, Capital 301 60,000
To record investments of cash

and photocopying equipment

 Thanks!
Do you have any questions?
Feel free to contact me in the following:
● Mobile Number:
09954030228 Globe
09617716313 Smart
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● Email: zyfrosales@gmail.com