ACCOUNTING TUTORIAL (PART 1) Business:

A = P100 (Pera/Asset)
"BASIC" ACCOUNTING EQUATION" L = P60 (Utang sa Bank)
A = L + OE OE = P40 ("Utang" sa Owner)

Assets = Liabilities + Owner's Equity In simple words, ang Pera ng Business na P100 (ASSET):
P100 = P60 + P40
~ay galing sa utang sa Bank P60 (LIABILITY), at galing sa "utang"
"CHARACTERS" :) sa Owner P40 (OWNER'S EQUITY)
a. BUSINESS = "Ikaw"
b. ASSET = Pag-aari "ng business" A = L + OE
c. LIABILITY = Utang "ng business" sa iba (Ex. Bank) P100 = P60 + P40
d. OWNER'S EQUITY = "Utang" "ng business" sa may-ari (owner)
#REMINDER
#CommonMistake ~In Form, parang ISA lang ang "Business" at "Owner"
Ang "Business" at ang "Owner" ay IISA.. ~Pero in Substance, IKAW lang si " BUSINESS" (at "parang"
pinautang ka lang ng sarili mo)
*MALI po yan. Para maintindihan natin ang Accounting Equation
(A=L+OE), ang una dapat nating isipin ay magkaiba ang ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"BUSINESS" at ang "OWNER"
"DEBIT AND CREDIT"
#HALIMBAWA
BUSINESS(Ikaw) = Buy & Sell ng damit 1. Bumili ka ng Laptop at nagbayad ka ng P50000

~kung ikaw si BUSINESS, kailangan mo ng "pera" pambili ng damit. DEBIT: Laptop 50000
CREDIT: Cash 50000
#QUESTION
Saan manggagaling ang pera? Nagkaroon ka ng Laptop, kaya DEBIT
Nawalan ka naman ng Cash, kaya CREDIT
Answer:
a. Mangungutang sa iba (Ex. Bank) P60 NOTE: (ASSET)
b. "Mangungutang" sa may-ari or owner P40 Pag "nagkakaroon" ka ng Asset(or bagay) = DEBIT
Pag "nawawalan" ka ng Asset (or bagay) = CREDIT
P60 + P40 = P100
Ang pera na ngayon ni "Business" ay P100 ..............................................
2. Bumili ka ng Laptop pero utang, P50,000
DEBIT: Laptop 50000
CREDIT: Accounts Payable 50000
Nagkaroon ka ng Laptop, kaya DEBIT
Nagkaroon ka ng utang(Accounts Payable), kaya CREDIT
NOTE: (LIABILITY or UTANG)
Pag "nagkakaroon" ka ng utang = CREDIT
Pag "nawawalan" ka ng utang = DEBIT
#IMPORTANT
Baliktad ang ASSET at LIABILITY
(ASSET)
DEBIT: pag "nagkakaroon" ka ng Asset(or bagay)
CREDIT: pag "nawawalan" ka ng Asset (or bagay)
(LIABILITY)
CREDIT: pag "nagkakaroon" ka ng utang
DEBIT: pag "nawawalan" ka ng utang
..............................................
3. Binayaran mo na ang utang..
DEBIT: Accounts Payable 50000
CREDIT: Cash 50000
Nawala na ang utang (Accounts Payable), kaya DEBIT.
Nawalan ka din ng Cash, kaya CREDIT.
*Yehey, wala nang utang. :)
..............................................
4. Ginamit mo yung Laptop sa business mong Accounting Tutorial.
Kumita ka ng P20,000 pero "pautang".
DEBIT Accounts Receivable 20,000
CREDIT Service Income 20,000
Nagkaroon ka ng "pautang"(Asset siya kasi makokolekta mo siya),
kaya DEBIT
Nagkaroon ka din ng kita o income, kaya CREDIT.
NOTE: (INCOME or KITA)
Pag "nagkakaroon" ka ng income = CREDIT
..............................................
5. Nakolekta mo na yung pautang mo sa tinuruan mong estudyante
P20,000.
DEBIT Cash 20000
CREDIT Accounts Receivable 20000
Nagkaroon ka ng Cash, kaya DEBIT
Nawalan ka ng pautang(Accounts Recevable), kaya CREDIT
...............................................
6. Nagbayad ka ng P10,000 sa inuupahan mong lugar para sa
tutorial.
DEBIT Expense 10000
CREDIT Cash 10000
Nagkaroon ka ng gastos(expense), kaya DEBIT
Nawalan ka din ng cash, kaya CREDIT.
NOTE: (EXPENSE or GASTOS)
Pag "nagkakaroon" ka ng gastusin = DEBIT
DEBIT (DEAL)
~~~~~~~~~~~~~~~~~~~~~~~~~~~ D-ividends (Drawings)
E-xpenses
Point of view of the BUSINESS: A-sset
L-osses
Increase in Asset
Nagkakaroon ng asset ang business kasi pwedeng CREDIT (GIRLS)
-nanggaling sa inutang niya (ito ang pautang or investment ng G-ains
creditors) I-ncome
-nanggaling sa owner (ito ang initial or additional investment ng R-evenues
owner) L-iabilities
-galing sa serbisyo/benta S-tockholder's (or Owner's) Equity

Decrease in Asset (c) Admin/Tutor Michael

Nawawalan naman ng asset ang business kasi pwedeng
-nagbayad siya ng utang
-ibinalik na yung capital sa owner (withdrawal by the owner)
-may mga gastusin o expenses

Equity/Capital = Investment + Revenue - Expenses -

Drawings(Withdrawal)

Increase in Equity
-Tumataas ang Equity pag mas malaki ang kita(revenue) kaysa sa
gastos(expenses). Ang tawag dito ay "Net Income".
-Pwede rin tumaas ang Equity pag nadadagdagan ang capital(pera o
gamit) ng business.

Decrease in Equity
-Bumababa ang Equity pag mas malaki ang gastos(expenses) kaysa
sa revenue or kita. Ang tawag dito ay "Net Loss".
-Pwede rin bumaba ang Equity pag ibinalik na ang capital(pera o
gamit) sa may-ari. (Withdrawal by the owner)

Normal Balances:
ACCOUNTING TUTORIAL (Part 2) Dahil na kay BUSINESS ang mga ininvest/contributions/puhunan ni
Owner, parang may "Utang" si BUSINESS dahil may "obligation"
"ASSETS" siyang ibalik ang mga yan sa may-ari/owner.

PAALALA: "Mahaba" Again, our POINT of VIEW is the "Business" (not the owner po)
~BAWAL basahin ng mga taong ayaw magka-IDEA sa Accounting :)
**
It takes time to Learn and Understand.
Magkaiba/hiwalay ang "Business" at "Owner" ("Entity" Concept)
The key is "REPETITION. (basahin lamang po ng maraming beses) :) 1. Business = as if an "Artificial being" (our POINT OF VIEW)
2. Owner = Human being
You need Patience, Perseverance.. Sipag, Tiyaga (at Dasal na rin) 😇
~~~~~~~~~~~~~~~~~~~~~~~
Tip:
"Don't MEMORIZE, INTERNALIZE" 😊 #START

~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~

Topic: "ASSETS" ASSETS:

~~~~~~~~~~~~~~~~~~~~ A. Current Assets:

-Cash
#REVIEW -Trading Securities (Marketable Securities) (Fair value through Profit
Assets = Liabilities + Owner's Equity or Loss) (Short-term Investment)
-Accounts Receivable
CHARACTERS" :) -Allowance for Doubtful Accounts (Allowance for Bad debts)
a. BUSINESS = "Ikaw" -Notes Receivable
b. ASSET = Pag-aari "ng business" -Merchandise Inventory*
c. LIABILITY = Utang "ng business" sa iba (Ex. Bank) -Accrued "_____" Income
d. OWNER'S EQUITY = "Utang" "ng business" sa may-ari (owner) -Prepaid Expenses
a. (Supplies/Office Supplies/Store Supplies*)
Tinawag po nating "Utang" or "Obligation" ang Owner's b. (Prepaid Rent, Prepaid Salaries, etc.) - ang keyword ay "PREPAID"
Equity/Capital dahil ang point of view natin ay si "Business" -Advances "TO" Employess (Advances to Suppliers*)
-Other "current" assets

B. Noncurrent Assets
-Land -Accrued "_____" Income
-Building -Prepaid Expenses
-Machinery and Equipment a. (Supplies/Office Supplies/Store Supplies*)
-Furniture & Fixtures b. (Prepaid Rent, Prepaid Salaries, etc.) - ang keyword ay "PREPAID"
-Accumulated Depreciation -Advances "TO" Employess (Advances to Suppliers*)
-Intangible Assets -Other "current" assets***
-Other "noncurrent" assets
**
....................
1. "CASH"
Ang ASSET ay nahahati sa dalawang classifications.
1. "Current" Assets A = L + OE
2. "Noncurrent" Assets 100 =60 + 40

CURRENT = SHORT-TERM (generally, "1 year or less"). Si Business(Ikaw) ay may perang P100 ngayon.
(P60, utang sa bank)
NONCURRENT = LONG-TERM (generally, "more than 1 year") (P40, utang sa owner)

*Siyempre, pag sinabing "general", may exception. Ibig sabihin, Ano ang tawag sa P100?
pwedeng hindi masunod yung guide na "1 YEAR" Yan po ay CASH.
(dahil may tinatawag tayong "Normal operating cycle") CASH = P100
*"CURRENT asset" siya, kasi pwede mo gastusin "anytime" (1 year
~~~~~~~~~~~~~~~~~~~~~~~~~~ or less)

Q: ANO BA ANG MGA HALIMBAWA NG "CURRENT ASSETS"? **

ANS: 2. "ACCOUNTS RECEIVABLE"

Current Assets: ASSUME: Ang "line of busines" mo ay "pagpapautang"

-Cash
-Trading Securities (Marketable Securities) (Fair value through Profit Ngayon, si Business ay nilapitan ng isang kaibigan. Ang sabi niya
or Loss) (Short-term Investment) sayo ay.. "Business, pwedeng "PAUTANG"?
-Accounts Receivable
-Allowance for Doubtful Accounts (Allowance for Bad debts) Dahil may P100 Cash ka, ang sabi mo ay " Sige, pauutangin kita.
-Notes Receivable
-Merchandise Inventory*
At yun ang nangyari. Inabot mo ang P100 sa kanya at walang natira
sa iyo.
Tanong: Magkano na ang asset mo? Zero o P100 pa rin?
Sagot: P100 pa rin.
Oo, nawala yung P100 kaya parang walang asset. Pero nagkaroon
ka naman ng "PAUTANG". Ang pautang ay hindi nahahawakan pero
asset mo pa rin siya.
Ang tawag sa PAUTANG na yan ay "ACCOUNTS RECEIVABLE".
Receivable kasi may "mare-receive" kang bayad o pera.
**
3. "ALLOWANCE FOR DOUBFUL ACCOUNTS"
May experience ka dati na laging "kalahati" lang kung magbayad
itong kaibigan mo (Mabait ka lang talaga kaya lagi mo siyang
pinapautang).
TAKE NOTE: Hindi pa siya nagbabayad sa inutang niyang P100.
Pero iaanticipate mo na yung hindi niya mababayaran. Ang tawag
dito ay "Allowance for Doubtful Accounts". Iaanticipate or ire-record
mo nang "Allowance for Doubtful Accounts" yung kalahati na P50
(P100/2=P50)
Simple Math lang ang accounting di ba? pa divide-divide ka lang. :)
SUMMARY:
Pautang (Accounts Receivable-AR) P100
Anticipated na di babayaran (Allowance for Doubtful Accounts-ADA)
P50
P100(AR)-P50(ADA)
= P50 (ito na lang ang sa tingin mong makokolekta mo sa future).
In Accounting, "NRV or Net Realizable Value" ang tawag dito.
Ang ACCOUNTS RECEIVABLE (or Pautang) ay pwede ring
manggaling sa "services rendered", na hindi mo pa nakokolekta yung
bayad ng client or customer mo.
**
5. "TRADING SECURITIES" (Marketable Securities) (Fair value
through Profit or Loss) (Short-term Investment)
Si Business(IKAW) ay may P100 ngayon
Ang P100 ay ININVEST.
Pag sinabing ininvest, parang "PAUTANG" din yan. Ipapahawak mo
muna sa iba yung pera mo para kumita or madagdagan (Take note:
pwede rin na mabawasan)
Pwede ka mag-invest(or magpautang) sa dalawang ito.
~DEBT Securities (dito, pwede madagdagan ang pera mo ng
tinatawag na "INTEREST")
~EQUITY Securities (dito, pwede madagdagan ang pera mo ng
tinatawag na "DIVIDEND" and "PRICE APPRECIATION)
Example:
Nag-invest ka ng P100. So nawalan ka ng P100.
After ng ilang buwan, binawi mo na yung pera at naging P120.
Paki compute. Magkano po ang sobra?
P120-P100=P20
Ang tawag po sa sobrang P20 ay INTEREST(pag debt security), or
DIVIDEND/PRICE APPRECIATION(pag equity security)
*Simple Illustration lang po ito :)
(Wag muna sa komplikado) Ano yung tawag sa P100 load.
*Answer: Prepaid Expense
Kailan siya naging TRADING SECURITIES?
Yun ay nung time na nag-invest ka. PREPAID EXPENSE:
Nag-invest ka at nawalan ka ng pera. Pero nagkaroon ka naman ng ~PAID but not yet incurred.
"short-term investment" (parang pautang din) na ang tawag ay "Bayad na" pero "di pa nagagamit"
TRADING SECURITIES.
Paano kung nagtext ako at nabawasan ng Piso?
** ~Ang PREPAID EXPENSE mo ay P99 na lang (P100-P1)

6. "MERCHANDISE INVENTORY" In short, ang PREPAID EXPENSE ang yung amount ng load na
"HINDI MO PA NAGAGAMIT".
Si Business (IKAW), ay may P100.
Pinambili mo ng "DAMIT (assuming ang business mo ay "BUY & ~Ganun din pag bumili ka ng ballpen, pencil, or yung mga nabibiling
SELL" or "Merchandising") para ibenta sa mas mahal na halaga. "SUPPLIES" sa NATIONAL BOOKSTORE, "Prepaid Expense" din ang
tawag dun.
BUY: Damit P100
SELL: P120 **

P120-P100=P20. 8. "ADVANCES TO EMPLOYEES"

Kumita ka ng P20.
P100, pinautang sa empleyado. Ang pambayad ay ibabawas na
Ano ang tawag dun sa DAMIT na binibenta mo? lamang sa kanyang sweldo.
*Answer: MERCHANDISE INVENTORY Ang tawag: ADVANCES TO EMPLOYEES

** **

7. "PREPAID EXPENSE" 9. "NOTES RECEIVABLE"

Si Business (IKAW), ay may P100. P100, pinautang pero may kasulatan (PROMISSORY NOTE)-at
Pumunta ka sa 7eleven at pinambili mo ng LOAD. kumikita ng "INTEREST.
Globe or SMART? (ikaw na po mamili :) ) Ang tawag: Notes Receivable

Nung mga oras na inabot mo yung bayad sa cashier, nawalan ka ng **

P100 Cash. Pero nagkaroon naman ng P100 load ang celllphone mo.
10. "ACCRUED INCOME"
 -Accumulated Depreciation(Furniture & Fixtures)
Nagpapaupa ka(ikaw ang may-ari) ng isang room for rent.
Ang paupa mo ay P100 per month. (Take note: walang Accumulated Depreciation-Land)

Walang ka pang natatanggap na pera kahit magkano(Advance man OTHERS:

or Deposit) -Intangible Assets
-Other "noncurrent" assets
Lumipas ang isang buwan. May kinita ka nang P100 para sa isang
buwang upa. **
Pero hindi mo pa natatanggap yung pera.
Kumita ka na, Pero hindi pa natatanggap yung pera. Ang Noncurrent Asset ay Long-term.

Ang tawag: ACCRUED INCOME **NONCURRENT = LONG-TERM (generally, "more than 1 year")
(Earned but not yet received)
Kumita na, hindi pa natatanggap yung pera Kaya siya "Long-term" kasi
-matagal ang buhay niya and/or
*Ito po ay isang uri din ng RECEIVABLE (Parang ACCOUNTS -matagal mo siya pwedeng magamit or mapakinabangan
RECEIVABLE) dahil may "mare-receive" kang pera.
**
~~~~~~~~~~~~~~~~~~~~~~~~
1. "LAND"
#NEXT TOPIC Ito ang "FAVORITE asset" ko kasi ang ganda ng meaning niya.

Ang next topic ay NONCURRENT ASSETS. L-A-N-D

Q: ANO BA ANG EXAMPLES NG NONCURRENT ASSETS L-ove (of GOD)

A-lways "Appreciate" And
ANS: N-ever
D-epreciate :)
PROPERTY, PLANT AND EQUIPMENT or PPE (or FIXED ASSET)
-Land You: Yan ba talaga ang meaning ng Land?
-Building
-Machinery and Equipment Me: Sa ACCOUNTING, siyempre hindi. :)
-Furniture & Fixtures Pinapaalala lang namin sayo na wag mong kalimutan si God. Alam
-Accumulated Depreciation(Building) mo ba na alam Niya ang lahat ng sakripisyo mo?
-Accumulated Depreciation(Machinery & Equipment
Naniniwala kami na lahat ng magaganda at di magagandang
nangyayari sa buhay mo ay nakadisenyo. Disenyo na kailangan (DEPRECIATE= means lumiliit ang value habang tumatagal)
mong pagdaanan para "makumpleto" ka. 😊
ANS:
Example: 2. Building (alam niyo na ito)
Alam mo yung "PUZZLE" di ba? 3. Machinery and Equipment (Ex. Computer, Aircon, etc)
Nilalaro ko ito nung bata ako. Pinagdidikit-dikit ko yung mga piraso 4. Furniture & Fixtures (Ex. Table, Chair, Wall decorations, etc)
para mabuo ang magandang larawan.
Ano naman ang "ACCUMULATED DEPRECIATION"?
Ganun din si God sayo. Ang mga piraso ay yung magaganda at di Example na lang natin yung BUILDING ng school niyo. Kunwari, 10
magagandang nangyayari sa buhay mo. Na kailangan mong years ang buhay niya.
maranasan, para sa dulo ay maging "magandang larawan" ka.
Maging SUCCESSFUL ka. :) BUILDING:
Cost: P100
#TEKA-TEKA, mabalik nga tayo sa Accounting :) :) :) Life: 10 years

APPRECIATE? DEPRECIATE? Ano yun? P100 / 10 years = P10* (Depreciation or pagliit ng value)

APPRECIATE: End of:

~Ito ba yung pag may ginawa kang mabuti sa kaibigan mo, tapos Year 1 100-10*=90 (remaining value)
na-APPRECIATE niya? Year 2 90-10*=80
Ay hindi po. :) Year 3 80-10*=70
Year 4 70-10*=60
Appreciate(Appreciation) means "increase in value". Year 5 60-10*=50
Year 6 50-10*=40
Example: Year 7 40-10*=30
Bumili ka ng Land(Lupain) sa probinsya niyo for P100. Year 8 30-10*=20
After 10 years, ang value ay naging P500. Year 9 20-10*=10
Tumaas yung value. Year 10 10-10*=0 (remaining value)
From P100, naging P500. Tumaas, nag-APPRECIATE.
I hope, nasundan niyo.
Kaya ang LAND ay isang klase ng PPE nag-aAPPRECIATE.
Kung napansin mo, naubos or naging zero ang value sa Year 10.
** Kaya ang tawag na sa BUILDING ay "FULLY DEPRECIATED". Or
simply, wala nang value.
Q: ANO naman yung mga PPE na nagde-DEPRECIATE?
Question: 3.Trademark(Logo, Brand name)
Nasaan yung "Accumulated Depreciation". 4. Franchise (Jollibee, Mcdo, Starbucks, 7eleven, etc)
5. Others
Answer:
Ito yung naipon or "na-aacumulate" na pagbaba ng value (c) Admin/Tutor Michael

*Hindi namin ipapaliwang ang susunod(kasi ang gusto namin ay

kayo ang mag-ANALYZE)

End of
YEAR 1 Accumulated Depreciation = 10
(P100-90)

YEAR 2 Accumulated Depreciation = 20

(100-80) or (10+10)

YEAR 3 Accumulated Depreciation = 30

(100-70) or (10+10+10)

YEAR 4 Accumulated Depreciation = 40

(100-60) or (10+10+10+10)

YEAR 5 Accumulated Depreciation = 50

YEAR 6 Accumulated Depreciation = 60
YEAR 7 Accumulated Depreciation = 70
YEAR 8 Accumulated Depreciation = 80
YEAR 9 Accumulated Depreciation = 90
YEAR 10 Accumulated Depreciation = 100

~~~~~~~~~~~~~~~~~~~~~~

"INTANGIBLE ASSETS"

Examples:
1. Patent (inventions)
2.Copyright (Books, musical composition)
ACCOUNTING TUTORIAL (PART 3) Simulan natin sa "OWNER'S EQUITY"

"LIABILITIES" AND "OWNER'S EQUITY" - INITIAL INVESTMENT by the owner

- ADDITIONAL INVESTMENT by the owner
~~~~~~~~~~~~~~~~~~~~ - REVENUE / INCOME of the business
- EXPENSES of the business
Q: Pag wala ka nang maintindihan at di ka na nag eenjoy sa - DRAWINGS / WITHDRAWAL by the owner
ACCOUNTING TOPICS, di na ba para sayo ang Accountancy?
Isa-isahin natin yan mamaya. 😊
**
~~~~~~~~~~~~~~~~~~~~
A: Let me give you an ANALOGY.
"BASIC" ACCOUNTING EQUATION
For example, may "Boyfriend or Girlfriend" ka. Madalas kayong mag-
away kasi hindi na kayo magkaintindihan. A = L + OE
Assets = Liabilities + Owner's Equity
Pag ganun ba, hindi na kayo pwedeng magkatuluyan?
P100 = P60 + P40
-syempre, pwede pa rin po. Kailangan mo lang pag-aralan ang ugali
niya, at dapat marunong kang "mag-SACRIFICE", "mag-ADJUST" at **
"mag-BALANCE." ❤️
"Ibahin" natin ang EQUATION
Ganun din po sa Accounting topics. Dapat po ay may gagawin ka
para maintindihan mo siya. ☺ A - L = OE

** Assets - Liabilities = Owner's Equity

YOU: Sir.. di po ako maka-relate. SINGLE pa po eh P100 - P60 = P40

ME: Edi JOWAin mo muna si ACCOUNTING 😄😄😄 Nasundan ba?

~~~~~~~~~~~~~~~~~~~~ **

#START Ang ibig sabihin nito ay:

Sa ASSETS na P100,
 3. "REVENUE" or "INCOME
"priority" na mabayaran muna ang LIABILITIES sa Creditors na P60.
"Kita" ng business mo
Kaya ang matitira na lang para sa OWNER ay P40.
4. "EXPENSES"
**
"Gastusin" ng business mo
Kung hahatiin or ibi-break down natin yung natira sa owner na P40,
ito po ay ang mga sumusunod (1 to 5): Sa 3 & 4, ang dapat na goal ay mas malaking REVENUE kaysa
EXPENSE.
(PERO this time, let us change our POINT OF VIEW)
Example:
(Isipin mo naman ngayon na IKAW ang "OWNER") a) Revenue - Expense = Net INCOME
20 - 15 = 5
(Gagawin lang natin 'to para mas madali mong maunawaan)
b) Revenue - Expense = (Net LOSS)
Kung ikaw si OWNER, tanungin mo lang ang sarili mo: 15 - 20 = -(5)
"Kung ihihinto ko na ang Business ko, ano kaya ang mababawi ko
galing sa business ko? (between the two, better ang Net INCOME)

1. "INITIAL INVESTMENT" by the owner. Simple MATH lang ang Accounting di ba? 😄

Nang magtayo ka ng negosyo, yan ang kauna-unahang binigay *

mong puhunan. Pwedeng pera, pwedeng gamit, etc. Investments or
contributions mo ito "before operations" 5. "DRAWINGS / WITHDRAWAL" of the owner

2. "ADDITIONAL INVESTMENT" by the owner. Parang sa ATM card. Pag nagwithdraw ka, may kinuha ka

Dagdag-puhunan. Binigay mo ito "during operations".
Maaaring sa unang taon ay sobrang dami agad ng customers mo
kaya naman nagdagdag ka ng puhunan. Yung dagdag-puhunan na
yan ay ginawa mo "during operations" ng business mo.
DRAWINGS or Temporary withdrawal - ito ang tawag pag ang
kinuha mo ay yung KITA ng business mo (Net INCOME)
PERMANENT WITHDRAWAL - ito ang tawag pag ang kinuha mo ay
ang INVESTMENT mo (yung 1 & 2)

* ~~~~~~~~~~~~~~~~~~~~
EXAMPLE: 50 + 30 + 5 = 85.

Initial investment P50 Kaya lang, may "actual" DRAWINGS siyang P45.
Additional investment P30 Kaya ang natira na lang is 40 (85-45).
Revenue 20
Expenses 15 *GRABE na 'to.. Plus(+) Minus(-) lang pala ang Accounting 😄
Drawings 45 BASIC!!! Kayang-kaya mo!

* **

Q: How much ang NET INCOME If ever mag-decide ang owner na ihinto na ang business ngayon,
P40* na lang ang mababawi niya.
A: Revenue - Expenses = Net Income
20 - 15 = 5 *Pero pwede pang mabago ang amount na yan pag, "na-convert
into cash" ang mga ASSETS bago ibalik sa owner.
Answer is 5
Yan ay dahil sa tinatawag na FAIR VALUE and NET REALIZABLE
* VALUE ng assets (in simple words, "Today's value").

Q: How much ang OWNER'S EQUITY? HALIMBAWA:

A: Beginning Capital(Initial investment) + Additional investment + *Let's go back to the POINT OF VIEW of the "BUSINESS"
Net income - Drawings = Ending Capital (Owner's equity)
50 + 30 + 5 - 45 = P40 A = L + OE

Answer is P40. Panindang damit = Liabilities + Owner's equity

*YUNG P40, yan na lang ang portion ng asset na pwedeng MABAWI
ng owner.
**
Supposedly, ang "mababawi" niya dapat ay yung INITIAL AND
ADDITIONAL INVESTMENT niya (50+30) at yung NET INCOME ng
business (5).
100 = 60 + 40.
Yung halaga ng panindang damit ay P100.
Q: Pwede bang ipambayad yung DAMIT(P100).. sa LIABILITIES
(P60) at sa OWNER (P40)?
Pwede po.. "Gugupitin na lang.." WOW magic.... 😄

Siyempre, alam ko hindi yan ang isasagot mo.
Ang gagawin mo ay, ibebenta yung damit para maging PERA or
CASH. At yung cash na yun ang ibabayad sa LIABILITIES at sa
OWNER.
4. Beginning Capital + Additional Investment - Permanent
Withdrawal + Revenue and Income - Expenses - Drawings = Ending
Capital
*Capital = Owner's Equity

Cost ng Damit: P100 ~~~~~~~~~~~~~~~~~~~~~~~~~~~

A. Nabenta for P100 CASH. REVENUE or Income "vs" EXPENSE

Ibabayad sa Liabilities = P60
Ibabayad sa Owner: P40* A. INCOME = Earnings or Kita'

B. Nabenta for P110 CASH STORY 1:

Ibabayad sa Liabilities = 60 Ang Business ay "Salon". May isang empleyado na ang pangalan ay
Ibabayad sa Owner = 50* "Alma".

C. Nabenta for P80 CASH Nang mag-open ang Salon, may pumasok na isang customer at
Ibabayad sa Liabilities = 60 nagpa-haircut.
Ibabayad sa Owner = 20*
Pagtapos ay nakakolekta ang "Business" ng P100 dahil sa HAIRCUT.
*Priority munang mabayaran ang LIABILITIES, bago ang Owner.
QUESTION:
~~~~~~~~~~~~~~~~~~~~ Ano ang tawag sa P100?

NOTE THESE FORMULAS: ANSWER:

*INCOME = P100 (INCOME = Earnings or Kita')
1. Revenue and Income - Expenses = Net Income or (Net Loss)
B. EXPENSE = Cost or Gastos
2. Beginning Capital + Additional Investment - Permanent
Withdrawal + Net Income - Drawings = Ending Capital STORY 2:
Dahil nagtatrabaho si "Alma" sa Business, kailangan siyang
3. Beginning Capital + Additional Investment - Permanent swelduhan. Ang "binayad" kay Alma ay P70.
Withdrawal - Net Loss - Drawings = Ending Capital
QUESTION:
Ano ang tawag sa P70?
ANSWER:
*EXPENSE = P70 (EXPENSE = Cost or Gastos) **

#SUMMARY B. Notes Payable (SHORT-term)

INCOME: P100 NOTES = Utang "na may kasulatan" (Promissory Note)
(EXPENSE): P70 PAYABLE = Babayaran pa (hindi pa bayad)

= NET INCOME: P30 TANDAAN:

In paying NOTES PAYABLE, may "dagdag-bayad" na "INTEREST"
~~~~~~~~~~~~~~~~~~~~~~~~~~~~ (Interest Expense)

#NextTOPIC **

LIABILITIES C. Accrued "_______" Expense

ACCRUED: Hindi pa Bayad
** EXPENSE: Gastusin

Classification of LIABILITIES ACCRUED EXPENSE = "Hindi pa bayad" na "Gastusin"

~Current Liabilities EXAMPLE:

babayaran within 1 year (1 year o less) -MERALCO Bill
(Hindi ka pa bayad... sa gastusin(electricity) na nagamit or na-
~Noncurrent Liabilities consume ng business mo)
babayaran beyond 1 year (more than 1 year)
**
--------------------------
D. Unearned "_____" Income (Advances from Customers)
#CurrentLiabilities
UNEARNED INCOME
A. Accounts Payable ~nakatanggap ng CASH (Pera)
ACCOUNTS = Utang ~pero hind pa INCOME (Kita')
PAYABLE = Babayaran pa (hindi pa bayad)
STORY(new)
ACCOUNTS PAYABLE = "Utang" na "hindi pa bayad" Pumasok si customer sa Salon mo para "MAGBAYAD" ng P100.
(Pero "BUKAS" pa siya magpapagupit)
Utang ng business sa mga tinatawag na "Trade" creditors.
BUSINESS (Ikaw)
~nakatanggap ng CASH (Pera) *Kung halimbawang nag-LOAN naman sa bangko, pwede ring
~pero hind pa INCOME kasi "BUKAS" pa magpapagupit. gawing Collateral ang other real properties ng business.

TANDAAN: 👍👍👍
May pagkakaiba ang UNEARNED INCOME(General term) at
ADVANCES FROM CUSTOMERS(specific for customers) (c) Admin/Tutor Michael

~~~~~~~~~~~~~~~~~~~~

#NoncurrentLiabilities

E. Notes Payable (LONG-term)

Pareho sa (B.), pero BABAYARAN NG "HIGIT" SA ISANG TAON.

**

F. Bonds Payable (LONG-term)

Pangmatagalang kontrata ng pagkakautang. Mga lima hanggang
sampung taon bago bayaran.
**

G. Mortgage Payable
MORTGAGE: Utang na may SANLA
PAYABLE: Babayaran pa (hindi pa bayad)

STORY:
Bumili ka ng LAND pero di pa bayad (Utang-Mortgage Payable)
*pero yung Land ay nakaSANLA (Collateral)

Anong meaning ng nakaSANLA(Collateral)?

A: Pag hindi nakabayad sa utang na Mortgage Payable, yung

LAND(Collateral) ay ibebenta. Yung pera galing sa benta ay
gagamitin para mabayaran na yung Utang na Mortgage Payable.
ACCOUNTING TUTORIAL (Part 4)
"BASIC ACCOUNTING"
"FORMS" OF BUSINESS ORGANIZATION
1. SINGLE/SOLE PROPRIETORSHIP is a business owned by only ONE
INDIVIDUAL.
2.PARTNERSHIP is an association of "TWO or MORE" persons who
bind themselves to contribute money, property or industry(services)
to a common fund, with the intention of dividing the profits among
themselves.
3. CORPORATION is an artifical being(not natural, like human being)
created by operation of LAW, having the rights of SUCCESSION, and
the POWERS AND ATTRIBUTES expressly authorized by law or
incident to its existence.
4. COOPERATIVE is a legal entity owned and democratically
controlled by its members. Members often have a close association
with the enterprise as producers or consumers of its products or
services, or as its employees.
~~~~~~~~~~~~~~~~~~~~~~~~~~
"TYPES" OF BUSINESS
4.SERVICE BUSINESS. This business renders services to customers
or clients for a fee.
(Sale of SERVICES)
5. MERCHANDISING/TRADING BUSINESS. This business buy goods
or commodities and sell them at a profit.
(Sale of GOODS) (Buy=>Sell)
6. MANUFACTURING BUSINESS. This business makes "finished
goods" from "raw materials" or unassembled parts. It "produces" the
goods that it sells.
(Sale of GOODS) (Buy=>"Produce"=>Sell)
~~~~~~~~~~~~~~~~~~~~~~~~~~
"ELEMENTS" of FS (Financial Statements)
7. INCOME/REVENUE is the gross INFLOW of economic benefits
during the period in the form of INFLOWS or enhancements on
assets or decrease in liabilities that result in increase in equity, other
than those relating to contributions from the owner or owners.
8. EXPENSE is defined as the gross OUTFLOW of economic benefits
during the period in the course of ordinary activities when these
OUTFLOWS result in DECREASE in equity other than those relating
to distribution to owners.
~In simple terms, these are COSTS incurred to produce
income/revenue.
9. ASSETS are defined as RESOURCES controlled by the enterprise
as a result of past transactions and events and from which future
economic benefits are expected to flow to the enterprise.
~In simple terms, these are PROPERTIES owned by the business.
10. LIABILITIES are defined as present OBLIGATIONS of an
enterprise arising from past transactions or events, the settlement of
which is expected to result in an outflow from the enterprise of
resources embodying economic benefits.
~In simple terms, these are the financial obligations or DEBTS of the
business.It is also described as CLAIM of the CREDITORS on the
Assets of the enterprise.
11. OWNER'S EQUITY/CAPITAL represents the CLAIM of the OWNER Current asset. (Contra-Asset)
on the Assets of the business. It is the RESIDUAL INTEREST in the
Assets of the business after deducting all its liabilities. #NOTE: "CONTRA-ASSET" account is the opposite of "ADJUNCT"
account
~~~~~~~~~~~~~~~~~~~~~~~~~~~
In layman's term,
Important: CAPITAL ACOUNT (or EQUITY ACCOUNT) consists of the CONTRA = deducted
following: ADJUNCT = added (Example: Freight In)
a. "Owner's Capital"
b. "Owner's Drawing" 5. NOTES RECEIVABLE are claims supported by promissory note.

~~~~~~~~~~~~~~~~~~~~~~~~~~ Current asset, if short-term. (Also a Current Asset if the problem is

SILENT)
EXAMPLES of "ASSET" Accounts
Noncurrent asset, if long-term.
1. CASH is any medium of exchange that a bank will accept at face
value. It includes coins and currencies, checks, money orders and 6. MERCHANDISE INVENTORY are goods on hand and are available
bank drafts. for sale.

Current asset. Current asset.

2. TRADING SECURITIES are debt and equity securities that are 7. ACCRUED INCOME. Earned but not yet received/collected.
purchased with the intent of selling them in the "near term" or very
soon. Current asset.

Current asset. 8. ADVANCES TO EMPLOYEES. Cash received by employees to be

3. ACCOUNTS RECEIVABLES are claims against debtors or customers
arising from services rendered on account and sale of merchandise
on account.
Current asset.
deducted from their salaries in the future.
Current Asset.
9. PREPAID EXPENSES are expenses PAID IN ADVANCE by the
business ("Paid but not yet incurred").

4. ALLOWANCE FOR DOUBTFUL ACCOUNT relates to the company's Current asset.

receivables which might not be collected.
10. OFFICE/STORE SUPPLIES are being used by the business like
papers, pens, pencils, folders, staplers, etc.
Current asset.
11. LAND is an asset that is not subject to depreciation. It
appreciates (value increases) as time goes by.
Noncurrent asset.
12. BUILDING can be acquired by PURCHASE or by means of
CONSTRUCTION. Construction costs may include materials, labor,
overhead, permit or license, Architect fee, Excavation cost, etc.
Noncurrent asset.
13. MACHINERY & EQUIPMENT includes computers, air-conditioning
units, electric fans, freezers, refrigerators, truck, etc.
Noncurrent asset.
14. FURNITURE AND FIXTURES includes tables, chairs, filing
cabinets, etc.
Noncurrent asset.
15. ACCUMULATED DEPRECIATION. "Total" depreciated cost of a
depreciable asset.
Noncurrent asset. (Contra-asset)
16. INTANGIBLE ASSET is an identifiable non-monetary asset
"without physical substance" or have no physical appearance but are
expected to provide future economic benefits to the company.
Noncurrent asset.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"LIABILITIES"
1. ACCOUNTS PAYABLE are amounts due to creditors for ASSETS
ACQUIRED on account.
(Current Liab)
2. NOTES PAYABLE(short-term) are amounts due to creditors
"within" one year, evidenced by WRITTEN PROMISE to pay.
(Current Liab)
3. ACCRUED EXPENSES are amounts owed to others for UNPAID
EXPENSES.
(Current Liab)
4. UNEARNED INCOME is revenue collected by the business in
advance. (Received/ collected IN ADVANCE, but not yet earned).
(Current Liab)
5. CURRENT PORTION OF LONG-TERM DEBT are portions of
mortgage, notes, bonds and other long-term indebtedness which are
to be paid "WITHIN ONE YEAR" from the Balance Sheet date (or end
of Reporting Period).
(Current Liab)
6. NOTES PAYABLE (long-term) are amounts due to creditors
"beyond" one year, evidenced by WRITTEN PROMISE to pay.
(Noncurrent Liab)
 shows the profit or loss for the period before closing to the capital
7. BONDS PAYABLE is a liability owed by a company to obtain account.
substantial sums of money from lenders to finance the acquisition of
equipment and other needed assets. ~~~~~~~~~~~~~~~~~~~~~~~~~~

(Noncurrent Liab) True or False

8. MORTGAGE PAYABLE. Long-term debt of the business for which 12. The excess of INCOME over EXPENSES is called "NET INCOME".
the business entity has PLEDGED certain assets as SECURITY to the True
creditor. In the event that the debt payments are not made, the
creditor can foreclose or cause the mortgaged asset TO BE SOLD to 13. The excess of EXPENSES over INCOME is called "NET LOSS".
enable the entity to settle the claim. True

(Noncurrent Liab) 14. INCOME "increases" Owner's Equity. True

~~~~~~~~~~~~~~~~~~~~~~~~~~ 15. EXPENSE "decreases" Owner's Equity. True

"OWNER'S EQUITY" 16. ADDITIONAL INVESTMENT "increases" Owner's. True

9. CAPITAL. This account is used to record the "ORIGINAL and 17. OWNER's DRAWING "decreases" Owner's Equity. True
ADDITIONAL INVESTMENTS" of the owner of the business entity. It
is increased by the amount of PROFIT earned during the year or is ~~~~~~~~~~~~~~~~~~~~~~~~~~
decreased by a LOSS.
DEBIT OR CREDIT
#NOTE: This account is also used to record the "PERMANENT
withdrawal" of the owner. Guide:
(PERMANENT withdrawal means withdrawal of INVESTED capital) A = L + OE

10. DRAWINGS/TEMPORARY WITHDRAWALS. Charged to this Look at the equal sign ( = )

account are cash or other assets withdrawn by the owner from the If LEFT: Debit
business for personal use (represented by the owner's share in If RIGHT: Credit
profit)
(Normal Balance)
11. INCOME SUMMARY. It is a temporary account used at the end of 18. INCREASE in ASSET..... DEBIT
the accounting period to close income and expenses. This account 19. INCREASE in LIAB..... CREDIT
20. INCREASE in OE..... CREDIT*
 (Normal Balance) - ADE & LOR 😊
Apply "FRIENDS" and "ENEMIES" of OE
DEBIT (ADE)
Who are the "Friends" of OE? A - sset
-Income, Revenue, Gain (CREDIT)* D -rawings
E - xpense
Who are the "Enemies"
-Expense, Drawings (DEBIT) CREDIT (LOR)
L - iabilities
21. INCREASE in INCOME..... CREDIT O - wner's equity
22. INCREASE in EXPENSE..... DEBIT R - evenue
23. INCREASE in OWNER'S DRAWING..... DEBIT
~~~~~~~~~~~~~~~~~~~~~~~~
NOTE:
(INCREASE in ASSET..... DEBIT) *For DECREASES, just do the "OPPOSITE"
(INCREASE in "CONTRA-ASSET.".... "CREDIT")
24. DECREASE in ASSET..... CREDIT
* 25. DECREASE in LIAB..... DEBIT
26. DECREASE in OE..... DEBIT
(Normal Balance) - DEAL & GIRLS 😊 27. DEREASE in INCOME..... DEBIT
28. DECREASE in EXPENSE..... CREDIT
DEBIT (DEAL) 29. DECREASE in OWNER'S DRAWING..... CREDIT
D-ividends (Drawings)
E-xpenses DECREASE in CONTRA-ASSET..... DEBIT
A-sset
L-osses 30. What is the "NORMAL BALANCE" of Cash, Trading Securities,
Accounts Receivables, Notes Receivables, Accrued Income, Supplies,
CREDIT (GIRLS) Prepaid Expense, Land, Building, Machinery & Equipment, Furniture
G-ains & Fixtures..... DEBIT
I-ncome
R-evenues 31. What is the "NORMAL BALANCE" of Accounts Payable, Notes
L-iabilities Payable, Accrued Expense, Unearned Income, Bonds Payable,
S-tockholder's (or Owner's) Equity Mortgage Payable..... CREDIT

* 32. What is the "NORMAL BALANCE" of Owner's Capital, Revenue or

Income..... CREDIT
 Nominal Accounts are those that comprise the elements of the
33. What is the "NORMAL BALANCE" of Owner's Drawing, Statement of Financial Performance (or INCOME STATEMENT) – the
Expense..... DEBIT revenue and expenses accounts.

34. What is the "NORMAL BALANCE" of Allowance for Doubtful These accounts are called temporary because they are "closed", or
Accounts, Accumulated Depreciation..... CREDIT* put into zero balance, at the end of the accounting period.

*CREDIT, because they are contra-assets *Please note that Owner’s Drawing is NOT an income statement
account, but must also be closed, or put into zero balance, at the
~~~~~~~~~~~~~~~~~~~~~~~~~~~ end of the accounting period.

Definitions, Classifications and Examples of Accounts ---------------------------------------------------------------

I. SUMMARY:
REAL accounts (or PERMANENT accounts)
-REAL accounts (or PERMANENT accounts) -Assets
-Liabilities
The real accounts are -Owner’s Equity
-Assets
-Liabilities and NOMINAL accounts (or TEMPORARY accounts)
-Owner’s Equity/Capital -Income/revenues
-Expenses and
Real accounts are reported in the Statement of Financial Position(or
"BALANCE SHEET"). They are not "closed" at the end of accounting -Owner’s Drawing
period.
---------------------------------------------------------------
---------------------------------------------------------------
II.
-NOMINAL accounts (or TEMPORARY accounts)
The REVENUE Accounts
The nominal accounts are
-Income/revenues Revenue represents the earnings of the business from sales of goods
-Expenses and or service rendered.
-Owner’s Drawing
Revenue accounts have normal CREDIT balance.
Below are some common revenue accounts:
– an account used to summarize sale of goods of a trade or
merchandising business. This includes cash sales and sales on
account.
Service Income – the earning derived from service rendered by a
servicing business to its customers. This includes cash and on
account service.
– the earning derived from services rendered by
a professional or professional servicing firm which could be in cash
or in collectibles to its clients.
– the earning representing the time value of
money derived from promissory notes received by the business,
whether in cash or collectibles in the future.
– the income earned from allowing others to use
property or facility of the business.
– the income derived from the sales
of assets used in the business operation. There is a gain on sale if
the proceeds exceed the book value or cost of disposed asset.
Examples are gain on equipment, gain on sale investments, gain on
sale of land, etc.
---------------------------------------------------------------
The EXPENSES Account
Expenses are cost incurred in conducting the business activities.
Expense accounts have normal DEBIT balances. Some common
expense accounts are as follows:
– the value of merchandise sold
– the amount of supplies consumed or used by
the business during the period. Examples: used in papers, inks,
ballpoint pens, etc.
– the amount paid to service
rendered by the employees in the operation of the business
– the amount of insurance policy incurred
during the current period. Examples: premiums on building
insurance, life insurance, plant insurance, etc.
– the cost of local as well as national
taxes that are incurred and required to be paid in connection with
the conduct of the business.
Example: Cost to acquire mayor’s permit, registration cost of the
building, percentage tax on sales, etc.
"Estimated Expense"
– the estimated amount of losses the
uncollectible accounts arising from credit sales of the current period.
This is also called the debt expense or uncollectible account
expense.
– represents the current periodic cost for
using depreciable plant assets. In accordance with the systemic cost
of depreciable asset should be allocated as expense over its useful
life.
---------------------------------------------------------------

SUMMARY:
Revenue
-Sales
-Service Income
-Professional Fees
-Interest Income
-Rent Income
-Gain on Sales of other Assets
-Others

Expenses
-Cost of Sales
-Supplies Expense
-Salaries and Wages Expenses
-Insurance Expense
-Taxes and Licenses Expenses
-Doubtful Account Expenses
-Depreciation Expense
-Others
ACCOUNTING TUTORIAL - PART 5
2. PAID barangay and municipal TAXES, 3500.
~~~~~~~~~~~~~~~~~~~~~~~~~~
DEBIT: Taxes and Licenses Expense 3500
ASSETS: CREDIT: Cash 3500
Cash, Accounts Receivable, Prepaid Rent, Prepaid Insurance, Office
Supplies. .........................................
Office Building, Office Equipment, Furniture and Fixture.
3. Bought a small office CONDOMINIUM for 500000, giving 250000
LIABILITIES: CASH and signing a MORTGAGE payable in 10 years for the balance.
Accounts Payable, Mortgage Payable
DEBIT: Office Building 500000
CAPITAL (Owner's Equity): CREDIT: Cash 250000
De Asis Capital, De Asis Drawing CREDIT: Mortgage Payable 250000 (500000-250000)

REVENUES: .........................................
Service Income
4. HIRED a secretary with monthly salary of 8500.
EXPENSES:
Salaries and Wages Expense, Repairs and Maintenance Expense, "No Entry"
Taxes and Licenses Expense
.........................................
~~~~~~~~~~~~~~~~~~~~~~~~~~
5. Bought office TABLES AND CHAIRS on CREDIT from Mansion,
#JOURNALIZING Inc., 40000

1. Francis "opened an account " with BPI under the Assisi Business DEBIT: Furniture and Fixture 40000
Agency's name and deposited 850000 CASH. He also "invested" his CREDIT: Accounts Payable 40000
two personal COMPUTERS which he acquired a year ago for 20000
each but with a fair market value of 15000 each. .........................................

DEBIT: Cash 850000 6. BILLED a client for SERVICES rendered, 20000.

DEBIT: Office Equipment 30000 (15000 x 2)
CREDIT: De Asis, Capital 880000 (850000+30000) DEBIT: Accounts Receivable 20000
CREDIT: Service Income 20000
.........................................
......................................... DEBIT: Cash 5000
CREDIT: Service Income 5000
7. Purchases computer INK, COUPON BOND PAPER and BALLPENS
to be used in the office; terms: CASH basis, 4500. .........................................

DEBIT: Office Supplies 4500 12. COLLECTED one half of the AMOUNT DUE FROM CLIENT on #6
CREDIT: Cash 4500 (see #6)

......................................... DEBIT: Cash 10000

8. PAID fifty percent of the amount OWED to Mansion, Inc. (See #5)
DEBIT: Accounts Payable 20000 (40000 x 50%)
CREDIT: Cash 20000
.........................................
9. Francis "WITHDREW" "CASH" of 50000 and two reams of BOND
PAPER worth 1000 for personal use.
DEBIT: De Asis, Drawing 51000 (50000 + 1000)
CREDIT: Cash 50000
CREDIT: Office Supplies 1000
CREDIT: Accounts Receivable 10000 (20000 x 1/2)
.........................................
13. PAID "ONE YEAR RENT" for a special machine to be used in
business operations, 30000.
DEBIT: Prepaid Rent 30000
CREDIT: Cash 30000
.........................................
14. PAID "ONE YEAR INSURANCE" of the office condominium,
25000.

......................................... DEBIT: Prepaid Insurance 25000

10. PAID 400 for the REPAIR of one of the computers
DEBIT: Repairs and Maintenance Expense 400
CREDIT: Cash 400
CREDIT: Cash 25000
.........................................
15. PAID one half of the SALARY of the secretary (see #4)

......................................... DEBIT: Salaries Expense 4250 (8500 x 1/2)

CREDIT: Cash 4250
11. RECEIVED 5000 as payment for the SERVICES rendered to one
of their clients. ~~~~~~~~~~~~~~~~~~~~~~~~
#GENERAL LEDGER Balances =880000 Credit balance

DEBIT BALANCE = Debits > Credits De Asis Drawing

CREDIT BALANCE = Debits < Credits = 51000 Debit balance

Cash (All debits, minus all credits) Service Income

= 477350 Debit Balance = 25000 Credit balance

Accounts Receivable Salaries and Wages Expense

= 10000 Debit balance = 4250 Debit balance

Prepaid Rent Repairs and Maintenance Expense

= 30000 Debit balance = 400 Debit balance

Prepaid Insurance Taxes and Licenses Expense

=25000 Debit balance = 3500 Debit balance

Office Supplies ~~~~~~~~~~~~~~~~~~~~~~~~~~~~

= 3500 Debit balance
#TRIAL BALANCE
Office Building (same balances from General Ledger)
= 500000 Debit balance
Total DEBITS: 1,175,000
Office Equipment Total CREDITS: 1,175,000
=30000 Debit balance
Prepared by: Admin/Tutor Michael
Furniture and Fixture
=40000 Debit balance

Accounts Payable
=20000 Credit balance

Mortgage Payable
=250000 Credit balance

De Asis Capital
"BALANCING" "Bawas"(-) sa OE, pero "Dagdag"(+) sa Expense.... DEBIT

ACCOUNTING TUTORIAL - Part 6 = Drawings:

"Bawas"(-) sa OE, pero "Dagdag"(+) sa Drawings.... DEBIT
(May "EXPLANATION" sa CAPTION ng bawat photo) 👍
**
~~~~~~~~~~~~~~~~~~~~
Additional info: Pag sinabing "nagkaroon ng OE", ang meaning nito
GUIDE: ay..... "NAGKAROON NG OBLIGATION ang BUSINESS" na ibalik sa
may-ari ang,
For beginners, tingin muna sa GUIDE. - mga "Investments" ng Owner
- at "Kinita" ng Business)
Kung maaari ay isulat mo ito sa papel, at tingnan habang sinasagot
ang bawat items. ~Admin/Tutor Michael

Malilito ka sa simula, pero ulit-uliting lang hanggang sa masanay ka

na. 😊

Ito yung guide (paki sulat mo na):

*ASSET
Nagkaroon (+), DEBIT
Nawalan (-), CREDIT

*LIABILITIES
Nagkaroon (+), CREDIT
Nawalan (-), DEBIT

*OWNER'S EQUITY
Nagkaroon (+) ng OE:
=Investment/Capital.... CREDIT
=Revenue or Income.... CREDIT

Nawalan (-) ng OE:

= Expenses:
ACCOUNTING TUTORIAL - PART 7
- RFBT (Regulatory Framework for Business Transactions)
1. CPA Board Exams
2. Career Fields in Accounting - TAX (Taxation)
3. Different Accounting Areas
4. Different Regulatory Bodies - MAS (Management Advisory Services)

~~~~~~~~~~ - AUDITING (Auditing theory and Auditing problems)

1. CPA Board Exams - FAR (Financial Accounting and Reporting)

Q: SINO ang allowed mag-take ng Philippine CPA Board Exam? - AFAR (Advanced Financial Accounting and Reporting)

A: Q: Paano makapasa sa CPA board exam?

- Yung mga graduate sa course na BACHELOR OF SCIENCE IN A: General weighted average of 75% and above
ACCOUNTANCY (with no grades below 65% in any subject)

- Yung may GOOD MORAL CHARACTER **

- Yung hindi napatunayang guilty ng "MORAL TURPITUDE" (like Q: Anong mangyayari pag ang Gen. Ave. ay above 75%, ngunit may
Adultery or Concubinage - pakikiapid) grade na below 65% sa ibang subject(s)

- Filipino citizen. A:

** - CONDITIONAL if 75% and above ang at least 4 subjects (at ang

Q: Tuwing KAILAN ginaganap ang CPA Board Exam?
A: Dalawang beses sa isang taon. May and October.
**
Q: Ilan at Ano ang mga SUBJECTS sa CPA board exam ?
uulitin na lang ay yung subjects na may grade below 75%)
-FAILED if 3 subjects and below lamang ang 75% and above.
*Masasabing CONDITIONAL ang status ng isang examinee kapag
75% and above ang grade niya sa at least 4 subjects (kahit na ZERO
pa ang grade sa natitirang 2 subjects).

A: 6 subjects
*Ang CONDITIONAL examinee ay kailangang mag-exam ulit para E. IASB (International Accounting Standards Board)
kunin ang di naipasang subject(s) within 2 years mula sa exam kung
saan siya na-conditional.

~~~~~~~~~~~~~~~~~~~~

2. Career Fields in Accounting

A. Public Accounting
B. Commerce and Industry / Private Accounting
C. Academe (Education)
D. Government Accounting

~~~~~~~~~~~~~~~~~~~~

3. Different Accounting Areas

A. Basic Accounting / Bookkeeping

B. Financial Accounting
C. Managerial Accounting
D. Auditing
E. Cost Accounting
F. Government Accounting

~~~~~~~~~~~~~~~~~~~~

4. Different Regulatory Bodies

A. PRC (professional Regulation Commission)

B. PRBOA (Professional Regulatory Board of Accountancy)

C. PICPA (Philippine Institute of Certified Public Accountants)

D. FRSC (Financial Reporting Standards Council)

ACCOUNTING TUTORIAL - Part 8
"YES" di ba?.. Wala ka namang magagawa eh. 😄😄😄
"ADJUSTING ENTRIES"
~~~~~~~~~~~~~~~~~~~~
Q: What are the six (6) "Adjusting Entries" of a SERVICE business?
#GAME
A:
Let me discuss the six (6) adjusting entries thru a STORY. 😊
1. Accrued expense
2. Accrued income (including "Accrued Service Income") **
3. Prepaid expense
4. Unearned income (including "Unearned Service Income") Bumili ka ng "OFFICE BUILDING" worth P500.
5. Depreciation expense
6. Doubtful accounts expense / Bad debt expense Ang building na ito ay may dalawang rooms.
Room 1: Gagamitin sa "main business" mong tutorial.
~~~~~~~~~~~~~~~~~~~~ Room 2: Vacant (bakante siya)

PAALALA: "Basahin" **
(Kahit wag munang unawain) 😃😃😃
Next mong ginawa ay bumili ka ng isang CELLPHONE na worth
Halos lahat yata ng nag-BASIC ACCOUNTING, ay sa topic na ito P500 din.
nahirapan.
**
PERO I WANT TO "CHALLENGE" YOU. Aralin mo na ito. Para pag
tinuro na ni Teacher ay may baon ka nang kaalaman at di ka na Next ay pumunta ka sa 7 eleven para bumili ng PREPAID LOAD
masyadong mahirapan. CARD worth P100.

** **

Ngayon ay gagawa muna tayo ng "SUMMARY" ng lahat ng Adjusting Summary:

Entries. - OFFICE BUILDING P500
- CELLPHONE P500
Sa mga susunod na tutorial (simula bukas) ay saka natin iisa-isahin - PREPAID LOAD CARD P100
ang bawat ADJUSTMENTS (1-6)
Total: P1,100
Okay lang ba sayo yun???
 Ang usapan, P60 kada taon ang upa. At makokolekta mo lang ang
Lahat ng ito ay ininvest mo sa itatayo mong "ACCOUNTING bayad at the END OF 2ND YEAR (60 + 60)
TUTORIAL business". 😊
(Date: January 1, 2018)
(Date: January 1, 2018)
~~~~~
~~~~~~~~~~~~~~~~~~~~
~~~~~~~~~~~~~~~~~~~~ SUMMARY (Jan. 1, 2018)

#START na ng business 😊 "ACCOUNTING TUTORIAL BUSINESS"

First: Ni-register mo muna yung PREPAID LOAD CARD sa iyong *"ASSETS":

CELLPHONE. - Office Building P500
- Cellphone P500
Gagamitin mo ito para makahanap ng mga tuturuang STUDENTS - Prepaid Expense (Load) P100
(Text, Call and Surf) - Cash (advance from STUDENT A) P360

** Note: ang "prepaid expense", gaya ng LOAD, ay "nabayaran na"

"pero di pa nagagamit"
TUTORIAL FEE: P120 per year
Total assets: (500 + 500 + 100 + 360)
- STUDENT A: nag-advance payment siya ng P360 (good for 3 = P1460
years). Dito ay nakatanggap tayo ng P360 cash
*"LIABILITY":
- STUDENT B: hindi muna nagbayad - Unearned income (advance from STUDENT A) P360

- STUDENT C: hindi muna nagbayad Note: ang "unearned income" ay isang liability. Utang siya kasi may
natanggap kang P360 cash, ngunit hindi mo pa natuturuan si
** Student A (wala pang service)

Maya-maya ay nilapitan ka ng isang kaibigan. Naghahanap daw siya Kaya ang liability/utang (unearned income) mo kay Student A, ay
ng mauupahan. Kaya ang ginawa mo, pinagamit mo muna yung ang pagtuturo or "service".
bakanteng ROOM 2 bilang room for rent.
*"OWNER'S EQUITY":
- Capital (Investments) P1100
** At the same time, kumita ka na rin ang tutorial business ng para sa
unang taon, P120.
A = L + OE
1460 = 360 + 1100 EFFECT:
mababawasan ang UTANG na service
BALANCE! Amazing!!!! 😃😃😃 madadagdagan ang INCOME

~~~~~~~~~~~~~~~~~~~~ DEBIT: Unearned Service Income 120

~~~~~~~~~~~~~~~~~~~~ CREDIT: Service Income 120

"ITO NA ANG ADJUSTING ENTRIES" **

Q: Ano naman ang mga pwede mong KITA makalipas ang isang (1) STUDENT B & C (ACCRUED SERVICE INCOME)
taon? (Date: December 31, 2018)
Ito ay ACCRUED INCOME(in general). Hindi mo pa nakokolekta ang
A: cash, pero INCOME na siya dahil nagturo ka na ng isang taon.

1. "SERVICE INCOME" Pero mas tama na tawagin itong ACCRUED SERVICE INCOME dahil
Student A P120 (bayad na)® galing ito sa "main business" mo (tutorial)
Student B P120 (di pa rin bayad)
Student C P120 (di pa rin bayad) EFFECT:
-magkakaroon ka ng PAUTANG (Accounts Receivable)
** -magkakaroon ka ng INCOME (Service Income)

STUDENT A: - "UNEARNED INCOME" DEBIT: Accounts Receivable 240

®Yung P360 worth of service (to be rendered in 3 years) ay CREDIT: Service Income 240
tatanggalan na natin ng P120.
(B + C) (120 + 120)
Ito ay dahil may "rendered services" na ngayong taon (1 year).
~~~~~
Kaya sa Dec 31, 2018, P240 na lang ang hindi pa natin nabibigay
kay Student A na serbisyo. 2. "RENT INCOME" P60 (di pa rin bayad)
(P240 na lang ang "unearned income")
Ito ay isang halimbawa ng ACCRUED INCOME na hindi nanggaling sa
Nakakasunod pa ba? "main business" mong tutorial.
May rent income ka nang P60 ngayong YEAR 2018. EFFECT:
-magkakaroon ka ng EXPENSE
Ito ay galing sa ROOM FOR RENT kung saan nakatira na ang -mawawalan(ng value) ang OFFICE BUILDING
kaibigan mo ng isang taon. Kaya lang ay di mo pa nakokolekta ang
bayad as of Dec. 31, 2018 dahil ang usapan ay sa end of 2nd year DEBIT: Depreciation expense
pa ang bayaran (Dec 31, 2019) CREDIT: Accumulated depreciation

Year 2018 = P60 Rent Income (ACCRUED INCOME kasi di pa Note: Accumulated depreciation is a CONTRA-ASSET account. Kaya
nakokolekta as of Dec. 31, 2018) ang effect nito ay "bawas" sa Office Building.

EFFECT: **
-magkakaroon ka ng PAUTANG
-magkakaroon ka ng INCOME 2. DEPRECIATION EXPENSE - Cellphone

DEBIT: Rent Receivable 60 (pagliit ng halaga or "pagkaluma" dahil nagamit mo na ang

CREDIT: Rent Income 60 "Cellphone" ng isang taon)

Sa ibang mga libro, ganito ang ginagawa: DEBIT: Depreciation expense

DEBIT: Accrued Rent Income 60 CREDIT: Accumulated depreciation
CREDIT: Rent Income 60
**
Note: Ang "Accrued Rent Income" ay isang RECEIVABLE account
(Asset po siya) 3. LOAD EXPENSE
(yung gastusin mo sa text, call and surf)
~~~~~~~~~~~~~~~~~~~~
~Ito ay Adjustment for PREPAID EXPENSE
Q: Ano naman ang mga pwede mong mga EXPENSES or GASTUSIN
makalipas ang isang (1) taon? (Date: December 31, 2018) Pag nagtext ka, yan ay NAPAGASTOS ka. Kasi nabawasan yung
LOAD mo.
A:
EFFECT:
1. DEPRECIATION EXPENSE - Office building -magkakaroon ka ng EXPENSE
-mawawalan/mababawasan ka ng PREPAID BALANCE
(pagliit ng halaga or "pagkaluma" dahil nagamit mo na ang "Office
Building" ng isang taon) DEBIT: Load expense
CREDIT: Prepaid expense
 Ipagpalagay natin na si Student C ay lubos na naghihirap financially.
** Malaking posibilidad na hindi siya makakabayad sa parating na due
date.
4. UTILITIES EXPENSE (Meralco)
(yung gastusin mo sa "Electricity") EFFECT:
-magkakaroon ka ng EXPENSE
~Ito ay Adjustment for ACCRUED EXPENSE. -mawawalan/mababawasan ang PAUTANG

Ipagpalagay na di mo pa bayad ang electricity bill. DEBIT: Doubtful account expense

Na-consume na ang electricity sa office mo, pero di ba nababayaran.
EFFECT:
-magkakaroon ka ng EXPENSE (consumed electricity)
-magkakaroon ka ng UTANG
CREDIT: Allowance for doubtful accounts
Note: Allowance for doubtful accounts is a CONTRA-ASSET account.
Kaya ang effect nito ay "bawas" sa Accounts receivable.
👍👍👍

DEBIT: Utilities expense (c) Admin/Tutor Michael

CREDIT: Utilities payable

Sa ibang mga libro, ganito ang ginagawa:

DEBIT: Utilities expense
CREDIT: Accrued Utilities expense

Note: Ang "Accrued Utilities Expense" ay isang PAYABLE account

(Liability po siya)

**

5. DOUBTFUL ACCOUNTS EXPENSE

(para sa student na hindi pa bayad, at maaaring "hindi na talaga
magbabayad")

Candidate dito sina STUDENT B & C.

ACCOUNTING TUTORIAL - PART 9
Original Entry:
"ADJUSTING ENTRIES" - continuation
Debit: Prepaid _____
~~~~~~~~~~~~~~~~~~~~ Credit: Cash

ACCRUALS (Amount: total)

1. Accrued Expense ADJUSTING ENTRY: 😊

ADJUSTING ENTRY: 😊 Debit: _____ expense

Credit: Prepaid _____
Debit: _____ expense
Credit: _____ payable (Amount: used portion)

(Amount: used) **

* B. EXPENSE Method

2. Accrued Income Original Entry:

ADJUSTING ENTRY: 😊 Debit: _____ expense

Credit: Cash
Debit: _____ receivable
Credit: _____ income (Amount: total)

(Amount: earned) ADJUSTING ENTRY: 😊

~~~~~~~~~~~~~~~~~~~~ Debit: Prepaid _____

Credit: _____ expense
DEFERRALS
(Amount: unused portion)
3. Prepaid Expense
~~~~~~~~~~
A. ASSET Method
4. Unearned Income (or Deferred Income)
~~~~~~~~~~~~~~~~~~~~
a. LIABILITY Method
5. Depreciation
Original Entry:
ADJUSTING ENTRY: 😊
Debit: Cash
Credit: Unearned _____ Debit: Depreciation expense - _____
Credit: Accumulated depreciation - _____
(Amount: total)
FORMULA: (straight line method)
ADJUSTING ENTRY: 😊
Cost - Salvage Value / Useful life = Depreciation Expense per year
Debit: Unearned _____
Credit: _____ income **

(Amount: earned portion) 6. Doubtful Accounts (or Bad debts)

** ADJUSTING ENTRY: 😊

b. INCOME Method Debit: Doubtful accounts expense

Credit: Allowance for doubtful accounts
Original Entry:
FORMULA:
Debit: Cash (Accounts Receivable x % uncollectible ) = Allowance for doubtful
Credit: _____ income accounts or ADA

(Amount: total) ADA +(-) "some adjustment" = Doubtful accounts expense

ADJUSTING ENTRY: 😊 ("some adjustment" means: write-off, beginning balance of ADA,

etc)
Debit: _____ income
Credit: Unearned _____ ~~~~~~~~~~~~~~~~~~~~

(Amount: unearned portion)