Professional Documents
Culture Documents
Accountancy, Business
and Management 1
Quarter 3 – Module 4:
Types of Major Accounts
Fundamentals of Accountancy, Business and Management 1 – Grade 11
Alternative Delivery Mode
Quarter 3 – Module 4: Types of Major Accounts
First Edition, 2020
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Team Leaders:
School Head : Marijoy B. Mendoza, EdD
LRMDS Coordinator : Karl Angelo R. Tabernero
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
This module was designed and written so that you will be able to define the five
major accounts. Also, you will be able to identify and classify accounts according to
the five major types (ABM_FABM11-IIId-e-19-21).
1
What I Know
Directions: Identify what is described in each number. Choose the word/s from
the box below. Write your answers on a separate sheet of paper.
__________3. These are the assets / resources that are held for resale.
__________4. These are the investments of the firm made for long term purposes.
__________5. These are obligations that reach their due dates for payments within
one year after the year-end date.
__________6. Examples of this are cash, supplies and furniture and fixtures.
__________8. These are worth of cash and other assets invested in the business.
2
Lesson
In accounting, there are major accounts that you need to know and understand
clearly so you will not be confused on recording business transactions. These are
assets, liabilities, owner’s equity, revenues, and expenses.
Assets, liabilities, and owner's equity have been discussed in the previous lessons.
You have also previewed the revenues and expenses. Understanding of these lessons
will enable you to debit and credit an account which is an integral part of journalizing
business transactions.
What’s In
3
What’s New
Directions: Choose the term being described from the given choices below. Write
only the letters of your answers on a separate sheet of paper.
What is it
Let us first know the definitions of the five (5) major accounts:
1. Assets are the resources owned and controlled by the firm or the company.
Examples of these are cash, computer systems and patents.
2. Liabilities are the obligations of the company arising from past events which
are to be settled in the future. These represent what the company owes to
other people, organization, and financial institutions.
Examples of these are mortgages, vehicles and loans.
3. Equity or Owner’s Equity is the owner’s claims in the business. It is part of
the total assets that the owners of the company fully own.
An example of this is capital.
4
4. Revenue or Income is the money that the company earns from its regular
sales of products or services. This is earned by the company through sales
of products or services.
Examples of this are sale of building materials and accounting services
by a CPA firm.
5. Expenses are the money that the company spends to produce the goods or
services it sells.
Examples of these are rent expense, supplies expense and salaries
expense.
Assets
1. Current Assets
2. Non- Current Assets
• Current Assets are assets that can be collected, sold, and even used up to one
year after year-end date.
• Non-current Assets are assets that cannot be collected, sold, and even used
up to one year after year-end date.
Property, Plant, and Equipment are long-lived assets that have been
Long term Investments are the investments of the firm made for long term
purposes.
5
• Tangible Assets are physical assets in the form of cash, furniture and fixtures,
and supplies.
Liabilities
Current Liabilities are those that reach its due date for payment (paid, recognized
as revenue) within one year after year-end date.
Examples of Current Liabilities
Accounts Payable are amounts due or debts to the suppliers for goods
purchased or for services received on account.
Notes Payable are amounts due to third parties supported by a written note
or promise.
Accrued Expenses are treated as liabilities since these are the expenses
that are incurred but not yet paid (e.g. salaries payable,
taxes payable).
Unearned Income is cash or payment collected in advance.
Non-current Liabilities are those that do not reach its due date for payment, (paid,
recognized as revenue) within one year after year-end date.
Loans Payable is a contract wherein the owner of the property gives the
right to use it to another party in exchange for an interest
payment and gives back the property at the end of their
contract. It is documented by promissory note. And in the
case there is still a portion which is unpaid as of the date
of a company's balance sheet, the remaining balance on
the loan is called a loan payable.
6
Owner's Equity
There are two (2) important elements that comprised the equity:
•Capital is the worth of cash and other assets invested in the business.
•Drawing is an account debited for assets withdrawn by the owner for
personal use from the business.
Expense -is the decrease in resources resulting from the operations of the
business.
After the discussion on the Five Major Accounts, let us now proceed on the chart
of accounts starting from its definition.
7
Chart of Accounts:
8
What’s More
Directions: Classify each account according to its category. Put a check (✓)
on the right column where each item belongs. Write your answers on a separate
sheet of paper.
Account
Assets Liabilities
Title
Owner’s Revenue
Non- Non- Expenses
Current Current Equity s
Current Current
Assets Liabilities
Assets Liabilities
1. Cash
2. Accounts
Payable
3. Building
4. Mortgage
Payable
5. Service
Revenues
6. Accounts
Receivable
7. Salaries
Expense
8. Inventory
9. Rent
Expense
10.
Unearned
Service
Revenue
9
What I Have Learned
Directions: Identify what is described on each number. Find the answer from the
box below. Write your answers on a separate sheet of paper.
10
What I Can Do
Directions: Prepare a chart of accounts for J. Padilla Barber Shop. Write your
answers on a separate sheet of paper.
Assessment
Directions: Choose the letter of the correct answer. Write your answers on a separate
sheet of paper.
11
3. These are the debts of the business.
A. liabilities
B. assets
C. revenues
D. owner's equity
9. These are amounts due from third parties supported by promissory notes.
A. notes payable
B. notes receivable
C. notebook
D. none of the above
10. These are the items purchased by an enterprise that are unused as of the
reporting date.
A. supplies
B. inventories
C. equipment
D. machineries
12
11. These are long-lived assets that have been acquired for use in operations.
A. property
B. property, plant, and equipment
C. non-current assets
D. current assets
13. This is an account withdrawn by the owner for personal use from the
business.
A. capital
B. accounts payable
C. drawing
D. mortgage payable
Additional Activities
Directions: Give at least two (2) examples for each major account. Write your answers
on a separate sheet of paper.
Owner's
Assets Liabilities Revenues Expenses
Equity
13
14
What I Know:
1. Cash
2. Prepaid Expenses
3. Inventories
4. Long term investments
5. Current Liabilities
6. Tangible assets
7. Notes payable
8. Capital
9. Income
10. Expense
What’s New:
1. I 2. J 3. H 4. G 5. F
6. E 7. D 8. C 9. B 10. A
Answer Key
15
What's In
Asset Liability Owner's
Equity
1. Invested cash in the + Ne +
business.
2. Purchased equipment +- Ne Ne
on a cash basis.
3. Billed a customer for a + Ne +
spa service.
4. Paid employee's salary. - Ne -
5. Purchased supplies on + + Ne
account.
6. Paid an advertisement - Ne -
for the company's new
product.
7. Paid the rent in +- Ne Ne
advance.
8. Received cash from + Ne +
customers.
9. Withdrew cash for some - Ne -
personal use.
10. Invested a vehicle on + Ne +
the company.
16
What's More
ACCOUNT ASSET LIABILITIES OWNER’S REVENUE EXPENSES
EQUITY
TITLE
Current Non- Current Non-
Asset Current Liability Current
ASSET Liability
1. Cash ✓
2. ✓
Accounts
Payable
3. Building ✓
4. ✓
Mortgage
Payable
5. Service ✓
Revenue
6. ✓
Accounts
Receivable
7. Salaries ✓
Expense
8. ✓
Inventory
9. Rent ✓
Expense
10. ✓
Unearned
Service
Revenue
17
What I Have Learned
1. Chart of Accounts
2. Expenses
3. Notes Receivable
4. Intangible
5. Tangible
6. Accrued Income
7. Prepaid Expenses
8. Cash
9. Income
10. Asset
11. Inventories
12. Drawing
13. Mortgage Payable
14. Owner’s Equity
15. Capital
18
Assessment:
1. A
2. A
3. A
4. A
5. A
6. A
7. A
8. A
9. A
10. A
11. B
12. D
13. C
14. D Additional Activity:
15. A 1-5 Answers may vary
WHAT I CAN DO:
ASSET
Account Code Account Title
101 Cash
102 Accounts Receivable
103 Inventory
104 Prepaid Expense
105 Supplies
106 Equipment
107 Building
108 Land
LIABILITIES
201 Accounts Payable
202 Notes Payable
CAPITAL
301 Padilla, Capital
302 Padilla, Drawings
401 Service Revenue
501 Salaries Expense
502 Rent Expense
503 Utilities Expense
References
Anastacio, Ma. Flordeliza. 2011. Financial Management (With Industry Based Perspective). Manila:
Rex Book Store.
Gilbertson, Claudia. 2010. Fundamentals Of Accounting. 8th ed. Australia: Cengage Learning.
Teaching Guide For Senior High School, Fundamentals Of Accountancy, Business And Management 1.
2016. Quezon City: Commission on Higher Education.
Pefianco, Erlinda C. 1996. The Accounting Process: Principles And Problems. Makati: Goodwill Trading.
Padillo, Nicanor, Jr. 2011. Financial Statements Preparation, Analysis And Interpretation. Manila: GIC
Enterprises.
19
For inquiries or feedback, please write or call: