DENNISE A.

ALCANTARA

BS ACCOUNTANCY MODULE

1. Accounting is the language of business. Its processes use numbers to tell a story about how your
company is earning and spending money. An accounting information system provides the syntax
that allows you to meaningfully collect, organize and interpret the information your accounting
numbers provide.

2. The essential elements of an Accounting information system are:

1. Procedures or a set of interrelated activities involving the originating, processing and
reporting of financial and other data.
2. Statement of accounting policies and standards.
3. Records and reports necessary to gather, process, store and transmit financial and other
information.
4. Bookkeeping system or pro-forma accounting entries including computational requirements.
5. Personnel directly involved in accounting work. 6. Equipment and devices used in the system
to expedite the work, provide the controls and minimize if not totally prevent fraud and errors.

3. 1. The company’s needs for accounting information(determining information needs)

2. The resources available for operation of the system (availability of resources and the cost of
producing accounting information).

4.The basic function of every accounting system are:

1. Interpretation and recording of the effects of business transactions.

2. Classification of the effects of similar transactions

3. Summarization and communications of information contained in the system to decision makers.

5. Documents are very essential because all business transactions are evidenced by or supported by
printed forms and documents. Source documents identify and describe these transactions and events
entering the accounting process. They are the ultimate proof of business transactions.
PROBLEM:

June 11 – Increase in Cash of 50,000, Asset. Increase in OE 50,000

June 12 - Decrease in Asset by 70,000 of Cash, Increase in Asset of 70,000 by Land

June 15 - Increase in Asset by 20,000 of Supplies, Increase in Liabilities by 20,000 Accounts Payable

June 16 - Decrease in Asset by 10,000 of Cash, Decrease in Liabilities by 10,00, Accounts Payable

June 17 - Increase in Asset by 20,000 of Cash. Decrease in Asset by 20,000 of Accounts Receivable

SELF ASSESSMENT

1. Yes

2. An accounting information system is a way of tracking all accounting and business activity for a
company. Accounting information systems generally consist of six primary components: people,
procedures and instructions, data, software, information technology infrastructure, and internal
controls.

3. Yes
LESSON 2

1. The Journal is a book where all the transactions are recorded immediately when they take place
which is then classified and transferred into concerned account known as Ledger. A journal is commonly
called the book of original entry because it is here that the first formal accounting record of a
transaction is made.

2. Posting is the process of copying the debits and credits from the journal to the ledger account. Posting
is where you have to update the ledger accounts for the effects of the transactions recorded in the
journal.

3. The general ledger contains the detailed transactions comprising all accounts, while the trial balance
only contains the ending balance in each of those accounts. The trial balance has a much more limited
use, where the totals of all debits and credits are compared to verify that the books are in balance

4. Adjusting entries bring all permanent and nominal accounts up to date. With accrual accounting,
revenues are recognized when earned and expenses matched against those revenues.

5. Unadjusted trial balance is the first list of ledger account balances, compiled without making any
period end adjustments. Adjusted trial balance is the trial balance compiled after considering
adjustment entries at the close of the accounting period

6. The statement of changes in owner’s equity accounts and the statement of cash flows are the two
basic financial statements that are prepared at the end of the accounting period. The cash flow
statement shows the cash that is coming into and leaving a company, while the statement of
shareholders' equity shows detailed changes in the shareholders' equity listed on a company's balance
sheet.

7. The purpose of the closing entry is to reset the temporary account balances to zero on the general
ledger, the record-keeping system for a company's financial data. Temporary accounts are used to
record accounting activity during a specific period.

8. Temporary accounts are company accounts whose balances are not carried over from one accounting
period to another, but are closed, or transferred, to a permanent account. Permanent accounts are
found on the balance sheet and are categorized as asset, liability, and owner's equity accounts.

9. The adjusted trial balance includes income from the current period. Closing entries reduce the income
account to zero and transfer the balance to the income summary account.When the post-closing trial
balance is prepared, the income accounts are not listed because they all equal zero.

10. Reversing entries are optional accounting procedures which may sometimes prove useful in
simplifying record keeping. A reversing entry is a journal entry to “undo” an adjusting entry.
 Usapang Teki
Journal
For the month of April

DAT
DEBIT
E PARTICULARS CREDIT

April Cash P 200,000.00

1

Nerdy, Capital P200,000.00

To record investment of Nerdy to the

business

2 Cash 300,000

Accounts Payable 300,000

To record borrowed cash from Pera Bank

5 Prepaid Rent 90,000

Cash 90,000

To record payment of one-year rent of

office space

7 Computer Equipment 250,000

Cash 100,000

Accounts Payable 150,000

To record purchase of Computer

equipment 60% on account

9 Computer Printers 11,700

Cash 11,700

To record purchase of computer and

printer.
11 Supplies 500

Cash 500

To record purchase of supplies.

13 Cash 38,100

Computer Rental Revenue 38100

To record computer rental revenue

15 Salary Expense 10,150

Cash 10,150

To record payment for salaries of

technicians

17 Accounts Receivable 2,100

Service Revenue 2,100

To record computer rental revenue to be

collected

19 Cash 52,950

Computer Rental Revenue 52,950

To record computer rental revenue

21 Nerdy, Drawings 5,000

Cash 5,000

To record withdrawal
23 Accounts Receivable 5,750

Service Revenue 5,750

To record service revenue to be collected

25 Cash 45,315

Computer Rentals Revenue 45,315

To record computer rental revenue

27 Cash 2,100

Accounts receivable 2,100

To record collection of payment

29 Salary Expense 10,150

Cash 10,150

To record payment for salaries of

technicians

30 Accounts payable 12,500

Cash 12,500

To record payment of 1st installment to

Kas Lang Shop

TOTAL P1,036,315 P 1,036,315

 ASSETS LIABILITIES OWNER’S EQUITY

Accounts Payable Nerdy Capital

Debit Credit Cash 2- P300,000 cr April 1-P200,000
April 1-P200,000 5 – P 90,000
7 – 150,000 cr P 200,000
Accounts Receivable
2-300,000 7- 100,000
30- P12,500
13 – 38,100 9- 11,700
LIABILITIES = P437,500 OWNER’S EQUITY = P318, 915
19 – 52,950 11-500 Computer Rental Revenue
25 – 45 315 15-10,150 13 – P38,100 Cr

27 – 2,100 21 – P5,000 19- 52,950 Cr

P 638,465 29-10,150 25 – 45,315 Cr

P 398,465 30-12,500
P 136,365

Salaries Expense
240,000 tl = 756,415
ASSETS 15- P 10,150 dr

29 – 10,150
Prepaid Rent
P 20,300
5 – P90,000 dr

P90,000

Service Revenue
17- P 2,100 cr
Computer Equipment
23 – 5,750 cr
7- P250,000 dr
P7,850
P250,000

Computer and Printers

9 – P11, 700 Dr
Nerdy, Drawings 21 – P5,000 dr
P 11,700
P 5000

Supplies
11-P 500 Dr
 P500

17- P2100 dr 27 - 2100

23 – 5,750 dr

P5750
 Usapang Taki
Trial Balance
For the month of April

Particulars Debit Credit

Cash P 398, 465

Prepaid Rent 90,000

Computer Equipment 250,000

Computer and Printers 11,700

Supplies 500

Accounts Receivable 5750

Accounts Payable P437,500

Nerdy, Capital 200,000

Nerdy, Drawings 5,000

Computer Rental Revenue 136,365

Service Revenues 7,850

Salaries Expense 20,300

P 781,715 = P 781, 715

 Usapang Taki
Income Statement
For the month of April

Computer Rental Revenue 136,365

Service Revenues 7,850

Total Revenues 144,215

Less: Salaries Expense (20,300)

Net Income P 123,915

 Usapang Taki
Balance Sheet
For the month of April

ASSETS LIABILITIES

Cash P 398,465 Accounts Payable P 437,500

Prepaid Rent 90,000

Computer Equipment 250,000 OWNER’S EQUITY

Computer and Printers 11,700 ` Nerdy, Capital P200,000

Supplies 500 Net Income 123,915

Accounts Receivable 5750

Total Assets P756,415 Total Liabilities

and Owners Equity P 756,415
 Usapang Taki
Statement of Change in Equity
For the month of April
Beginning Balance; Nerdy Capital April 1
P200,000
Net income 123,915
Ending balance P 323,915

SELF ASSESSMENT
1. Yes I am able to describe the complete accounting
processing cycle
2. Step 1 – Identify and analyze transactions or events to
be recorded
Step 2 – Journalize transactions and events
Step 3 – Posting from journals to ledger
Step 4 – Prepare unadjusted trial balance
Step 5 – journalize and post adjusting journal entries
Step 6 – prepare adjusted trial balance
 Step 7 – prepare financial statements
Step 8 – journalize and post closing entries
Step 9 – prepare post-closing trial balance
Step 10 – journalize and post reversing journal entries
3. Yes I am able to explain the objectives of each step in
the APC.

Assessment
1.A company's operating cycle, or cash conversion cycle, shows the length of time
it takes a company to buy inventory, convert it into sales and collect the
"accounts receivable" revenue from the sales. Accounts receivable is the
accounting term for money that customers owe a company for purchases made
on credit. While the operating cycle of the purchase and sale of inventory on
account is computed by identifying the number of days a company takes in
converting its inventories to cash. It equals the time taken in selling inventories
plus the time taken in recovering cash from trade receivables.
2. Perpetual inventory system continuously tracks changes in the inventory
account. It is usually used on low-volume transactions of high-value items while
periodic inventory system is used on high-volume transactions involving low-value
items.
3.
 Home Products
Income Statement
For the month of April

Sales

Sales Revenue P 2,010,000

Less: Sales Discounts P 90,000

Sales Returns 46,000 136,000

Net Sales 1,874,000

Less: Cost of Goods Sold

Beginning Inventory, March 31 194,500

Add: Net Cost of Purchase

Purchases P 913,000

Add Freight-In 220,000

Cost of Purchases 1,133,000

Less Purchase Discounts P 30,000

Purchase Returns 20,000 50,000 1,083,000

Total Goods Available for Sale 1,277,500

Less Ending Inventory, April 30 218,700 1,058,800

Gross Profit from Sales 815,200

Less Selling Expense 378,400

Operating Income 436,800

Other Revenue and Expense

Interest Revenue 15,000

General Expenses (238,000)

Net Income P 213,800

Self Assessment

1 Yes I’m able to understand the nature of a merchandising business.

2 Yes, I can I describe and explain the operating cycle of a merchandising business.
3 Yes, I can prepare an income statement of a merchandising business.
 ASSESSMENT
Part 1.
1. 1 Sales on credit – Sales Journal Used to record all sales of merchandise on
credit.
2Purchases on credit – Purchases Journal Used to record all purchases of
merchandise on credit.
3. Cash receipts – Cash Receipts Journal used to record any transactions
involving the receipt of money.
4. Cash payments – Cash Payments Journal (or Cash Disbursements Journal)
used to record all payments of cash.
2. It allows better division of labor for the company. As several journals are being
employed, different people can record and journalize entries at the same time.
Also it saves time in posting to the ledger. Posting process can be done at the end
of each month.
3. A controlling account summarizes all accounts in a subsidiary ledger. The
balance of a controlling account equals the total of all account balances in its
related subsidiary ledger.
 PROBLEM

1.Cash receipts Journal

Date Account Cash Accounts Receivable Sales Sales Discount Other Accounts
Debit Credit Credit Debit Debit Credit
1-Aug P Company P5,880 5,880 120
8-Jan Cash Sales 1,015 1015
10 Alex, Capital 5000 5000
20 Q 196 196 4
31 R 125 125
Total 6336 6,201 1015 124 5000

2.Cash Payment Journal

Date Check No. Account Cash Accounts Payable Purchase Discount Other Accounts
Credit Debit Credit Debit Credit
1-Aug 1841 M 4900 5,000 100
3 1842 N 4,000 4000
8 1843 O offi ce supplies 560 560
24 1844 Alex withdrawal 196 196
29 1845 Utility Bills 1050 0 1050
Total 10706 5,196 100 1610 0

SELF ASSESSMENT

1. Yes I was able to understand the relationships between control accounts and subsidiary

Ledgers.
2. Yes I can describe the use of the accounts receivable and accounts payable subsidiary

Ledgers.

3. Yes I can apply the accounting process of recording, summarizing and analyzing

transactions using special journals.

Assessment

1. It is important to adopt International Accounting Standards because it will

contribute to economic efficiency by helping investors to identify opportunities
and risks across the world, thus improving capital allocation. For businesses, the
use of a single, trusted accounting language lowers the cost of capital and reduces
international reporting costs.

2. The FRSC’s main role is to establish generally accepted accounting principles in

the Philippines. The FRSC similarly monitors issuances of the International
Financial Reporting Interpretations Committee (IFRIC) of the IASB, which it adopts
as Philippine Interpretations–IFRIC. PFRSs and Philippine Interpretations–IFRIC
approved for adoption are submitted to the BOA and PRC for approval.

3. The law governing the practice of accountancy in the Philippines is Accountancy

Act of 2004 or also known as Republic Act 9298, an act regulating the practice of
accountancy in the Philippines, repealing Presidential Decree no. 692.

4. The Philippine Institute of Certified Accountants or PICPA is the accredited

professional organization (APO) of CPAs by the Professional Regulation
Commission (PRC) and has been awarded twice as PRC most outstanding APO
from among other professional organizations.

5. The major sectors are:

Practice of Public Accountancy

Practice in Commerce and Industry
Practice in the Government
Practice in Education/Academe

6. Accountants in public practice are working in accounting firms or individually to

provide audit and attestation, tax planning and preparation, and advisory services
to their clients. After gaining enough experience, they may also start a public
accounting firm of their own.

7.The role an accountant play when he/she is involve in academe is teaching of

accounting, auditing, management advisory services, finance, business law,
taxation, and other technically related subjects. While when appointed to, a
position in an accounting professional group in government or in a government–
owned and/or controlled corporation, including those performing proprietary
functions, where decision making requires professional knowledge in the science
of accounting, or where a civil service eligibility as a certified public accountant is
a prerequisite

Self assessment
1. Yes, I was able to understand the role that the Financial Reporting Standards
Council playsin the development of accounting principles in the Philippines?
2. Yes I am able to identify the different sectoral organizations for CPAs?
3. Yes I can describe the functions of an accountant according to sectoral
representations?