INTRODUCTION

 Accounting has evolved, as in the case of medicine and law, in response to the social
and economic needs of society. As business and society become more complex,
accounting develops new concepts and techniques to meet the ever-increasing needs
for financial information.
 In market economy, information helps decision-makers make informed choices
regarding the allocation of scarce resources under their control.
 Accounting is relevant in all walks of life, and it is absolutely essential in the world of
business. Accounting is the system that measures business activities, processes that
information into reports and communicates the results to decision-makers. For the
reason accounting called the language of the business.
 No business could operate very long without knowing how much it was earning and how
much it was spending. Accounting provides the business with these information and
more.
DEFINITION OF ACCOUNTING
 Accounting is the art of recording, classifying and summarizing in the significant manner
and in terms of money, transactions and events which are, in part at least of financial
character, and interpreting the results thereof.
 Accounting is the process of identifying, measuring and communicating economic
information to permit informed judgments and decision by users of the information
 Accounting is a service activity. Its function is to provide quantitative information,
primarily financial in nature, about economic entities that is intended to be useful in
making economic decisions.
 Accounting is an information system that measures, processes and communicates
financial information about an economic entity.

Nelson Daganta formed the Liceo Signages on Oct 1, 2020. He deposited P250, 000 in
GE Money Bank under the name of the new business entity. During the month of
October 2020.
Oct 2 - Acquired a service vehicle in the amount of 195,000 on account
3 – Acquired supplies for cash, 57,000
9 –Received 87,000 cash for signs painted.
10 – Paid the month’s rent 25,000
11 – Painted sings for Cagayan mobile on account 170,000
12 – Paid 55,000 on account from Oct 2
16 – Withdrew 25,000 for personal use
23 – Collected 35,000 from Cagayan Mobile
27 – Paid salaries of 57,000 for the month
30 – Paid Bayan Tel 7,500 for communication service for the month
31 – Paid a bill from AdAsia for 5,500 of advertising for the month.

For the month of October, 2020

Accounts Service Accounts Daganta
Dates Cash Supplies
Receivable Vehicle Payable Capital
1-Oct 250,000         250,000
2            
3 -57,000          
9 87,000         87,500
10 -25,000         -25,000
11   170,000       170,000
12 -55,000       -55,000  
16 -25,000         -25,000
23 35,000 -35,000        
27 -57,000         -57,000
30 -7,500         -7,500
31 -5,500         -5,500
total 140,500 135,000 57,000 195,000 140,000 387,500
      527,500 527,500    

Emerita Modesto established her own business called Modesto’s Self-Storage. The
account headings are presented below:

a. Deposited 120,000 in a bank account in the name of the business.

b. Bought office equipment on account from PHINMA Corporation 31,000
 c. Paid rent for the month 24,000
d. Bought supplies for cash 4,500
e. Paid salaries 9,800
f. Received cash for storage services 36,000
g. Received and paid the utility bill 2,520
h. Paid Errol Umerez Graphics for advertising 4,280 (bill was not previously recorded)
i. Paid for one-year liability insurance policy 8,350
j. Billed customers for storage services on account 33,700
k. Received cash for storage services 23,000
l. Paid salaries 9,900
m. Paid PHINMA Corporation 11,000 as part payment on the office.
n. Modesto withdrew 12,000 for personal use
Modesto Self Storage
Accounts Prepaid Office Accounts Modesto
Dates Cash Income Expenses
Receivable Insurance Equipment Payable Capital
a 120,000         120,000    
b       31,000 31,000      
c -24,000             -24,000
d -4,500             -4,500
e -9,800             -9,800
f 36,000           36,000  
g -2520             -2,520
h -2480             -4,280
i -8350   8,350          
j   33,700         33,700  
k 23,000           23,000  
l -9,900             9,900
m -11,000              
n -12,000         -12,000    
total 92,650 33,700 8,350 31,000 20,000 108,000 92,700 -55,000
165,700 165,000

May 3 – Placed four week-end advertisements in the Sun Daily Central Luzon for 18,500 the
amount is due in 30 days.
6 – Bought supplies on account from Supplies, Inc. 8,800
15 – Boron invested in the business own office equipment with fair market value of 52,500
17 – Received 61,800 from charge customers to apply on their accounts
22 – Received a bill from Park Trucking for repair services performed, 8500
26 – Paid supplies, Inc. 8,800 in full payment of account
29 – Paid salaries to employees 21,000
30 – Received 39,000 for services performed
31 – Received and paid gasoline and oil bill relating to the service vehicle 12,500
31 – Billed South China Bank for service performed 45,000
31 – Boron withdrew cash for personal use 14,500
Date Account Title Debit Credit
3 Advertising Expense 18,500  
  Accounts Payable   18,500
6 Supplies Expense 8,800  
  Accounts Payable   8,800
15 Office Equipment 52,000  
  Capital   52,000
17 Cash 61,800  
  Accounts Payable   61,800
22 Repair Expense 8,500  
  Accounts Payable   8,500
26 Accounts Payable 8,800  
  Cash   8,800
29 Salaries Expense 21,000  
  Cash   21,000
30 Cash 39,000  
  Delivery Revenues   39,000
31 Gas Oil and Expense 12,500  
  Cash   12,500
31 Accounts Receivable 45,000  
  Delivery Revenues   45,000
31 Boron Withdrawal 14,500  
  Cash   14,500