ACFAR 1130 – FINANCIAL ACCOUNTING AND REPORTING

LEARNING SESSIONS 2 – INTRODUCTION TO ACCOUNTING

Sample Exercises

Cheating is not an act of courage. It is an act of ignorance.

Good luck and God bless!

For Test I and Test II, consider the following information:

BYAKUYA FINANCIAL SERVICES

Chart of Accounts

ASSETS INCOME
110 – Cash on Hand 410 – Service Revenue
120 – Accounts Receivable 420 – Gain on Sale of Service Vehicle
130 – Office Supplies
140 – Prepaid Advertising EXPENSES
150 – Service Vehicle 510 – Salaries Expense
160 – Land 520 – Utilities Expense
170 – Building 530 – Gas and Oil Expense
540 – Insurance Expense
LIABILITIES 550 – Repairs and Maintenance Expense
210 – Accounts Payable 560 – Interest Expense
220 – Notes Payable 570 – Loss on Sale of Service Vehicle

EQUITY
310 – Byakuya, Capital
315 – Byakuya, Drawings

January 2020 Transactions

DATE ACCOUNTABLE EVENTS

Invested P500,000 cash, land worth P1,000,000 and an old building worth P500,000
1/1
to the business
1/3 Paid for insurance worth P15,000 and repaired the old building for P35,000
Purchased office supplies amounting to P12,500, paying P7,500 down payment and
1/5
the balance is due 15 days later
Bought an old service vehicle worth P300,000, issuing a promissory note worth
1/5
P250,000 and paying the rest with cash
1/9 Rendered services amounting to P450,000 on account to Rukia
1/10 Paid for an advertising contract worth P50,000 and salaries worth P42,500
1/12 Sold the old service vehicle for P250,000
1/15 Paid for the outstanding balance for the office supplies
1/19 Collected half of the amount due from Rukia
Paid for salaries worth P42,500 and received a bill for gas and oil expense worth
1/20
P25,000
1/21 Bought a new service vehicle worth P327,500
1/25 Rendered services worth P150,000 to Ichigo
1/28 Received a bill for light and water worth P45,000
1/29 Withdrew P250,000 from the business
ACFAR 1130 – FINANCIAL ACCOUNTING AND REPORTING
Learning Sessions 2 – Sample Exercises
Prepared by Rikk Nicholson M. Nalzaro, CPA, CTT, MRITax
 1/30 Paid for the 10% fixed monthly interest on the note issued for the old service vehicle
1/31 Sold the new service vehicle for P375,000
1/31 Permanently withdrew P150,000 from the business

TEST I – ANALYSIS OF TRANSACTIONS | Analyze the following transactions and determine the
net effect of such transaction to the assets (A), liabilities (L), equity (C), income (I), and expense (E)
accounts. Write a plus sign ( + ) for increase, minus sign ( – ) for decrease, or a number sign ( # )
for no effect. An example has been given below. No erasures, superimpositions, and other forms of
alterations.

No. TRANSACTION A L C I E
Invested P500,000 cash, land worth
Ex. P1,000,000 and an old building worth + # + # #
P500,000 to the business
Paid for insurance worth P15,000 and repaired
1
the old building for P35,000
Purchased office supplies amounting to
2 P12,500, paying P7,500 down payment and
the balance is due 15 days later
Bought an old service vehicle worth P300,000,
3 issuing a promissory note worth P250,000 and
paying the rest with cash
Rendered services amounting to P450,000 on
4
account to Yoruichi
Paid for an advertising contract worth P50,000
5
and salaries worth P42,500
6 Sold the old service vehicle for P250,000
Paid for the outstanding balance for the office
7
supplies
8 Collected half of the amount due from Yoruichi
Paid for salaries worth P42,500 and received a
9
bill for gas and oil expense worth P25,000
10 Bought a new service vehicle worth P327,500
Rendered services worth P150,000 to
11
Unohana
Received a bill for light and water worth
12
P45,000
13 Withdrew P250,000 from the business
Paid for the 10% fixed monthly interest on the
14
note issued for the old service vehicle
15 Sold the new service vehicle for P375,000
Permanently withdrew P150,000 from the
16
business

TEST II – CREATION OF ACCOUNTING REPORT | Create a financial transaction worksheet that

presents the net effects of the accountable events to specific account titles used by the business
above. Make sure to present the account titles under the element of financial statement they belong
to and make sure that all account titles are in their normal balances.

ACFAR 1130 – FINANCIAL ACCOUNTING AND REPORTING

Learning Sessions 2 – Sample Exercises
Prepared by Rikk Nicholson M. Nalzaro, CPA, CTT, MRITax
TEST III – CALCULATION | Calculate the total net effect of the accountable transactions above to
the following items:

1. Cash on Hand 11. Insurance Expense

2. Accounts Receivable 12. Repairs and Maintenance Expense
3. Office Supplies 13. Interest Expense
4. Prepaid Advertising 14. Loss on Sale of Service Vehicle
5. Service Vehicle 15. Byakuya, Drawings
6. Land 16. Accounts Payable
7. Building 17. Notes Payable
8. Salaries Expense 18. Byakuya, Capital
9. Utilities Expense 19. Service Revenue
10. Gas and Oil Expense 20. Gain on Sale of Service Vehicle

END OF THE SAMPLE EXERCISES

The fruit of hard labor is sweeter than the fruit of luck.

ACFAR 1130 – FINANCIAL ACCOUNTING AND REPORTING

Learning Sessions 2 – Sample Exercises
Prepared by Rikk Nicholson M. Nalzaro, CPA, CTT, MRITax