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FUNDAMENTALS OF
Learning Area Grade Level 11
W6 ACCOUNTANCY BUSINESS AND
MANAGEMENT 1
Quarter Third Quarter Date

I. LESSON TITLE Analysis of Business Transactions

II. MOST ESSENTIAL The learners:
LEARNING ● analyze common business transactions using the rules of debit and credits
COMPETENCIES (MELCs) ABM_FABM11-111g-7-27
● solve simple problems and exercises in the analyses of business
transactions
ABM_FABM11-111g-7-28

III. CONTENT/CORE CONTENT Analysis of Business Transactions

Reference: Tugas. F.C., et.al. 2016 Fundamentals of Accountancy Business and Management 1.
Vibal Group Inc. Quezon City
Suggested
IV. LEARNING Learning Activities
Timeframe
PHASES
A. Introduction 20 minutes DAY 1
Panimula Good day! Welcome to our lesson.
At the end of the lesson, you are expected to:
1. describe the nature and give examples of business transactions,
2. identify the different types of business documents, and
3. analyze common business transactions using the rules of debit and credit.

Things to ponder
Do you agree that “give and take” is a key to a healthy relationship? If your
answer is Yes, that is a sign that you are on good terms with your loved ones.

Consider this question.

Have you ever wondered if you keep on giving and take nothing in return? Although we
are taught that it is better to give than to receive, this cannot be applied to business. Give
and take must always be evident to business, do you agree? Always remember that, in
every business transaction, there must be something that you will receive and part with.

Example:
Assume Mr. A put up a barbershop. The first thing he did is to look for a place where he
can rent. Is looking for a place for renting already a business transaction? No, it is not,
because he hasn’t received anything yet and nothing that he parted with.

After he found a place, Mr. A paid three months in advance and a 1-month deposit for the
rent. Is this a business transaction? The answer is Yes. Mr. A parted cash for the payment,
and he can now occupy the place which is what he received in return. The documents that
will confirm this transaction is the official receipt that will be issued by his landlord. If you
will be hired as
a bookkeeper of his barbershop what will you do with this transaction?

B. Development 105 minutes

Pagpapaunla d The first step of the accounting cycle is analyzing business transactions from source
documents. It is important that you know the origin of the documents, where they came
from and who issued them. Below are the common source documents used in the business.
1. Official receipt 2. Delivery receipt 3. Bank statement
4. Sales invoice 5. Deposit slip 6. Statement of account
7. Purchase order 8. Withdrawal slip
 In your textbook page 153, an example of the sales invoice and official receipt were
provided for a merchandise type of business.

An official receipt is evidence of the payment received from a third party. With Mr. A’s
example, the source document is the official receipt that the landlord issued to him as
payment for rent.

Analyzing business transactions is identified from a source document that requires

knowledge in the use of charts of accounts. You may refer to page 44 of the textbook.
There are five major accounts, namely:
1. Assets 2. Revenue
3. Liabilities 4. Expenses
5. Equity

Identifying the normal balances of these accounts is important in analyzing business

transactions accurately.

In your week 3 lessons, you were provided a table that summarizes the rules of debit and
credit, and their effects on the accounting equation. Using the table below, we will analyze
various business transactions applying rules of debit and credit and their effects on the five
major accounts.

1. Invested ₱400,000 in his business. The trade name of the business was “MR.
LABAKO”
Asset Liability Equity Revenue Expense
₱400,000 No effect ₱400,000
Increased in the Increased in the form No No
form of cash - of capital - effect effect
Debit Credit
2. Hired Allan and Allie who will manage his business
Not a business transaction, it does not affect the values of the accounts.
3. Collections from various customers for the day – ₱2,000
Asset Liability Equity Revenue Expense
₱2,000 Increased in ₱2,000 Increased in
the form of cash No effect No effect the form of Sales- No effect
– Debit Credit
4. Purchase store supplies fr om Labanila
Asset Liability Equity Revenue Expense
₱8,000
Increased in the form of No effect No effect No effect
Store supplies – Debit No
₱8,000 Decreased in the effect
form of Cash - Credit
Note: ₱8,000 + and ₱8,000 – will have a zero effect on the asset account
5. MR. LABAKO entered into an exclusive contract with Saraw Hotel where the
business will do all the laundry of the hotel.
Note: Non-business transaction
 6. Saraw Hotel availed the services of MR. LABAKO amounting to ₱12,000. Payment
will be made on March 20, 2018.
Asset Liability Equity Revenue Expense
₱12,000 ₱12,000
Increased in the form No Increased in the No effect
of Accounts No effect effect form of Sales –
receivable – Debit Credit
7. Purchase a washing machine amounting to ₱50,000
Asset Liability EquityRevenueExpense
₱50,000 Increased in the form of Equipment-washing machine – Debit
₱50,000 Decreased in the form of Cash – Credit
No effect No effect No effect No effect

8. Received payment from Sara w Hotel amounting t o ₱12,000

Asset Liability Equity Revenue Expense
₱12,000 Increased in the form of
Cash – Debit No No
₱12,000 Decreased in the form of effect No effect No effect effect
Accounts receivable
– Credit
Note: Accounts receivable is credited when already collected from the customer or
client. There will be no effect on the revenue because it was already recognized during
the period of sale.
9. Paid salaries of Bale and Bollie – PHP7,000
Asset Liability Equity Revenue Expense
₱7,000 Increased in the form
of Salary expense – Debit No effect
₱7,000 Decreased in the No No No effect
form of Cash – Credit effect effect
10. Mr. LabaKo needed money for the repair of his house. He withdrew PHP15,000
from the business.
Asset Liability Equity Revenue Expense
₱15,000 Increased in the form of
Withdrawal/Drawing No effect
– Debit ₱15,000 Decreased in No No No effect
the form of Cash – Credit effect effect
Refer to your textbook on pages 74-78 to further increase skills in analyzing business
transactions.

Things to ponder
Understanding the rules of debit and credit is a must for an accurate analysis of transactions.
 C. Engagement 40 minutes To further enhance your knowledge of the concept learned, do the following activities. Write
Pakikipagpali your answers in your notebook.
han Activity 1
Below are the described effects of business transactions on major accounts. Give an example
of business transactions that will describe the effect.
1. Decrease in an asset account and increase in a liability account.
2. Increase in a liability account and increase in an asset account.
3. Increase in an equity account and increase in an asset account.
Activity 2
Assuming you are a bookkeeper of the company. Identify business
transactions that transpire with the use of the documents below.
1. Official receipts (issued by third party) 4. Check (issued by client)
2. Sales invoice (issued by a supplier) 5. Deposit slip
3. Purchase invoice (issued by the business))
4. Withdrawal slip( by the business)
Activity 3
Entrepreneurial mind setting
Pretend that you are an entrepreneur who wanted to put up a bakery in your place. Create at
least 10 lists of business transactions that may transpire for the first month of the business
operation. Write your answer on your notebook.

B. Assimilation 30 minutes DAY 2

Paglalapat The rules of debit and credit will aid in analyzing business transactions. To help you realize
the importance of this concept that will show effects on the basic accounting equations, do
the following activity. (Refer to transactions in the development part of this LeaP. Copy
the table in your notebook
Equity (can be increased by
investment of the owner/ Increase by
Transaction revenue/ Decreased by an expense
number ASSET = Liability
The First one is done for you
1 ₱40,000 ₱40,000
Include all the 10 transactions and compute the total of each column to check equality
of the equation.
Total

V. ASSESSMENT 30 minutes Check what you have learned.

(Learning Activity Sheets for Analyze transactions in exercise 8-9 on page 127 of your textbook. Write your answer in
Enrichment, Remediation or
Assessment to be given on your notebook.
Weeks 3 and 6)
VI. REFLECTION 15 minutes In your notebook, write your insights about the lesson using the prompts below.
I understand that .
I realize that .
I need to learn more about .

Prepared by: Eva C. Topacio, SDO Imus City Checked by: Dr. Josephine P. Canlas, Adora G. Del Mundo, Cherie
L. Logatoc