Committed to Transform Man’s life and

Life’s Perspective
Genesis 1:29, NIV 29: Then God said, “I give you every seed- bearing plant on the face of the whole earth and every tree that has fruit with seed in it. They will be
yours for food”.
Hebrews 6:12 NIV 12 We do not want you to become lazy, but to imitate those who through faith and patience inherit what has been promised.
Nehemiah 9:25 NIV 25: They captured fortified cities and fertile land; they took possession of houses filled with all kinds of good things, wells already dug, vineyards,
olive groves and fruit trees in abundance. They ate to the full and were well-nourished; they revealed in your great goodness.
HOUSE RULE
 Free flow discussion
 Break on 10:30am and 2:30pm
 Q and A is allowed anytime
 Open video camera during the entire session
 Interact if necessary
OBJECTIVE
 To discuss basic accounting includes
bookkeeping, principles, and financial statements
 To enumerate financial transactions
 To differentiate income statement vs. balance
sheet
 To create general ledger
BOOKKEEPING
 Proper bookkeeping and a proper financial trail give
companies a reliable measure of how well or how
poor they are doing (CFI Accounting)
 It is proper handling of financial data of the company
 Bookkeeper handles crucial financial data that is
accurate and reliable necessary for decision making
 In lending, define the loan purpose for tax deduction*
UNDERSTANDING CASH OR ACCRUAL
BOOK OF ACCOUNTS

Balance Sheet Income Statement(Fiscal

 Assets –company owns year January-December)
 Liabilities –company  Revenue -receivable
owes  Expenses- payables
 Shareholder’s equity – (operating and non-
owner’s portion of operating)
ownership ;(common-
ordinary share and
preferred shares-fixed
dividend)
ACCOUNTING EQUATION
Current liability
accounts payable, short-
term debt, dividends, and
notes payable as well as
income taxes owed.
Non-current liability
include debentures, long-
term loans, bonds payable,
deferred tax liabilities, long-
term lease obligations, and
pension benefit obligations.
 Retained earnings  Shared capital
 accumulation of profit  Residual amount of asset
that entity made since the after deducting liabilities
starting of business after
deducting the dividend
payments to the
shareholders
JOURNAL ENTRIES (T ACCOUNT)

REF: https://www.cliffsnotes.com/study-guides/accounting/accounting-principles-i/analyzing-and-recording-transactions/t-accounts
GENERAL JOURNAL SAMPLE
GENERAL LEDGER
COMPUTING THE EFFECTIVE INTEREST RATE
METHOD OF COMPUTATION
 ADD ON method – this is the most common method
used by many microlenders.
 The interest whatever it maybe is added to the principal
and divided by terms to get the amortization due.
 However, some microlenders deduct immediately a
certain amount from the loan proceeds as service fee
and other charges.
 There are lenders who deduct interest immediately
before releasing the loan.
INTEREST RATE
 Simple Interest
 Interest is not collected at the time the loan is granted.
 The entire principal is due only at the end of the loan period.
 
 Discount Interest
 Interest is collected at the time the loan is granted.
 The entire principal is due at the end of the loan period.

 Add-on Interest
 Interest is computed based on the entire principal.
 The total interest to be paid is added to the principal. This sum is then
divided by the number of payments the borrower makes.
SIMPLE INTEREST AND EFFECTIVE INTEREST
METHOD OF COMPUTATION

 1. Add on Interest – interest is added to the principal and

divided by the terms.
 Principal – Loan is P10,000, payable in three months,
interest is 5% per month
 Computation:
 P10,000 +P1,500 (total interest for 3 months)
 = P11,500/12 weeks (for weekly) = P958.33
 = P11,500/6 (bi-monthly payment) = P1,916.67
 If there is service charges of 3% or P100 collected in
advance, loan proceeds is P9,700
 One Month Interest Deducted in Advance
 Same term as in no. 1 problem
 P10,000-P800 (one month interest is P500+P300
service charge) loan proceeds is P9,200
 Computation:
 P10,000 + P1,000 (two months interest)
 P11,000/12 weeks = P916.67
 P11,000/6 bi-monthly = P1,833.33
 Total Interest Deducted in Advance
 Same problem as in no.1 computation
 Loan amount P10,000-P1,800 (total interest for 3
months and service charge of P300) loan
proceeds is = P8,200
 P10,000/12 (weekly) = P888.33
 P10,000/6 (bi-monthly) = P1,666.67
THANK YOU ..YOU MAY REACH US..
 SDRC is a 100% Filipino-owned company under SEC
Registration and Certification No. PG201816905 and TIN:
742-305-859-000 with other pertinent documents necessary
for our operation.
 Blk 16 Lt 18 Kiwi St. The Mango Grove,Subd. San
Roque, Sto. Tomas Batangas
 Contact Nos.

GLOBE: (+63) 0956-2833893/

SMART: (+63) 0929-7547625
 email: skillsdevelopment.sdrcco@gmail.com