ACCOUNTING TUTORIAL (PART 1) Nagkaroon ka ng gastos(expense), kaya DEBIT

"BASIC" ACCOUNTING EQUATION" Nawalan ka din ng cash, kaya CREDIT.

A = L + OE NOTE: (EXPENSE or GASTOS)
Assets = Liabilities + Owner's Equity Pag "nagkakaroon" ka ng gastusin = DEBIT
P100 = P60 + P40 ~~~~~~~~~~~~~~~~~~~~~~~~~~~
Point of view of the BUSINESS:
"CHARACTERS"  :)

a. BUSINESS = "Ikaw" Increase in Asset

b. ASSET = Pag-aari "ng business" Nagkakaroon ng asset ang business kasi pwedeng
c. LIABILITY = Utang "ng business" sa iba (Ex. Bank) -nanggaling sa inutang niya (ito ang pautang or investment ng creditors)
d. OWNER'S EQUITY = "Utang" "ng business" sa may-ari (owner) -nanggaling sa owner (ito ang initial or additional investment ng owner)
-galing sa serbisyo/benta
#CommonMistake
Ang "Business" at ang "Owner" ay IISA.. Decrease in Asset
Nawawalan naman ng asset ang business kasi pwedeng
*MALI po yan. Para maintindihan natin ang Accounting Equation (A=L+OE), -nagbayad siya ng utang
ang una dapat nating isipin ay magkaiba ang "BUSINESS" at ang "OWNER" -ibinalik na yung capital sa owner (withdrawal by the owner)
#HALIMBAWA -may mga gastusin o expenses
BUSINESS(Ikaw) = Buy & Sell ng damit Equity/Capital = Investment + Revenue - Expenses - Drawings(Withdrawal)
~kung ikaw si BUSINESS, kailangan mo ng "pera" pambili ng damit. Increase in Equity
#QUESTION -Tumataas ang Equity pag mas malaki ang kita(revenue) kaysa sa
Saan manggagaling ang pera? gastos(expenses). Ang tawag dito ay "Net Income".
Answer: -Pwede rin tumaas ang Equity pag nadadagdagan ang capital(pera o gamit) ng
a. Mangungutang sa iba (Ex. Bank) P60 business.
b. "Mangungutang" sa may-ari or owner P40 Decrease in Equity
P60 + P40 = P100 -Bumababa ang Equity pag mas malaki ang gastos(expenses) kaysa sa
Ang pera na ngayon ni "Business" ay P100 revenue or kita. Ang tawag dito ay "Net Loss".
-Pwede rin bumaba ang Equity pag ibinalik na ang capital(pera o gamit) sa
Business: may-ari. (Withdrawal by the owner)
A = P100 (Pera/Asset)
L = P60 (Utang sa Bank) Normal Balances:
OE = P40 ("Utang" sa Owner) DEBIT (DEAL)
In simple words, ang Pera ng Business na P100 (ASSET): D-ividends (Drawings)
E-xpenses
~ay galing sa utang sa Bank P60 (LIABILITY), at galing sa "utang" sa Owner A-sset
P40 (OWNER'S EQUITY) L-osses
A = L + OE CREDIT (GIRLS)
P100 = P60 + P40 G-ains
#REMINDER I-ncome
~In Form, parang ISA lang ang "Business" at "Owner" R-evenues
~Pero in Substance, IKAW lang si " BUSINESS" (at "parang" pinautang ka lang L-iabilities
ng sarili mo) S-tockholder's (or Owner's) Equity
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"DEBIT AND CREDIT" ACCOUNTING TUTORIAL (Part 2)
1. Bumili ka ng Laptop at nagbayad ka ng P50000 "ASSETS"
DEBIT: Laptop 50000 PAALALA: "Mahaba"
CREDIT: Cash 50000
~BAWAL basahin ng mga taong ayaw magka-IDEA sa Accounting  :)

Nagkaroon ka ng Laptop, kaya DEBIT

It takes time to Learn and Understand.
Nawalan ka naman ng Cash, kaya CREDIT
NOTE: (ASSET) The key is "REPETITION. (basahin lamang po ng maraming beses)  :)

Pag "nagkakaroon" ka ng Asset(or bagay) = DEBIT You need Patience, Perseverance.. Sipag, Tiyaga (at Dasal na rin) 😇
Pag "nawawalan" ka ng Asset (or bagay) = CREDIT Tip:
.............................................. "Don't MEMORIZE, INTERNALIZE" 😊
2. Bumili ka ng Laptop pero utang, P50,000 ~~~~~~~~~~~~~~~~~~~~
DEBIT: Laptop 50000 Topic: "ASSETS"
CREDIT: Accounts Payable 50000 ~~~~~~~~~~~~~~~~~~~~
Nagkaroon ka ng Laptop, kaya DEBIT #REVIEW
Nagkaroon ka ng utang(Accounts Payable), kaya CREDIT Assets = Liabilities + Owner's Equity
NOTE: (LIABILITY or UTANG)
Pag "nagkakaroon" ka ng utang = CREDIT CHARACTERS"  :)

Pag "nawawalan" ka ng utang = DEBIT a. BUSINESS = "Ikaw"

#IMPORTANT b. ASSET = Pag-aari "ng business"
Baliktad ang ASSET at LIABILITY c. LIABILITY = Utang "ng business" sa iba (Ex. Bank)
(ASSET) d. OWNER'S EQUITY = "Utang" "ng business" sa may-ari (owner)
DEBIT: pag "nagkakaroon" ka ng Asset(or bagay) Tinawag po nating "Utang" or "Obligation" ang Owner's Equity/Capital dahil ang
CREDIT: pag "nawawalan" ka ng Asset (or bagay) point of view natin ay si "Business"
(LIABILITY) Dahil na kay BUSINESS ang mga ininvest/contributions/puhunan ni Owner,
CREDIT: pag "nagkakaroon" ka ng utang parang may "Utang" si BUSINESS dahil may "obligation" siyang ibalik ang mga
DEBIT: pag "nawawalan" ka ng utang yan sa may-ari/owner.
.............................................. Again, our POINT of VIEW is the "Business" (not the owner po)
3. Binayaran mo na ang utang.. **
DEBIT: Accounts Payable 50000 Magkaiba/hiwalay ang "Business" at "Owner" ("Entity" Concept)
CREDIT: Cash 50000 1. Business = as if an "Artificial being" (our POINT OF VIEW)
Nawala na ang utang (Accounts Payable), kaya DEBIT. 2. Owner = Human being
Nawalan ka din ng Cash, kaya CREDIT. ~~~~~~~~~~~~~~~~~~~~~~~
#START
*Yehey, wala nang utang.  :)

~~~~~~~~~~~~~~~~~~~~~~~
..............................................
ASSETS:
4. Ginamit mo yung Laptop sa business mong Accounting Tutorial. Kumita ka
ng P20,000 pero "pautang". A. Current Assets:
-Cash
DEBIT Accounts Receivable 20,000 -Trading Securities (Marketable Securities) (Fair value through Profit or Loss)
CREDIT Service Income 20,000 (Short-term Investment)
Nagkaroon ka ng "pautang"(Asset siya kasi makokolekta mo siya), kaya DEBIT -Accounts Receivable
Nagkaroon ka din ng kita o income, kaya CREDIT. -Allowance for Doubtful Accounts (Allowance for Bad debts)
NOTE: (INCOME or KITA) -Notes Receivable
Pag "nagkakaroon" ka ng income = CREDIT -Merchandise Inventory*
-Accrued "_____" Income
.............................................. -Prepaid Expenses
5. Nakolekta mo na yung pautang mo sa tinuruan mong estudyante P20,000. a. (Supplies/Office Supplies/Store Supplies*)
b. (Prepaid Rent, Prepaid Salaries, etc.) - ang keyword ay "PREPAID"
DEBIT Cash 20000
-Advances "TO" Employess (Advances to Suppliers*)
CREDIT Accounts Receivable 20000
-Other "current" assets
Nagkaroon ka ng Cash, kaya DEBIT
B. Noncurrent Assets
Nawalan ka ng pautang(Accounts Recevable), kaya CREDIT
-Land
............................................... -Building
6. Nagbayad ka ng P10,000 sa inuupahan mong lugar para sa tutorial. -Machinery and Equipment
-Furniture & Fixtures
DEBIT Expense 10000
-Accumulated Depreciation
CREDIT Cash 10000
-Intangible Assets
-Other "noncurrent" assets *Simple Illustration lang po ito  :)

(Wag muna sa komplikado)

....................
Kailan siya naging TRADING SECURITIES?
Ang ASSET ay nahahati sa dalawang classifications. Yun ay nung time na nag-invest ka.
1. "Current" Assets Nag-invest ka at nawalan ka ng pera. Pero nagkaroon ka naman ng "short-term
2. "Noncurrent" Assets investment" (parang pautang din) na ang tawag ay TRADING SECURITIES.
CURRENT = SHORT-TERM (generally, "1 year or less"). **
NONCURRENT = LONG-TERM (generally, "more than 1 year") 6. "MERCHANDISE INVENTORY"
*Siyempre, pag sinabing "general", may exception. Ibig sabihin, pwedeng hindi Si Business (IKAW), ay may P100.
masunod yung guide na "1 YEAR" Pinambili mo ng "DAMIT (assuming ang business mo ay "BUY & SELL" or
(dahil may tinatawag tayong "Normal operating cycle") "Merchandising") para ibenta sa mas mahal na halaga.
~~~~~~~~~~~~~~~~~~~~~~~~~~ BUY: Damit P100
Q: ANO BA ANG MGA HALIMBAWA NG "CURRENT ASSETS"? SELL: P120
ANS: P120-P100=P20.
Kumita ka ng P20.
Current Assets:
-Cash Ano ang tawag dun sa DAMIT na binibenta mo?
-Trading Securities (Marketable Securities) (Fair value through Profit or Loss) *Answer: MERCHANDISE INVENTORY
(Short-term Investment) **
-Accounts Receivable
-Allowance for Doubtful Accounts (Allowance for Bad debts) 7. "PREPAID EXPENSE"
-Notes Receivable Si Business (IKAW), ay may P100.
-Merchandise Inventory* Pumunta ka sa 7eleven at pinambili mo ng LOAD.
-Accrued "_____" Income
-Prepaid Expenses Globe or SMART? (ikaw na po mamili   )
:)

a. (Supplies/Office Supplies/Store Supplies*) Nung mga oras na inabot mo yung bayad sa cashier, nawalan ka ng P100
b. (Prepaid Rent, Prepaid Salaries, etc.) - ang keyword ay "PREPAID" Cash. Pero nagkaroon naman ng P100 load ang celllphone mo.
-Advances "TO" Employess (Advances to Suppliers*) Ano yung tawag sa P100 load.
-Other "current" assets*** *Answer: Prepaid Expense
** PREPAID EXPENSE:
1. "CASH" ~PAID but not yet incurred.
A = L + OE "Bayad na" pero "di pa nagagamit"
100 =60 + 40 Paano kung nagtext ako at nabawasan ng Piso?
Si Business(Ikaw) ay may perang P100 ngayon. ~Ang PREPAID EXPENSE mo ay P99 na lang (P100-P1)
(P60, utang sa bank) In short, ang PREPAID EXPENSE ang yung amount ng load na "HINDI MO PA
(P40, utang sa owner) NAGAGAMIT".
Ano ang tawag sa P100? ~Ganun din pag bumili ka ng ballpen, pencil, or yung mga nabibiling
Yan po ay CASH. "SUPPLIES" sa NATIONAL BOOKSTORE, "Prepaid Expense" din ang tawag
CASH = P100 dun.
*"CURRENT asset" siya, kasi pwede mo gastusin "anytime" (1 year or less) **
** 8. "ADVANCES TO EMPLOYEES"
2. "ACCOUNTS RECEIVABLE" P100, pinautang sa empleyado. Ang pambayad ay ibabawas na lamang sa
ASSUME: Ang "line of busines" mo ay "pagpapautang" kanyang sweldo.
Ngayon, si Business ay nilapitan ng isang kaibigan. Ang sabi niya sayo ay.. Ang tawag: ADVANCES TO EMPLOYEES
"Business, pwedeng "PAUTANG"? **
Dahil may P100 Cash ka, ang sabi mo ay " Sige, pauutangin kita. 9. "NOTES RECEIVABLE"
At yun ang nangyari. Inabot mo ang P100 sa kanya at walang natira sa iyo. P100, pinautang pero may kasulatan (PROMISSORY NOTE)-at kumikita ng
Tanong: Magkano na ang asset mo? Zero o P100 pa rin? "INTEREST.
Ang tawag: Notes Receivable
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. 10. "ACCRUED INCOME"

Ang tawag sa PAUTANG na yan ay "ACCOUNTS RECEIVABLE". Receivable Nagpapaupa ka(ikaw ang may-ari) ng isang room for rent.
kasi may "mare-receive" kang bayad o pera. Ang paupa mo ay P100 per month.

** Walang ka pang natatanggap na pera kahit magkano(Advance man or Deposit)

3. "ALLOWANCE FOR DOUBFUL ACCOUNTS" Lumipas ang isang buwan. May kinita ka nang P100 para sa isang buwang
upa. 
May experience ka dati na laging "kalahati" lang kung magbayad itong kaibigan Pero hindi mo pa natatanggap yung pera.
mo (Mabait ka lang talaga kaya lagi mo siyang pinapautang). Kumita ka na, Pero hindi pa natatanggap yung pera.
TAKE NOTE: Hindi pa siya nagbabayad sa inutang niyang P100. Ang tawag: ACCRUED INCOME
Pero iaanticipate mo na yung hindi niya mababayaran. Ang tawag dito ay (Earned but not yet received)
"Allowance for Doubtful Accounts". Iaanticipate or ire-record mo nang Kumita na, hindi pa natatanggap yung pera
"Allowance for Doubtful Accounts" yung kalahati na P50 (P100/2=P50) *Ito po ay isang uri din ng RECEIVABLE (Parang ACCOUNTS RECEIVABLE)
dahil may "mare-receive" kang pera.
Simple Math lang ang accounting di ba? pa divide-divide ka lang. 
~~~~~~~~~~~~~~~~~~~~~~~~
:)

SUMMARY:
Pautang (Accounts Receivable-AR) P100 #NEXT TOPIC
Anticipated na di babayaran (Allowance for Doubtful Accounts-ADA) P50 Ang next topic ay NONCURRENT ASSETS.
P100(AR)-P50(ADA) Q: ANO BA ANG EXAMPLES NG NONCURRENT ASSETS
= P50 (ito na lang ang sa tingin mong makokolekta mo sa future). In ANS:
Accounting, "NRV or Net Realizable Value" ang tawag dito.
PROPERTY, PLANT AND EQUIPMENT or PPE (or FIXED ASSET)
Ang ACCOUNTS RECEIVABLE (or Pautang) ay pwede ring manggaling sa -Land
"services rendered", na hindi mo pa nakokolekta yung bayad ng client or -Building
customer mo. -Machinery and Equipment
** -Furniture & Fixtures
5. "TRADING SECURITIES" (Marketable Securities) (Fair value through Profit -Accumulated Depreciation(Building)
or Loss) (Short-term Investment) -Accumulated Depreciation(Machinery & Equipment
-Accumulated Depreciation(Furniture & Fixtures)
Si Business(IKAW) ay may P100 ngayon
Ang P100 ay ININVEST. (Take note: walang Accumulated Depreciation-Land)
Pag sinabing ininvest, parang "PAUTANG" din yan. Ipapahawak mo muna sa OTHERS:
iba yung pera mo para kumita or madagdagan (Take note: pwede rin na -Intangible Assets
mabawasan) -Other "noncurrent" assets
Pwede ka mag-invest(or magpautang) sa dalawang ito. **
~DEBT Securities (dito, pwede madagdagan ang pera mo ng tinatawag na Ang Noncurrent Asset ay Long-term.
"INTEREST")
~EQUITY Securities (dito, pwede madagdagan ang pera mo ng tinatawag na **NONCURRENT = LONG-TERM (generally, "more than 1 year")
"DIVIDEND" and "PRICE APPRECIATION) Kaya siya "Long-term" kasi
Example: -matagal ang buhay niya and/or
Nag-invest ka ng P100. So nawalan ka ng P100. -matagal mo siya pwedeng magamit or mapakinabangan
After ng ilang buwan, binawi mo na yung pera at naging P120. **
Paki compute. Magkano po ang sobra? 1. "LAND"
P120-P100=P20 Ito ang "FAVORITE asset" ko kasi ang ganda ng meaning niya.
Ang tawag po sa sobrang P20 ay INTEREST(pag debt security), or L-A-N-D
DIVIDEND/PRICE APPRECIATION(pag equity security) L-ove (of GOD)
A-lways "Appreciate" And
N-ever Q: Pag wala ka nang maintindihan at di ka na nag eenjoy sa ACCOUNTING
TOPICS, di na ba para sayo ang Accountancy?
D-epreciate  :)

**
You: Yan ba talaga ang meaning ng Land?
A: Let me give you an ANALOGY.
Me: Sa ACCOUNTING, siyempre hindi.  :)
For example, may "Boyfriend or Girlfriend" ka. Madalas kayong mag-away kasi
Pinapaalala lang namin sayo na wag mong kalimutan si God. Alam mo ba na hindi na kayo magkaintindihan.
alam Niya ang lahat ng sakripisyo mo?
Pag ganun ba, hindi na kayo pwedeng magkatuluyan?
Naniniwala kami na lahat ng magaganda at di magagandang nangyayari sa
buhay mo ay nakadisenyo. Disenyo na kailangan mong pagdaanan para -syempre, pwede pa rin po. Kailangan mo lang pag-aralan ang ugali niya, at
"makumpleto" ka. 😊 dapat marunong kang "mag-SACRIFICE", "mag-ADJUST" at "mag-
BALANCE." ❤️
Example:
Ganun din po sa Accounting topics. Dapat po ay may gagawin ka para
Alam mo yung "PUZZLE" di ba?
Nilalaro ko ito nung bata ako. Pinagdidikit-dikit ko yung mga piraso para mabuo maintindihan mo siya. ☺
ang magandang larawan. **
Ganun din si God sayo. Ang mga piraso ay yung magaganda at di YOU: Sir.. di po ako maka-relate. SINGLE pa po eh
magagandang nangyayari sa buhay mo. Na kailangan mong maranasan, para
ME: Edi JOWAin mo muna si ACCOUNTING 😄😄😄
sa dulo ay maging "magandang larawan" ka. Maging SUCCESSFUL ka.  :)

~~~~~~~~~~~~~~~~~~~~
#TEKA-TEKA, mabalik nga tayo sa Accounting   
:)  
:) :) #START
APPRECIATE? DEPRECIATE? Ano yun? Simulan natin sa "OWNER'S EQUITY"
APPRECIATE: - INITIAL INVESTMENT by the owner
~Ito ba yung pag may ginawa kang mabuti sa kaibigan mo, tapos na- - ADDITIONAL INVESTMENT by the owner
APPRECIATE niya? - REVENUE / INCOME of the business
- EXPENSES of the business
Ay hindi po.  :)

- DRAWINGS / WITHDRAWAL by the owner

Appreciate(Appreciation) means "increase in value".
Isa-isahin natin yan mamaya. 😊
Example:
~~~~~~~~~~~~~~~~~~~~
Bumili ka ng Land(Lupain) sa probinsya niyo for P100.
After 10 years, ang value ay naging P500. "BASIC" ACCOUNTING EQUATION
Tumaas yung value. A = L + OE
From P100, naging P500. Tumaas, nag-APPRECIATE. Assets = Liabilities + Owner's Equity
Kaya ang LAND ay isang klase ng PPE nag-aAPPRECIATE. P100 = P60 + P40
** **
Q: ANO naman yung mga PPE na nagde-DEPRECIATE? "Ibahin" natin ang EQUATION
(DEPRECIATE= means lumiliit ang value habang tumatagal) A - L = OE
ANS: Assets - Liabilities = Owner's Equity
2. Building (alam niyo na ito)
3. Machinery and Equipment (Ex. Computer, Aircon, etc) P100 - P60 = P40
4. Furniture & Fixtures (Ex. Table, Chair, Wall decorations, etc) Nasundan ba?
Ano naman ang "ACCUMULATED DEPRECIATION"? **
Example na lang natin yung BUILDING ng school niyo. Kunwari, 10 years ang Ang ibig sabihin nito ay:
buhay niya.
Sa ASSETS na P100,
BUILDING:
Cost: P100 "priority" na mabayaran muna ang LIABILITIES sa Creditors na P60.
Life: 10 years Kaya ang matitira na lang para sa OWNER ay P40.
P100 / 10 years = P10* (Depreciation or pagliit ng value) **
End of: Kung hahatiin or ibi-break down natin yung natira sa owner na P40, ito po ay
Year 1 100-10*=90 (remaining value) ang mga sumusunod (1 to 5):
Year 2 90-10*=80
(PERO this time, let us change our POINT OF VIEW)
Year 3 80-10*=70
Year 4 70-10*=60 (Isipin mo naman ngayon na IKAW ang "OWNER")
Year 5 60-10*=50 (Gagawin lang natin 'to para mas madali mong maunawaan)
Year 6 50-10*=40
Year 7 40-10*=30 Kung ikaw si OWNER, tanungin mo lang ang sarili mo:
Year 8 30-10*=20 "Kung ihihinto ko na ang Business ko, ano kaya ang mababawi ko galing sa
Year 9 20-10*=10 business ko?
Year 10 10-10*=0 (remaining value) 1. "INITIAL INVESTMENT" by the owner.
I hope, nasundan niyo. Nang magtayo ka ng negosyo, yan ang kauna-unahang binigay mong puhunan.
Kung napansin mo, naubos or naging zero ang value sa Year 10. Pwedeng pera, pwedeng gamit, etc. Investments or contributions mo ito "before
Kaya ang tawag na sa BUILDING ay "FULLY DEPRECIATED". Or simply, wala operations"
nang value. 2. "ADDITIONAL INVESTMENT" by the owner.
Question: Dagdag-puhunan. Binigay mo ito "during operations".
Nasaan yung "Accumulated Depreciation". Maaaring sa unang taon ay sobrang dami agad ng customers mo kaya naman
Answer: nagdagdag ka ng puhunan. Yung dagdag-puhunan na yan ay ginawa mo
Ito yung naipon or "na-aacumulate" na pagbaba ng value "during operations" ng business mo.
*Hindi namin ipapaliwang ang susunod(kasi ang gusto namin ay kayo ang mag- *
ANALYZE) 3. "REVENUE" or "INCOME
End of "Kita" ng business mo
YEAR 1 Accumulated Depreciation = 10
(P100-90) 4. "EXPENSES"
YEAR 2 Accumulated Depreciation = 20 "Gastusin" ng business mo
(100-80) or (10+10) Sa 3 & 4, ang dapat na goal ay mas malaking REVENUE kaysa EXPENSE.
YEAR 3 Accumulated Depreciation = 30 Example:
(100-70) or (10+10+10) a) Revenue - Expense = Net INCOME
YEAR 4 Accumulated Depreciation = 40 20 - 15 = 5
(100-60) or (10+10+10+10) b) Revenue - Expense = (Net LOSS)
YEAR 5 Accumulated Depreciation = 50 15 - 20 = -(5)
YEAR 6 Accumulated Depreciation = 60 (between the two, better ang Net INCOME)
YEAR 7 Accumulated Depreciation = 70
Simple MATH lang ang Accounting di ba? 😄
YEAR 8 Accumulated Depreciation = 80
YEAR 9 Accumulated Depreciation = 90 *
YEAR 10 Accumulated Depreciation = 100 5. "DRAWINGS / WITHDRAWAL" of the owner
~~~~~~~~~~~~~~~~~~~~~~ Parang sa ATM card. Pag nagwithdraw ka, may kinuha ka
"INTANGIBLE ASSETS" DRAWINGS or Temporary withdrawal - ito ang tawag pag ang kinuha mo ay
Examples: yung KITA ng business mo (Net INCOME)
1. Patent (inventions) PERMANENT WITHDRAWAL - ito ang tawag pag ang kinuha mo ay ang
2.Copyright (Books, musical composition) INVESTMENT mo (yung 1 & 2)
3.Trademark(Logo, Brand name)
4. Franchise (Jollibee, Mcdo, Starbucks, 7eleven, etc) ~~~~~~~~~~~~~~~~~~~~
5. Others EXAMPLE:
Initial investment P50
ACCOUNTING TUTORIAL (PART 3) Additional investment P30
Revenue 20
"LIABILITIES" AND "OWNER'S EQUITY" Expenses 15
~~~~~~~~~~~~~~~~~~~~ Drawings 45
*
Q: How much ang NET INCOME ~Current Liabilities
A: Revenue - Expenses = Net Income babayaran within 1 year (1 year o less)
20 - 15 = 5 ~Noncurrent Liabilities
Answer is 5 babayaran beyond 1 year (more than 1 year)

* --------------------------

Q: How much ang OWNER'S EQUITY? #CurrentLiabilities

A: Beginning Capital(Initial investment) + Additional investment + Net income - A. Accounts Payable

Drawings = Ending Capital (Owner's equity) ACCOUNTS = Utang
50 + 30 + 5 - 45 = P40 PAYABLE = Babayaran pa (hindi pa bayad)

Answer is P40. ACCOUNTS PAYABLE = "Utang" na "hindi pa bayad"

*YUNG P40, yan na lang ang portion ng asset na pwedeng MABAWI ng owner. Utang ng business sa mga tinatawag na "Trade" creditors.

** **

Supposedly, ang "mababawi" niya dapat ay yung INITIAL AND ADDITIONAL B. Notes Payable (SHORT-term)
INVESTMENT niya (50+30) at yung NET INCOME ng business (5). NOTES = Utang "na may kasulatan" (Promissory Note)
PAYABLE = Babayaran pa (hindi pa bayad)
50 + 30 + 5 = 85.
TANDAAN:
Kaya lang, may "actual" DRAWINGS siyang P45. In paying NOTES PAYABLE, may "dagdag-bayad" na "INTEREST" (Interest
Kaya ang natira na lang is 40 (85-45). Expense)
*GRABE na 'to.. Plus(+) Minus(-) lang pala ang Accounting 😄 **
BASIC!!! Kayang-kaya mo!
C. Accrued "_______" Expense
** ACCRUED: Hindi pa Bayad
If ever mag-decide ang owner na ihinto na ang business ngayon, P40* na lang EXPENSE: Gastusin
ang mababawi niya. ACCRUED EXPENSE = "Hindi pa bayad" na "Gastusin"
*Pero pwede pang mabago ang amount na yan pag, "na-convert into cash" ang EXAMPLE:
mga ASSETS bago ibalik sa owner. -MERALCO Bill
Yan ay dahil sa tinatawag na FAIR VALUE and NET REALIZABLE VALUE ng (Hindi ka pa bayad... sa gastusin(electricity) na nagamit or na-consume ng
assets (in simple words, "Today's value"). business mo)
HALIMBAWA: **
*Let's go back to the POINT OF VIEW of the "BUSINESS" D. Unearned "_____" Income (Advances from Customers)
A = L + OE UNEARNED INCOME
~nakatanggap ng CASH (Pera)
Panindang damit = Liabilities + Owner's equity ~pero hind pa INCOME (Kita')
100 = 60 + 40. STORY(new)
Yung halaga ng panindang damit ay P100. Pumasok si customer sa Salon mo para "MAGBAYAD" ng P100.
Q: Pwede bang ipambayad yung DAMIT(P100).. sa LIABILITIES (P60) at sa (Pero "BUKAS" pa siya magpapagupit)
OWNER (P40)? BUSINESS (Ikaw)
~nakatanggap ng CASH (Pera)
Pwede po.. "Gugupitin na lang.." WOW magic.... 😄
~pero hind pa INCOME kasi "BUKAS" pa magpapagupit.
Siyempre, alam ko hindi yan ang isasagot mo.
TANDAAN:
Ang gagawin mo ay, ibebenta yung damit para maging PERA or CASH. At yung
May pagkakaiba ang UNEARNED INCOME(General term) at ADVANCES
cash na yun ang ibabayad sa LIABILITIES at sa OWNER.
FROM CUSTOMERS(specific for customers)
Cost ng Damit: P100
~~~~~~~~~~~~~~~~~~~~
A. Nabenta for P100 CASH.
#NoncurrentLiabilities
Ibabayad sa Liabilities = P60
Ibabayad sa Owner: P40* E. Notes Payable (LONG-term)
B. Nabenta for P110 CASH Pareho sa (B.), pero BABAYARAN NG "HIGIT" SA ISANG TAON.
Ibabayad sa Liabilities = 60 **
Ibabayad sa Owner = 50*
F. Bonds Payable (LONG-term)
C. Nabenta for P80 CASH Pangmatagalang kontrata ng pagkakautang. Mga lima hanggang sampung taon
Ibabayad sa Liabilities = 60 bago bayaran.
Ibabayad sa Owner = 20* **
*Priority munang mabayaran ang LIABILITIES, bago ang Owner. G. Mortgage Payable
~~~~~~~~~~~~~~~~~~~~ MORTGAGE: Utang na may SANLA
PAYABLE: Babayaran pa (hindi pa bayad)
NOTE THESE FORMULAS:
STORY:
1. Revenue and Income - Expenses = Net Income or (Net Loss)
Bumili ka ng LAND pero di pa bayad (Utang-Mortgage Payable)
2. Beginning Capital + Additional Investment - Permanent Withdrawal + Net *pero yung Land ay nakaSANLA (Collateral)
Income - Drawings = Ending Capital
Anong meaning ng nakaSANLA(Collateral)?
3. Beginning Capital + Additional Investment - Permanent Withdrawal - Net
A: Pag hindi nakabayad sa utang na Mortgage Payable, yung LAND(Collateral)
Loss - Drawings = Ending Capital
ay ibebenta. Yung pera galing sa benta ay gagamitin para mabayaran na yung
4. Beginning Capital + Additional Investment - Permanent Withdrawal + Utang na Mortgage Payable.
Revenue and Income - Expenses - Drawings = Ending Capital
*Kung halimbawang nag-LOAN naman sa bangko, pwede ring gawing
*Capital = Owner's Equity Collateral ang other real properties ng business.
~~~~~~~~~~~~~~~~~~~~~~~~~~~
REVENUE or Income "vs" EXPENSE ACCOUNTING TUTORIAL (Part 4)
A. INCOME = Earnings or Kita' "BASIC ACCOUNTING"
STORY 1: "FORMS" OF BUSINESS ORGANIZATION
Ang Business ay "Salon". May isang empleyado na ang pangalan ay "Alma".
1. SINGLE/SOLE PROPRIETORSHIP is a business owned by only ONE
Nang mag-open ang Salon, may pumasok na isang customer at nagpa-haircut. INDIVIDUAL.
Pagtapos ay nakakolekta ang "Business" ng P100 dahil sa HAIRCUT. 2.PARTNERSHIP is an association of "TWO or MORE" persons who bind
QUESTION: themselves to contribute money, property or industry(services) to a common
Ano ang tawag sa P100? fund, with the intention of dividing the profits among themselves.
ANSWER: 3. CORPORATION is an artifical being(not natural, like human being) created
*INCOME = P100 (INCOME = Earnings or Kita') by operation of LAW, having the rights of SUCCESSION, and the POWERS
AND ATTRIBUTES expressly authorized by law or incident to its existence.
B. EXPENSE = Cost or Gastos
4. COOPERATIVE is a legal entity owned and democratically controlled by its
STORY 2: members. Members often have a close association with the enterprise as
Dahil nagtatrabaho si "Alma" sa Business, kailangan siyang swelduhan. Ang producers or consumers of its products or services, or as its employees.
"binayad" kay Alma ay P70.
~~~~~~~~~~~~~~~~~~~~~~~~~~
QUESTION:
Ano ang tawag sa P70? "TYPES" OF BUSINESS
ANSWER: 4.SERVICE BUSINESS. This business renders services to customers or clients
*EXPENSE = P70 (EXPENSE = Cost or Gastos) for a fee.
(Sale of SERVICES)
#SUMMARY
INCOME: P100 5. MERCHANDISING/TRADING BUSINESS. This business buy goods or
(EXPENSE): P70 commodities and sell them at a profit.
(Sale of GOODS) (Buy=>Sell)
= NET INCOME: P30
6. MANUFACTURING BUSINESS. This business makes "finished goods" from
~~~~~~~~~~~~~~~~~~~~~~~~~~~~ "raw materials" or unassembled parts. It "produces" the goods that it sells.
#NextTOPIC (Sale of GOODS) (Buy=>"Produce"=>Sell)
LIABILITIES ~~~~~~~~~~~~~~~~~~~~~~~~~~
** "ELEMENTS" of FS (Financial Statements)
Classification of LIABILITIES
7. INCOME/REVENUE is the gross INFLOW of economic benefits during the 4. UNEARNED INCOME is revenue collected by the business in advance.
period in the form of INFLOWS or enhancements on assets or decrease in (Received/ collected IN ADVANCE, but not yet earned).
liabilities that result in increase in equity, other than those relating to (Current Liab)
contributions from the owner or owners.
5. CURRENT PORTION OF LONG-TERM DEBT are portions of mortgage,
8. EXPENSE is defined as the gross OUTFLOW of economic benefits during notes, bonds and other long-term indebtedness which are to be paid "WITHIN
the period in the course of ordinary activities when these OUTFLOWS result in ONE YEAR" from the Balance Sheet date (or end of Reporting Period).
DECREASE in equity other than those relating to distribution to owners.
~In simple terms, these are COSTS incurred to produce income/revenue. (Current Liab)
9. ASSETS are defined as RESOURCES controlled by the enterprise as a 6. NOTES PAYABLE (long-term) are amounts due to creditors "beyond" one
result of past transactions and events and from which future economic benefits year, evidenced by WRITTEN PROMISE to pay.
are expected to flow to the enterprise. (Noncurrent Liab)
~In simple terms, these are PROPERTIES owned by the business.
7. BONDS PAYABLE is a liability owed by a company to obtain substantial
10. LIABILITIES are defined as present OBLIGATIONS of an enterprise arising sums of money from lenders to finance the acquisition of equipment and other
from past transactions or events, the settlement of which is expected to result in needed assets.
an outflow from the enterprise of resources embodying economic benefits.
(Noncurrent Liab)
~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. 8. MORTGAGE PAYABLE. Long-term debt of the business for which the
business entity has PLEDGED certain assets as SECURITY to the creditor. In
11. OWNER'S EQUITY/CAPITAL represents the CLAIM of the OWNER on the
the event that the debt payments are not made, the creditor can foreclose or
Assets of the business. It is the RESIDUAL INTEREST in the Assets of the
cause the mortgaged asset TO BE SOLD to enable the entity to settle the claim.
business after deducting all its liabilities.
(Noncurrent Liab)
~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~~~~~~~~~~~~~~~~~~~~~~~
Important: CAPITAL ACOUNT (or EQUITY ACCOUNT) consists of the
following: "OWNER'S EQUITY"
a. "Owner's Capital" 9. CAPITAL. This account is used to record the "ORIGINAL and ADDITIONAL
b. "Owner's Drawing" 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.
EXAMPLES of "ASSET" Accounts #NOTE: This account is also used to record the "PERMANENT withdrawal" of
the owner.
1. CASH is any medium of exchange that a bank will accept at face value. It
(PERMANENT withdrawal means withdrawal of INVESTED capital)
includes coins and currencies, checks, money orders and bank drafts.
10. DRAWINGS/TEMPORARY WITHDRAWALS. Charged to this account are
Current asset.
cash or other assets withdrawn by the owner from the business for personal use
2. TRADING SECURITIES are debt and equity securities that are purchased (represented by the owner's share in profit)
with the intent of selling them in the "near term" or very soon.
11. INCOME SUMMARY. It is a temporary account used at the end of the
Current asset. accounting period to close income and expenses. This account shows the profit
3. ACCOUNTS RECEIVABLES are claims against debtors or customers arising or loss for the period before closing to the capital account.
from services rendered on account and sale of merchandise on account. ~~~~~~~~~~~~~~~~~~~~~~~~~~
Current asset. True or False
4. ALLOWANCE FOR DOUBTFUL ACCOUNT relates to the company's 12. The excess of INCOME over EXPENSES is called "NET INCOME". True
receivables which might not be collected.
13. The excess of EXPENSES over INCOME is called "NET LOSS". True
Current asset. (Contra-Asset)
14. INCOME "increases" Owner's Equity. True
#NOTE: "CONTRA-ASSET" account is the opposite of "ADJUNCT" account
15. EXPENSE "decreases" Owner's Equity. True
In layman's term,
16. ADDITIONAL INVESTMENT "increases" Owner's. True
CONTRA = deducted
ADJUNCT = added (Example: Freight In) 17. OWNER's DRAWING "decreases" Owner's Equity. True
5. NOTES RECEIVABLE are claims supported by promissory note. ~~~~~~~~~~~~~~~~~~~~~~~~~~
Current asset, if short-term. (Also a Current Asset if the problem is SILENT) DEBIT OR CREDIT
Noncurrent asset, if long-term. Guide:
A = L + OE
6. MERCHANDISE INVENTORY are goods on hand and are available for sale.
Look at the equal sign ( = )
Current asset.
If LEFT: Debit
7. ACCRUED INCOME. Earned but not yet received/collected. If RIGHT: Credit
Current asset. (Normal Balance)
8. ADVANCES TO EMPLOYEES. Cash received by employees to be deducted 18. INCREASE in ASSET..... DEBIT
from their salaries in the future. 19. INCREASE in LIAB..... CREDIT
20. INCREASE in OE..... CREDIT*
Current Asset.
Apply "FRIENDS" and "ENEMIES" of OE
9. PREPAID EXPENSES are expenses PAID IN ADVANCE by the business
("Paid but not yet incurred"). Who are the "Friends" of OE?
-Income, Revenue, Gain (CREDIT)*
Current asset.
Who are the "Enemies"
10. OFFICE/STORE SUPPLIES are being used by the business like papers, -Expense, Drawings (DEBIT)
pens, pencils, folders, staplers, etc.
21. INCREASE in INCOME..... CREDIT
Current asset. 22. INCREASE in EXPENSE..... DEBIT
11. LAND is an asset that is not subject to depreciation. It appreciates (value 23. INCREASE in OWNER'S DRAWING..... DEBIT
increases) as time goes by. NOTE:
Noncurrent asset. (INCREASE in ASSET..... DEBIT)
12. BUILDING can be acquired by PURCHASE or by means of (INCREASE in "CONTRA-ASSET.".... "CREDIT")
CONSTRUCTION. Construction costs may include materials, labor, overhead, *
permit or license, Architect fee, Excavation cost, etc.
(Normal Balance) - DEAL & GIRLS 😊
Noncurrent asset.
DEBIT (DEAL)
13. MACHINERY & EQUIPMENT includes computers, air-conditioning units, D-ividends (Drawings)
electric fans, freezers, refrigerators, truck, etc. E-xpenses
Noncurrent asset. A-sset
L-osses
14. FURNITURE AND FIXTURES includes tables, chairs, filing cabinets, etc.
CREDIT (GIRLS)
Noncurrent asset. G-ains
15. ACCUMULATED DEPRECIATION. "Total" depreciated cost of a I-ncome
depreciable asset. R-evenues
Noncurrent asset. (Contra-asset) L-iabilities
S-tockholder's (or Owner's) Equity
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. (Normal Balance) - ADE & LOR 😊
Noncurrent asset. DEBIT (ADE)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~ A - sset
D -rawings
"LIABILITIES" E - xpense
1. ACCOUNTS PAYABLE are amounts due to creditors for ASSETS CREDIT (LOR)
ACQUIRED on account. L - iabilities
(Current Liab) O - wner's equity
2. NOTES PAYABLE(short-term) are amounts due to creditors "within" one R - evenue
year, evidenced by WRITTEN PROMISE to pay. ~~~~~~~~~~~~~~~~~~~~~~~~
(Current Liab) *For DECREASES, just do the "OPPOSITE"
3. ACCRUED EXPENSES are amounts owed to others for UNPAID 24. DECREASE in ASSET..... CREDIT
EXPENSES. 25. DECREASE in LIAB..... DEBIT
(Current Liab) 26. DECREASE in OE..... DEBIT
27. DEREASE in INCOME..... DEBIT
28. DECREASE in EXPENSE..... CREDIT
29. DECREASE in OWNER'S DRAWING..... CREDIT
DECREASE in CONTRA-ASSET..... DEBIT
30. What is the "NORMAL BALANCE" of Cash, Trading Securities, Accounts
Receivables, Notes Receivables, Accrued Income, Supplies, Prepaid Expense,
Land, Building, Machinery & Equipment, Furniture & Fixtures..... DEBIT
31. What is the "NORMAL BALANCE" of Accounts Payable, Notes Payable,
Accrued Expense, Unearned Income, Bonds Payable, Mortgage Payable.....
CREDIT
32. What is the "NORMAL BALANCE" of Owner's Capital, Revenue or
Income..... CREDIT
Example: Cost to acquire mayor’s permit, registration cost of the building,
percentage tax on sales, etc.
Others
"Estimated Expense"
Doubtful Account Expenses – 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.
Depreciation 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.
Others

33. What is the "NORMAL BALANCE" of Owner's Drawing, Expense..... DEBIT ---------------------------------------------------------------

34. What is the "NORMAL BALANCE" of Allowance for Doubtful Accounts, SUMMARY:
Accumulated Depreciation..... CREDIT* Revenue
-Sales
*CREDIT, because they are contra-assets -Service Income
~~~~~~~~~~~~~~~~~~~~~~~~~~~ -Professional Fees
-Interest Income
Definitions, Classifications and Examples of Accounts
-Rent Income
I. -Gain on Sales of other Assets
-REAL accounts (or PERMANENT accounts) -Others
The real accounts are Expenses
-Assets -Cost of Sales
-Liabilities and -Supplies Expense
-Owner’s Equity/Capital -Salaries and Wages Expenses
-Insurance Expense
Real accounts are reported in the Statement of Financial Position(or "BALANCE -Taxes and Licenses Expenses
SHEET"). They are not "closed" at the end of accounting period. -Doubtful Account Expenses
--------------------------------------------------------------- -Depreciation Expense
-NOMINAL accounts (or TEMPORARY accounts) -Others
The nominal accounts are "DEBIT and CREDIT" 😊
-Income/revenues ACCOUNTING TUTORIAL - PART 5
-Expenses and
~~~~~~~~~~~~~~~~~~~~~~~~~~
-Owner’s Drawing
ASSETS:
Nominal Accounts are those that comprise the elements of the Statement of
Cash, Accounts Receivable, Prepaid Rent, Prepaid Insurance, Office Supplies.
Financial Performance (or INCOME STATEMENT) – the revenue and expenses
Office Building, Office Equipment, Furniture and Fixture.
accounts.
LIABILITIES:
These accounts are called temporary because they are "closed", or put into
Accounts Payable, Mortgage Payable
zero balance, at the end of the accounting period.
CAPITAL (Owner's Equity):
*Please note that Owner’s Drawing is NOT an income statement account, but
De Asis Capital, De Asis Drawing
must also be closed, or put into zero balance, at the end of the accounting
period. REVENUES:
Service Income
---------------------------------------------------------------
EXPENSES:
SUMMARY:
Salaries and Wages Expense, Repairs and Maintenance Expense, Taxes and
REAL accounts (or PERMANENT accounts)
Licenses Expense
-Assets
-Liabilities ~~~~~~~~~~~~~~~~~~~~~~~~~~
-Owner’s Equity #JOURNALIZING
NOMINAL accounts (or TEMPORARY accounts) 1. Francis "opened an account " with BPI under the TAC COMPANY name and
-Income/revenues deposited 850000 CASH. He also "invested" his two personal COMPUTERS
-Expenses and which he acquired a year ago for 20000 each but with a fair market value of
-Owner’s Drawing 15000 each.
--------------------------------------------------------------- DEBIT: Cash 850000
DEBIT: Office Equipment 30000 (15000 x 2)
II.
CREDIT: De Asis, Capital 880000 (850000+30000)
The REVENUE Accounts
.........................................
Revenue represents the earnings of the business from sales of goods or service
2. PAID barangay and municipal TAXES, 3500.
rendered.
DEBIT: Taxes and Licenses Expense 3500
Revenue accounts have normal CREDIT balance.
CREDIT: Cash 3500
Below are some common revenue accounts:
.........................................
Sales – an account used to summarize sale of goods of a trade or
3. Bought a small office CONDOMINIUM for 500000, giving 250000 CASH and
merchandising business. This includes cash sales and sales on account.
signing a MORTGAGE payable in 10 years for the balance.
Service Income – the earning derived from service rendered by a servicing
DEBIT: Office Building 500000
business to its customers. This includes cash and on account service. CREDIT: Cash 250000
Professional Fees – the earning derived from services rendered by a CREDIT: Mortgage Payable 250000 (500000-250000)
professional or professional servicing firm which could be in cash or in .........................................
collectibles to its clients.
4. HIRED a secretary with monthly salary of 8500.
Interest Income – the earning representing the time value of money derived
from promissory notes received by the business, whether in cash or collectibles "No Entry"
in the future. .........................................
Rent Income – the income earned from allowing others to use property or 5. Bought office TABLES AND CHAIRS on CREDIT from Mansion, Inc., 40000
facility of the business. DEBIT: Furniture and Fixture 40000
Gain on Sales of other Assets – the income derived from the sales of assets CREDIT: Accounts Payable 40000
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. 6. BILLED a client for SERVICES rendered, 20000.

Others DEBIT: Accounts Receivable 20000

---------------------------------------------------------------
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:
Cost of Sales – the value of merchandise sold
Supplies Expense – the amount of supplies consumed or used by the business
during the period. Examples: used in papers, inks, ballpoint pens, etc.
Salaries and Wages Expenses – the amount paid to service rendered by the
employees in the operation of the business
Insurance Expense – the amount of insurance policy incurred during the
current period. Examples: premiums on building insurance, life insurance, plant
insurance, etc.
Taxes and Licenses Expenses – 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.
CREDIT: Service Income 20000
.........................................
7. Purchases computer INK, COUPON BOND PAPER and BALLPENS to be
used in the office; terms: CASH basis, 4500.
DEBIT: Office Supplies 4500
CREDIT: Cash 4500
.........................................
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
.........................................
10. PAID 400 for the REPAIR of one of the computers
DEBIT: Repairs and Maintenance Expense 400
CREDIT: Cash 400
.........................................
11. RECEIVED 5000 as payment for the SERVICES rendered to one of their
clients.
DEBIT: Cash 5000
CREDIT: Service Income 5000
.........................................
12. COLLECTED one half of the AMOUNT DUE FROM CLIENT on #6 (see #6)
DEBIT: Cash 10000
CREDIT: Accounts Receivable 10000 (20000 x 1/2)
A: General weighted average of 75% and above
(with no grades below 65% in any subject)
**
Q: Anong mangyayari pag ang Gen. Ave. ay above 75%, ngunit may grade na
below 65% sa ibang subject(s)
A:
- CONDITIONAL if 75% and above ang at least 4 subjects (at ang 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).

......................................... *Ang CONDITIONAL examinee ay kailangang mag-exam ulit para kunin ang di
naipasang subject(s) within 2 years mula sa exam kung saan siya na-
13. PAID "ONE YEAR RENT" for a special machine to be used in business conditional.
operations, 30000.
~~~~~~~~~~~~~~~~~~~~
DEBIT: Prepaid Rent 30000
CREDIT: Cash 30000 2. Career Fields in Accounting

......................................... A. Public Accounting

B. Commerce and Industry / Private Accounting
14. PAID "ONE YEAR INSURANCE" of the office condominium, 25000. C. Academe (Education)
DEBIT: Prepaid Insurance 25000 D. Government Accounting
CREDIT: Cash 25000 ~~~~~~~~~~~~~~~~~~~~
......................................... 3. Different Accounting Areas
15. PAID one half of the SALARY of the secretary (see #4) A. Basic Accounting / Bookkeeping
DEBIT: Salaries Expense 4250 (8500 x 1/2) B. Financial Accounting
CREDIT: Cash 4250 C. Managerial Accounting
D. Auditing
E. Cost Accounting
"BALANCING" F. Government Accounting
ACCOUNTING TUTORIAL - Part 6 ~~~~~~~~~~~~~~~~~~~~
(May "EXPLANATION" sa CAPTION ng bawat photo) 👍 4. Different Regulatory Bodies
~~~~~~~~~~~~~~~~~~~~ A. PRC (professional Regulation Commission)
GUIDE: B. PRBOA (Professional Regulatory Board of Accountancy)
For beginners, tingin muna sa GUIDE. C. PICPA (Philippine Institute of Certified Public Accountants)
Kung maaari ay isulat mo ito sa papel, at tingnan habang sinasagot ang bawat D. FRSC (Financial Reporting Standards Council)
items. E. IASB (International Accounting Standards Board)
Malilito ka sa simula, pero ulit-uliting lang hanggang sa masanay ka na. 😊
Ito yung guide (paki sulat mo na): ACCOUNTING TUTORIAL - Part 8
*ASSET "ADJUSTING ENTRIES"
Nagkaroon (+), DEBIT
Nawalan (-), CREDIT Q: What are the six (6) "Adjusting Entries" of a SERVICE business?

*LIABILITIES A:
Nagkaroon (+), CREDIT 1. Accrued expense
Nawalan (-), DEBIT 2. Accrued income (including "Accrued Service Income")
*OWNER'S EQUITY 3. Prepaid expense
Nagkaroon (+) ng OE: 4. Unearned income (including "Unearned Service Income")
=Investment/Capital.... CREDIT 5. Depreciation expense
=Revenue or Income.... CREDIT 6. Doubtful accounts expense / Bad debt expense

Nawalan (-) ng OE: ~~~~~~~~~~~~~~~~~~~~

= Expenses: PAALALA: "Basahin"
"Bawas"(-) sa OE, pero "Dagdag"(+) sa Expense.... DEBIT (Kahit wag munang unawain) 😃😃😃
= Drawings: Halos lahat yata ng nag-BASIC ACCOUNTING, ay sa topic na ito nahirapan.
"Bawas"(-) sa OE, pero "Dagdag"(+) sa Drawings.... DEBIT
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 masyadong mahirapan.
Additional info: Pag sinabing "nagkaroon ng OE", ang meaning nito ay..... **
"NAGKAROON NG OBLIGATION ang BUSINESS" na ibalik sa may-ari ang,
Ngayon ay gagawa muna tayo ng "SUMMARY" ng lahat ng Adjusting Entries.
- mga "Investments" ng Owner
- at "Kinita" ng Business) Sa mga susunod na tutorial (simula bukas) ay saka natin iisa-isahin ang bawat
ADJUSTMENTS (1-6)
Okay lang ba sayo yun???
ACCOUNTING TUTORIAL - PART 7
1. CPA Board Exams "YES" di ba?.. Wala ka namang magagawa eh. 😄😄😄
2. Career Fields in Accounting ~~~~~~~~~~~~~~~~~~~~
3. Different Accounting Areas #GAME
4. Different Regulatory Bodies
Let me discuss the six (6) adjusting entries thru a STORY. 😊
~~~~~~~~~~
**
1. CPA Board Exams
Bumili ka ng "OFFICE BUILDING" worth P500.
Q: SINO ang allowed mag-take ng Philippine CPA Board Exam?
Ang building na ito ay may dalawang rooms.
A:
Room 1: Gagamitin sa "main business" mong tutorial.
- Yung mga graduate sa course na BACHELOR OF SCIENCE IN Room 2: Vacant (bakante siya)
ACCOUNTANCY
**
- Yung may GOOD MORAL CHARACTER
Next mong ginawa ay bumili ka ng isang CELLPHONE na worth P500 din.
- Yung hindi napatunayang guilty ng "MORAL TURPITUDE" (like Adultery or
**
Concubinage - pakikiapid)
Next ay pumunta ka sa 7 eleven para bumili ng PREPAID LOAD CARD worth
- Filipino citizen.
P100.
**
**
Q: Tuwing KAILAN ginaganap ang CPA Board Exam?
Summary:
A: Dalawang beses sa isang taon. May and October. - OFFICE BUILDING P500
** - CELLPHONE P500
- PREPAID LOAD CARD P100
Q: Ilan at Ano ang mga SUBJECTS sa CPA board exam ?
Total: P1,100
A: 6 subjects
Lahat ng ito ay ininvest mo sa itatayo mong "ACCOUNTING TUTORIAL
- RFBT (Regulatory Framework for Business Transactions)
business". 😊
- TAX (Taxation)
(Date: January 1, 2018)
- MAS (Management Advisory Services)
~~~~~~~~~~~~~~~~~~~~
- AUDITING (Auditing theory and Auditing problems) ~~~~~~~~~~~~~~~~~~~~
- FAR (Financial Accounting and Reporting) #START na ng business 😊
- AFAR (Advanced Financial Accounting and Reporting) First: Ni-register mo muna yung PREPAID LOAD CARD sa iyong CELLPHONE.
Q: Paano makapasa sa CPA board exam? Gagamitin mo ito para makahanap ng mga tuturuang STUDENTS (Text, Call
and Surf)
** DEBIT: Rent Receivable 60
TUTORIAL FEE: P120 per year CREDIT: Rent Income 60

- STUDENT A: nag-advance payment siya ng P360 (good for 3 years). Dito ay Sa ibang mga libro, ganito ang ginagawa:
nakatanggap tayo ng P360 cash DEBIT: Accrued Rent Income 60
CREDIT: Rent Income 60
- STUDENT B: hindi muna nagbayad
Note: Ang "Accrued Rent Income" ay isang RECEIVABLE account (Asset po
- STUDENT C: hindi muna nagbayad siya)
** ~~~~~~~~~~~~~~~~~~~~
Maya-maya ay nilapitan ka ng isang kaibigan. Naghahanap daw siya ng Q: Ano naman ang mga pwede mong mga EXPENSES or GASTUSIN
mauupahan. Kaya ang ginawa mo, pinagamit mo muna yung bakanteng ROOM makalipas ang isang (1) taon? (Date: December 31, 2018)
2 bilang room for rent.
A:
Ang usapan, P60 kada taon ang upa. At makokolekta mo lang ang bayad at the
END OF 2ND YEAR (60 + 60) 1. DEPRECIATION EXPENSE - Office building

(Date: January 1, 2018) (pagliit ng halaga or "pagkaluma" dahil nagamit mo na ang "Office Building" ng
isang taon)
~~~~~
EFFECT:
SUMMARY (Jan. 1, 2018) -magkakaroon ka ng EXPENSE
"ACCOUNTING TUTORIAL BUSINESS" -mawawalan(ng value) ang OFFICE BUILDING
*"ASSETS": DEBIT: Depreciation expense
- Office Building P500 CREDIT: Accumulated depreciation
- Cellphone P500 Note: Accumulated depreciation is a CONTRA-ASSET account. Kaya ang effect
- Prepaid Expense (Load) P100 nito ay "bawas" sa Office Building.
- Cash (advance from STUDENT A) P360
**
Note: ang "prepaid expense", gaya ng LOAD, ay "nabayaran na" "pero di pa
nagagamit" 2. DEPRECIATION EXPENSE - Cellphone

Total assets: (500 + 500 + 100 + 360) (pagliit ng halaga or "pagkaluma" dahil nagamit mo na ang "Cellphone" ng
= P1460 isang taon)

*"LIABILITY": DEBIT: Depreciation expense

- Unearned income (advance from STUDENT A) P360 CREDIT: Accumulated depreciation

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 3. LOAD EXPENSE
service) (yung gastusin mo sa text, call and surf)
Kaya ang liability/utang (unearned income) mo kay Student A, ay ang pagtuturo ~Ito ay Adjustment for PREPAID EXPENSE
or "service". Pag nagtext ka, yan ay NAPAGASTOS ka. Kasi nabawasan yung LOAD mo.
*"OWNER'S EQUITY": EFFECT:
- Capital (Investments) P1100 -magkakaroon ka ng EXPENSE
** -mawawalan/mababawasan ka ng PREPAID BALANCE
A = L + OE DEBIT: Load expense
1460 = 360 + 1100 CREDIT: Prepaid expense
BALANCE! Amazing!!!! 😃😃😃 **
~~~~~~~~~~~~~~~~~~~~ 4. UTILITIES EXPENSE (Meralco)
~~~~~~~~~~~~~~~~~~~~ (yung gastusin mo sa "Electricity")
"ITO NA ANG ADJUSTING ENTRIES" ~Ito ay Adjustment for ACCRUED EXPENSE.
Q: Ano naman ang mga pwede mong KITA makalipas ang isang (1) taon? Ipagpalagay na di mo pa bayad ang electricity bill.
(Date: December 31, 2018) Na-consume na ang electricity sa office mo, pero di ba nababayaran.
A: EFFECT:
1. "SERVICE INCOME" -magkakaroon ka ng EXPENSE (consumed electricity)
Student A P120 (bayad na)® -magkakaroon ka ng UTANG
Student B P120 (di pa rin bayad) DEBIT: Utilities expense
Student C P120 (di pa rin bayad) CREDIT: Utilities payable
** Sa ibang mga libro, ganito ang ginagawa:
STUDENT A: - "UNEARNED INCOME" DEBIT: Utilities expense
®Yung P360 worth of service (to be rendered in 3 years) ay tatanggalan na CREDIT: Accrued Utilities expense
natin ng P120. Note: Ang "Accrued Utilities Expense" ay isang PAYABLE account (Liability po
Ito ay dahil may "rendered services" na ngayong taon (1 year). siya)
Kaya sa Dec 31, 2018, P240 na lang ang hindi pa natin nabibigay kay Student **
A na serbisyo. 5. DOUBTFUL ACCOUNTS EXPENSE
(P240 na lang ang "unearned income") (para sa student na hindi pa bayad, at maaaring "hindi na talaga magbabayad")
Nakakasunod pa ba? Candidate dito sina STUDENT B & C.
At the same time, kumita ka na rin ang tutorial business ng para sa unang taon, Ipagpalagay natin na si Student C ay lubos na naghihirap financially. Malaking
P120. posibilidad na hindi siya makakabayad sa parating na due date.
EFFECT: EFFECT:
mababawasan ang UTANG na service -magkakaroon ka ng EXPENSE
madadagdagan ang INCOME -mawawalan/mababawasan ang PAUTANG
DEBIT: Unearned Service Income 120 DEBIT: Doubtful account expense
CREDIT: Service Income 120 CREDIT: Allowance for doubtful accounts
** Note: Allowance for doubtful accounts is a CONTRA-ASSET account. Kaya ang
STUDENT B & C (ACCRUED SERVICE INCOME) effect nito ay "bawas" sa Accounts receivable.
Ito ay ACCRUED INCOME(in general). Hindi mo pa nakokolekta ang cash, pero
INCOME na siya dahil nagturo ka na ng isang taon. ACCOUNTING TUTORIAL - PART 9
Pero mas tama na tawagin itong ACCRUED SERVICE INCOME dahil galing ito "ADJUSTING ENTRIES" - continuation
sa "main business" mo (tutorial)
~~~~~~~~~~~~~~~~~~~~
EFFECT:
-magkakaroon ka ng PAUTANG (Accounts Receivable) ACCRUALS
-magkakaroon ka ng INCOME (Service Income) 1. Accrued Expense
DEBIT: Accounts Receivable 240 ADJUSTING ENTRY: 😊
CREDIT: Service Income 240
Debit: _____ expense
(B + C) (120 + 120) Credit: _____ payable
~~~~~ (Amount: used)
2. "RENT INCOME" P60 (di pa rin bayad) *
Ito ay isang halimbawa ng ACCRUED INCOME na hindi nanggaling sa "main 2. Accrued Income
business" mong tutorial.
ADJUSTING ENTRY: 😊
May rent income ka nang P60 ngayong YEAR 2018.
Debit: _____ receivable
Ito ay galing sa ROOM FOR RENT kung saan nakatira na ang kaibigan mo ng Credit: _____ income
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 pa ang bayaran (Dec 31, 2019) (Amount: earned)

Year 2018 = P60 Rent Income (ACCRUED INCOME kasi di pa nakokolekta as ~~~~~~~~~~~~~~~~~~~~
of Dec. 31, 2018) DEFERRALS
EFFECT: 3. Prepaid Expense
-magkakaroon ka ng PAUTANG A. ASSET Method
-magkakaroon ka ng INCOME
Original Entry:
Debit: Prepaid _____
Credit: Cash
(Amount: total)
ADJUSTING ENTRY: 😊
Debit: _____ expense
Credit: Prepaid _____
(Amount: used portion)
**
B. EXPENSE Method
Original Entry:
Debit: _____ expense
Credit: Cash
(Amount: total)
ADJUSTING ENTRY: 😊
Debit: Prepaid _____
Credit: _____ expense
(Amount: unused portion)
~~~~~~~~~~
4. Unearned Income (or Deferred Income)
a. LIABILITY Method
Original Entry:
Debit: Cash
Credit: Unearned _____
(Amount: total)
ADJUSTING ENTRY: 😊
Debit: Unearned _____
Credit: _____ income
(Amount: earned portion)
**
b. INCOME Method
Original Entry:
Debit: Cash
Credit: _____ income
(Amount: total)
ADJUSTING ENTRY: 😊
Debit: _____ income
Credit: Unearned _____
(Amount: unearned portion)
~~~~~~~~~~~~~~~~~~~~
5. Depreciation
ADJUSTING ENTRY: 😊
Debit: Depreciation expense - _____
Credit: Accumulated depreciation - _____
FORMULA: (straight line method)
Cost - Salvage Value / Useful life = Depreciation Expense per year
**
6. Doubtful Accounts (or Bad debts)
ADJUSTING ENTRY: 😊
Debit: Doubtful accounts expense
Credit: Allowance for doubtful accounts
FORMULA:
(Accounts Receivable x % uncollectible ) = Allowance for doubtful accounts or
ADA
ADA +(-) "some adjustment" = Doubtful accounts expense
("some adjustment" means: write-off, beginning balance of ADA, etc)

ACCOUNTING TUTORIAL - Part 10 (Final Part)

PART 10
Adjusting Entries
"Sample" WORKSHEET
Financial Statements
Closing Entries
Post-closing Trial Balance
Reversing Entries