JOB SHEET No. 1.

3-1
Title: Prepare Journal Entry
Given one Learning Outcome on Preparing
Performance Objective: Journal Entry, you should be able to
journalize transactions.
 Calculator
 Paper
Supplies and Materials:  General Journal
 Pencil
 Eraser
1. Based on first month’s operation of
Mr. G. Alajar (refer to transactions below)
determine the titles of the accounts
involved.
 
2. Apply the rule of debit and credit.
Steps and Procedure:
3. Supply an explanation of each
transaction whenever necessary.
 
4. Make the necessary journal entry for
each transaction.
 Written test
Assessment Method:  Practical/performance test
 Interview
JOURNALIZE TRANSACTIONS

G. Alajar recently established his own business, which he called "Sure

Repair Shop". During the first month of the business in Sept 2017,
the following transactions were completed.

2017
Sept. 1 G. Alajar opened a television repair shop he called "Sure
Repair Shop". He began business by investing P2,500.00 in
cash and the following assets: repair tools P1200; repair
supplies P1500 and a truck P20,000.00.
2 Paid P250.00 for newspaper advertising announcing the
opening of his shop.
3 Purchased office tables and chairs and filing cabinets from
Cruz Furniture on credit, 6500.
5 Completed repair work for R. Gil on credit, P1200.00.
9 Completed repair work for M. Soriano, P2,200.00. Accepted
P1000.00 in cash and promised to pay the balance after
five days.
15 Paid the wages of the shop helper, P450.00
18 Paid one-half of the account due to Cruz Furniture and
issued a promissory note for the other half.
20 R. Gil paid his account.
25 Withdrew cash for P750.00 for personal use.
28 Received P2500.00 from S. Serna for repair service
rendered.
30 Paid the monthly utility bill, P150.00
30 Paid the month's rent of the shop, P1000.00
30 Wages of the shop helper, P450.00

Required: Journalize the above transactions.

 
 PERFORMANCE CRITERIA CHECKLIST NO.1.3-1

Did you…. YES NO

-prepare journals in accordance with industry practice
and generally accepted accounting
principles/Philippine Financial Reporting Standards
for transactions and events.
-determine debit account titles in accordance with
chart o accounts.
-determine credit account titles in accordance with
chart of accounts
-prepare explanation to journal entry in accordance
with the nature of transaction.

-prepare journal entries with 100% accuracy

Comments/Suggestions:

Facilitator:___ ___________________________ Date:____________________

https://www.accountingformanagement.org/general-
journal/

A Journal entry is the first step of the accounting or book-keeping process. In this
step, all the accounting transactions are recorded in general journal in a
chronological order. The general journal is maintained essentially on the concept of
double entry system of accounting, where each transaction affects at least two
accounts.

Other names used for general journal are “journal book” and “book of original entry”.
The process of making a journal entry

The first step in the process of preparing a journal entry is to analyze the accounts
involved in a business transaction and then apply the rules of debit and credit based
on the type of each account. After identifying the accounts involved in the transaction
and deciding upon the applicable rules, the journal entry is recorded in the general
journal in a specified format which includes the following details:

1. Date of transaction
2. Ledger accounts involved
3. Amount of transaction
4. A brief narration to describe the transaction
Format of general journal

Let’s understand the format of general journal and the process of making a journal
entry through an illustration.

Transaction:

January 05: Purchase of machinery by making cash payment of $15,000.

Analysis of transaction:

Recording journal entry:

According to rules of debit and credit, when an asset increases, its account is debited
and when an asset decreases, its account is credited. In this transaction, machinery (an
asset) is increasing, and cash (an asset) is decreasing.  So the journal entry would be
made as follows:

All business transactions are recorded in the general journal in a manner illustrated
above. After making journal entries in the journal, they are periodically posted to the
ledger accounts.

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Example:

The Moon Service Inc. engaged in the following transactions during the month of
November 2015:

 Nov. 01: Issued 20,000 shares of common stock at $20 per share
 Nov. 03: Paid office rent for the moth of November $500.
  Nov. 06: Purchased office supplies $250.
 Nov. 12: Purchased office equipment on account $4,500
 Nov. 16: Purchased business car for $25,000. Paid $10,000 cash and issued a note
for the balance.
 Nov. 21: Billed clients $24,000 on account.
 Nov. 25: Declared dividends $3,000. The amount of dividends will be distributed in
December.
 Nov. 28: Paid utility bills for the month of November $180.
 Nov. 29: Received $20,000 cash from clients billed on November 21.
 Nov. 30: Paid salary for the month of November $7,500

Required: Record the above transactions in a general journal.

quired: Record the above transactions in a general journal.

Solution:
 ADVERTISEMENT

The use of software packages for journalizing:

These days most of the companies use some form of software package that automates
many tasks involved in journalizing their business transactions. A basic understanding
of manual procedure to record transactions in a general journal is, however, necessary
to know how software packages perform their function.

Click on the next link below to see how ledger accounts of Moon Service Inc. will be
prepared.