Chapter 6

Business Transactions and their Analysis

NAME: Date:
Course & Section: Score:

QUIZ 1: JOURNAL ENTRIES (50 pts)

Instruction: Provide the journal entries to record the transactions described below. You do not need
to provide a short description for the journal entries.

1. Owner contributes ₱600,000 to the business.

2. The business obtains a loan of ₱400,000.
3. Purchase of inventory worth ₱200,000 on cash basis.
4. Purchase of inventory worth ₱500,000 on account.
5. Sale of goods for ₱900,000, on account. The cost of the goods sold is ₱400,000.
6. Payment of ₱400,000 as settlement of accounts payable.
7. Collection of ₱500,000 on accounts receivable.
8. Purchase of equipment worth ₱480,000.
9. Drawings of owner amounting to ₱10,000.
10. Payment for interest expense of ₱5,000.

Example:

1. Cash 600,000
Owner’s capital 600,000

“There is a time for everything, and a season for every activity under the heavens;” (Ecclesiastes 3:1)
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NAME: Date:
Couse & Section: Score:

QUIZ 2: (50 pts)

Instruction: Record the transactions in the journal provided below. Indicate the dates and provide a
brief description for each journal entry.

Dates Transactions
Nov. 1, 20x1 A business owner provides ₱2,000,000 cash as investment to the business.
Nov. 5, 20x1 The business obtains a ₱500,000 loan and issues a promissory note.
Nov. 8, 20x1 The business acquires equipment costing ₱1,000,000 on cash basis.
Nov. 16, 20x1 The business purchases inventory costing ₱200,000 on cash basis.
Nov. 30, 20x1 The business sells goods costing ₱135,000 for ₱300,000 on cash basis.

Dec. 1, 20x1 The business sells goods costing ₱180,000 for ₱400,000 on account.
Dec. 4, 20x1 The business purchases inventory costing ₱600,000 on account.
Dec. 9, 20x1 The business collects ₱100,000 accounts receivable.
Dec. 17, 20x1 The business pays ₱200,000 accounts payable.
Dec. 28, 20x1 The business owner made temporary withdrawal of ₱120,000 cash from the
business.

  JOURNAL
Date Account titles Debit Credit
Nov. 1, 20x1  Cash  2,000,000  
  Owner’s capital    2,000,000
to record the contribution by the owner    

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“A man who asks is a fool for five minutes. A man who never asks is a fool for
life.” - Chinese Proverb
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