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Fabm 1
Fabm 1
DOUBLE-ENTRY
BOOKKEEPING SYSTEM
FUNDAMENTALS OF ACCOUNTANCY, BUSINESS & MANAGEMENT 1
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• The "two sides of the Accounting equation apply
the dual aspect concept. which provides that every
value received must have a corresponding value
parted with or value gave out. This concept is the
basis of debit and credit in recording economic
transactions and events. The two equal sides
define the foundation of the rules of debit and
credit.
• A debit (Lat. Debitum, "a debt") is a value
received in a business transactionwhich must
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• A credit (Lat. Creditus, "a creditor") is the value
parted or value given out within a business
transaction, which must record in the journal.
The place of credit in the equation is on the
right-hand side.
• The Double Entry Bookkeeping is a discovery of
human effort, not science, because of the
business world's evolving complexities. It is the
outcome of continued efforts to meet the
changing necessities of trade. It justifies the
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TYPES OF BOOKKEEPING SYSTEM
1.Single Entry Method is similar to a stand-alone
checkbook. For example, when you make a
deposit, your balance increases, and when you
issue a check, your balance decreases. It gives a
one-sided picture for a single-leggedentry of the
transaction made.
2.Double Entry Method-involves financial data
with equal and opposite effect in every transaction.
For example, when you issue a check, you
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Analyzing the Rules of Debit and Credit in
Business Transactions
As a general rule, a Bookkeeper or an
Accounting clerk must first analyze every
business transaction that happened for the
period. It realizes by understanding the nature
and movement of economic transactions.
Again, it is a must to have mastery in applying
the rules of debit and credit to warrant the GROUP 5
The Rules of Debit and Credit
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This part summarizes the rules of debit & credit in
the accounting equation.
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Let us analyze the given examples of debit and credit entries to some
common transactions.
1. Jose is not able to attend regular
classes due to the COVID-19 pandemic.
He started saving his P40 fare every day
for the whole month of June 2020.
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Let us analyze the given examples of debit and credit entries to some
common transactions.
1. Jose is not able to attend regular
classes due to the COVID-19 pandemic.
He started saving his P40 fare every day
for the whole month of June 2020.
June 30, 2020 Cash P800
Jose, Savings P800
GROUP 5
Let us analyze the given examples of debit and credit entries to some
common transactions.
1. Jose is not able to attend regular
classes due to the COVID-19 pandemic.
He started saving his P40 fare every day
for the whole month of June 2020.
June 30, 2020 Cash P800
Jose, Savings P800
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2. Ben bought some supplies that he
will use to answer all the activities in
the modules while studying at home
that cost him P300 for July 2020.
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2. Ben bought some supplies that he
will use to answer all the activities in
the modules while studying at home
that cost him P300 for July 2020.
July 31, 2020 School Supplies P300
Cash P300
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2. Ben bought some supplies that he
will use to answer all the activities in
the modules while studying at home
that cost him P300 for July 2020.
July 31, 2020 School Supplies P300
Cash P300
:. To record the expenses paid by Ben.
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3. Maria paid his miscellaneous for
the School Year 2020-2021,
amounting to P560 on August 31,
2020.
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3. Maria paid his miscellaneous for
the School Year 2020-2021,
amounting to P560 on August 31,
2020.
August 30, 2020 Miscellaneous
P560
Cash P560
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3. Maria paid his miscellaneous for
the School Year 2020-2021,
amounting to P560 on August 31,
2020.
August 30, 2020 Miscellaneous
P560
Cash P560
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Applying the Rules of Debit and Credit in
Business Transactions
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The following transactions appeared in the books of
Growee for December 2020.
December 2020
• 3 Received payments for the rendered services
amounting to P15,000.00.
• 8 Collected payments for the rendered services
amounting to P8,000.00.
• 16 Paid utilities expense amounting to P3,000.00; Gas
and Oil amounting to P2,000.00 and repair amounting
to P3,000.00. GROUP 5
• 20 Received payments for the rendered services
amounting to P7,500.00.
• 25 Collected payments for the rendered services
amounting to P5,000.00.
• 27 Paid utilities expense amounting to P750.00.
• 30 Paid rent expense amounting to P10,000.00 and
salaries expense amounting to P9,000.00.
• 31 The owner withdrew P5,000.00.
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Applying the rules of debit and credit entries for the
foregoing transactions of Growee for December 2020,
the General Journal (GL) has the following account
titles with their corresponding balances.
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Let us summarize the effects of debit and credit entries
based on the foregoing transactions in the accounting
equation of Growee for December 2020. GROUP 5
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