Fundamentals of Accountancy, Business, and Management 1: Quarter 4 - Module 2

FUNDAMENTALS OF
ACCOUNTANCY,
Quarter
BUSINESS, 4 - Module
AND 2
MANAGEMENT
Journalizing
1
Fundamentals of Accountancy, Business and Management – Grade 11 Alternative Delivery Mode
Quarter 4 – Module 2: Journalizing
First Edition, 2020
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Published by the Department of Education

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Undersecretary: Diosdado M. San Antonio
SENIOR HS MODULE DEVELOPMENT TEAM

Author : Rainner D. Sabino
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Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
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.
Pre-tests are provided to measure your prior knowledge on lessons in each

SLM. This will tell you if you need to proceed on completing this module or if you
need to ask your facilitator or your teacher’s assistance for better understanding of
the lesson. At the end of each module, you need to answer the post-test to self-
check your learning. Answer keys are provided for each activity and test. We trust
that you will be honest in using these.
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.
i
What I Need to Know
This module was designed and written with you in mind. It is here to help
you identify business and nonbusiness transactions, enumerate the types of
business documents, recite the rules of debit and credit, and apply these concepts
in simple cases.
At the end of this module, you are expected to learn how to record transactions
of a service business in the general journal (ABM_FABM11-IVa-d-30).
Specifically, you are expected to:
a. describe the nature of transactions in a service business;

b. identify the parts of a journal; and
c. record transactions of a service business in the general journal.
1
What I Know
Directions: Write TRUE if the statement is correct and FALSE if it is not. Write
your answers on a separate sheet of paper.
1. The journal is called the book of original entry where transactions are first
recorded.
2. Source documents are important in journalizing.
3. If the accountant mistakenly analyzed the transaction, it would result to a
wrong journal entry.
4. The peso sign is always written before every amount in a money column to
avoid confusion.
5. Journal entries require an explanation.
6. Transactions are journalized based on analysis as to their effects on assets,
liabilities, owner’s equity, revenue, and expense.
7. Only the two-column journal is being used in accounting.
8. Accountants must record the transaction with supporting documents such as
the official receipts, sales invoice, and payroll registers.
9. A compound entry has two or more debits and credits.
10. A transaction may be recorded on the day of recording and not on the day
when the transaction occurred.
2
Lesson Journalizing
1
During your previous lessons in FABM1, you learned the different types of
businesses from the activities you accomplished. Those are service, merchandising
and manufacturing. Each type of business requires different accounting procedures.
In this module, you will start to apply accounting concepts and principles in
a service type of business. A service business offers intangible products to
customers, which means that there is no physical product involved. The owner
earns income by providing services that may benefit and satisfy the clients.
Examples of these are funeral services, nail salons, hospitals, and barbershops. It
also includes the rendering of services of professionals like doctors, lawyers, and
accountants.
The succeeding parts of the lesson will cover the recording of business
transactions for a service business, which is called journalizing. This is just one of
the steps included in the accounting cycle given on the next page. These are the steps
in the accounting cycle that will be repeated once the accounting period ends:
1. Analyzing business transactions from source documents

2. Journalizing the business transactions
3. Posting journal entries to the ledger
4. Preparing trial balance
5. Journalizing and posting adjusting journal entries
6. Preparing adjusted trial balance
7. Preparing financial statements
8. Journalizing and posting closing entries
9. Preparing post-closing trial balance
10. Journalizing and posting reversing journal entries
3
What’s In
Directions: Record each transaction in the T-account. Write your answers on a

separate sheet of paper.
a. The owner deposited P150,000 in his business.
b. He bought office furniture for P12,300 in cash.
c. He paid electricity bill for the month amounting to P1,080.
d. He billed customers P13,000 for services on account.
4
e. He paid P15,000 for the salaries of employees.
f. He received P20,0000 for services rendered.
g. He paid P8,400 for the monthly rental of the place.
h. He withdrew P8,500 for personal use.
i. He received P5,500 on account from customers who were

previously billed.
5
j. He paid P599 for telecommunications expense for the month.
Notes to the Teacher/Facilitator
This module prepares students to record transactions

in the general journal. The students will learn the parts of a journal and apply the rules of debit an
What’s New
After analyzing business transactions using the rules of debit and credit, you
are now ready to take it to another level.
In this activity, accountants will analyze business documents whether they

have a financial impact or none in the business. The transactions which are only
financial in nature and have an economic benefit to the business and those which
may change assets, liabilities, and equity will be recorded.
6
Examples of financial transactions:
• Payment of salaries of employees

• Payment of electric, water, and telecommunication bills
• Received payment from customers
• Received payment from customers on account
• Payment for purchasing furniture, equipment, and supplies
Examples of non-financial transactions:
• Orientation of newly-hired employees

• Posting of advertisements in the city
• Awarding of recognition to the business
• Hiring and terminating of employees
The following are examples of source documents:
1. Ofﬁcial receipt or cash receipt

2. Charge invoice or Sales invoice
3. Check or Cash voucher
4. Deposit slips
What Is It
The journal is the accountant’s tool in recording the day-to-day

transactions. It is called the book of original entry, where the accountant records
first the business transactions that occurred in the business. The recording of
business transactions is in sequential form.
Format
The journal consists of the following information:
1. Date. Enter the date when the transaction occurred. The year and month
may be omitted if the transaction occurred in the same year and month.
2. Account Titles and Explanation. First, enter the account to be debited. It

must be located at the extreme left of the first line, while the account to be
credited must be located at the next line which is slightly indented. A brief
description of the transaction is usually made on the line below the credit.
Generally, skip the line after each entry.
7
3. P.R. (Posting Reference). The chart of accounts provides account numbers
for each account title. The accountant will enter those account numbers in
this column once the account titles are used in a journal entry.
4. Debit. The amount to be debited is entered in this column.
5. Credit. The amount to be credited is entered in this column.
The example below shows a journal entry.

GENERAL JOURNAL
Date Account Titles and Explanation P.R. Debit Credit
2019
Dec.1 Cash 101 P100,000
Padilla, Capital 301 P100,000
To record initial Investment
A simple journal entry is a journal entry which has one debit account and
one credit account. The example below shows a simple journal entry.
GENERAL JOURNAL
2019
Dec.1 Accounts Payable 201 P50,000
Cash 101 P50,000
To record payment of loans
A compound journal entry is a journal entry with more than one debit
account or more than one credit account, or both. The example below is a
compound journal entry.
GENERAL JOURNAL
Particulars (Account Titles and

Date P.R. Debit Credit
Explanation)
2019
Dec.1 Equipment 105 P50,000
Cash 101 P25,000
Notes Payable 202 25,000
To record acquisition of
equipment, 50% downpayment, 50%
cash
8
After the identification and measurement of the transactions or events, the
next step is to record them in a journal. The chart of accounts will be provided for
reference in P.R. portion of the journal. For you to better understand the lesson, an
analysis is provided below.
Pamilya Services
Chart of Accounts
Account
Temporary
Permanent Accounts Account No.
No. Accounts
ASSETS INCOME
101 Cash 401 Service Revenue
102 Accounts Receivable
103 Supplies EXPENSES
Taxes and Licenses
104 Service Equipment 501 Expense
502 Salaries Expense
LIABILITIES 503 Utilities Expense
201 Accounts Payable 504 Rent Expense
202 Loans Payable
OWNER'S EQUITY
301 Pamilya, Capital
302 Pamilya, Drawings
Always remember that for each journal entry, two or more accounts are always
affected by each transaction. The sum of the debits must be equal to the sum of the
credits for each transaction and the equality of the accounting equation must
always be maintained.
9
For better understanding, look at these examples:
The transaction covered the month of July 2019 of Pamilya Services, a

photocopying business by Mahal K. Pamilya.
July 1 Mr. Pamilya invested P30,000 cash and service equipment worth
P30,000 in the business.
GENERAL JOURNAL Page 1
Jul-1 Cash 101 P 30,000

Service Equipment 104 30,000
Pamilya, Capital 301 P 60,000
To record initial investment
Analysis:
Increase in Asset: Cash P30,000 Debit
Increase in Asset: Service Equipment P30,000 Debit
Increase in Owner’s Equity: Pamilya, Capital P60,000 Credit
July 1 The business obtained a loan from RDS Bank worth P50,000.
Jul-1 Cash 101 P 50,000

Loans Payable 202 P 50,000
To record loan from RDS Bank
Analysis:
Increase in Liability: Loans Payable P50,000 Credit
July 2 He bought office supplies for P10,000 cash.


Explanation)
Jul-2 Supplies 103 P 10,000

Cash 101 P 10,000
To record purchased of supplies
10
Analysis:
Increase in Asset: Supplies P10,000 Debit
Decrease in Asset: Cash P10,000 Credit
July 3 He paid P2,000 for business permits and licenses.
Jul-3 Taxes and Licenses Expense 501 P 2,000

Cash 101 P 2,000
To record payment for taxes
and licenses
Analysis:
Decrease in Owner’s Equity: Taxes and Licenses P2,000 Debit
Decrease in asset: Cash P2,000 Credit
July 10 Mr. Pamilya hired one personnel with a weekly salary of P1,000
to look after the business.
There is no need to journalize this transaction since this is a non-business

transaction. It does not have an effect on assets, liabilities, equity, revenues or on
expenses.
July 10 The business paid P1,000 for the weekly salary of the employee.
Jul-10 Salaries Expense 502 P 1,000

Cash 101 P1,000
To record payment of salary
Analysis:
Decrease in Owner’s Equity: Salaries Expense P1,000 Debit
11
July 16 He received P8,000 cash for services rendered.
Jul-16 Cash 101 P8,000

Service Revenue 401 P8,000
To record cash received for
services rendered
Analysis:
Increase in Owner’s Equity: Service Revenue P8,000 Credit
Jul-17 Salaries Expense 502 P1,000

Cash 101 P1,000
Analysis:
July 21 He billed a customer P2,000 for services rendered on account.
Jul-21 Accounts Receivable 102 P 2,000

Service Revenue 401 P 2,000
To record customers billed for
services rendered
Analysis:
Increase in Asset: Accounts Receivable P2,000 Debit
Increase in Owner’s Equity: Service Revenue P2,000 Credit
12
July 24 The business paid P1,000 for the weekly salary of an employee.
Jul-24 Salaries Expense 502 P1,000

Cash 101 P1,000
Analysis:
July 27 Mr. Pamilya withdrew P500 from the business.
Jul-27 Pamilya, Drawings 302 P 500

Cash 101 P 500
To record owner's withdrawal
Analysis:
Decrease in Owner’s Equity: Pamilya, Drawings P500 Debit
Decrease in Asset: Cash P500 Credit
July 28 He collected P2,000 which is the amount billed to a customer.
Jul-28 Cash 101 P 2,000

Accounts Receivable 102 P 2,000
To record collection of
customer's account
Analysis:
Increase in asset: Cash P2,000 Debit
Decrease in asset: Accounts Receivable P2,000 Credit
13
July 29 He paid P10,000 for the monthly rent of the place.

Explanation)
Jul-29 Rent Expense 504 P 10,000

Cash 101 P10,000
To record payment of rent
Analysis:
Decrease in Owner’s Equity: Rent Expense P10,000 Debit
July 30 He had to pay P2,500 for the electric bill.

Jul-30 Utilities Expense 503 P 2,500

Accounts Payable 201 P 2,500
To record receipt of electricity
bill
Analysis:
Decrease in Owner’s Equity: Utilities Expense P2,500 Debit
Increase in Liability: Accounts Payable P2,500 Credit
Jul-31 Salaries Expense 502 P 1,000

Cash 101 P 1,000
Analysis:
14
What’s More
Directions: Write FINANCIAL if the transaction is a financial transaction. Write

NON- FINANCIAL if the transaction is not. Write your answers on a
1. The owner paid the salaries of the employees.

2. The owner conducted an orientation to newly hired employees.
3. The owner paid electric, water, and telecommunication bills.
4. The owner received payment from customers.
5. The owner post advertisements in the city.
6. The owner awarded Employee of the Month to a deserving employee.
7. The owner purchased a furniture and paid it in cash.
8. The owner received payment from customers on account.
9. The owner signed the contract to new supplier.
10. The owner withdrew cash from the business.
What I Have Learned
Directions: TRUE or FALSE: Write TRUE if the statement is correct and FALSE if it
is not. Write your answers on a separate sheet of paper.
1. The business transactions are analyzed using the rules of debit and credit.
2. The documents used by the business may not be analyzed if it has
financial impact or effect.
3. The journal is a chronological record of the entity’s transactions.
4. The journal is the book of final entry.
5. Journalizing is the recording phase of accounting.
15
What I Can Do
Directions: Record the following transactions in the general journal. Use the following
numbers for posting reference. Write your answers on a separate answer
sheet.
101 Cash 201 Accounts Payable

102 Accounts Receivable 301 Makabayan, Capital
103 Supplies 302 Makabayan, Drawings
104 Furniture and Fixtures 401 Service Revenue
December 1, 2019 Rey Makabayan invested P100,000 cash in the business.

GENERAL JOURNAL Page
December 7, 2019 He bought office supplies worth P2,500.

December 10, 2019 He purchased furniture and fixtures on account

amounting to P25,000.
16
December 18, 2019 He billed customers P40,000 for services rendered.
December 23, 2019 He withdrew P10,000 cash in the business.

December 25, 2019 He received P5,000 for services rendered.

December 28, 2019 He made additional investment of P15,000 cash.

17
Assessment
Directions: Prepare the journal entry for each transaction. Use the following account
numbers for posting reference. Write your answers on a separate sheet
of paper.
Assets Revenue
101 Cash 401 Service Revenue
102 Accounts Receivable Expenses
103 Supplies 501 Salaries Expense
104 Service Vehicle 502 Rent Expense
Liability 503 Utilities Expense
201 Accounts Payable 504 Advertising Expense
Owner’s Equity 505 Miscellaneous Expense
301 Angelie, Capital
302 Angelie, Drawings
Michelle Angelie established Angelie’s Advertising Business. The following

are the transactions for the whole month of October 2019.
Oct. 1 Michele Angelie deposited P250,000 under the name of the business.
2 She acquired a service vehicle in the amount of P195,000 on account.
3 She acquired supplies for cash worth P57,000.
9 She received P87,500 cash for painted signs.
10 She paid the month’s rent amounting to P25,000.
11 She painted signs for Mundo Mobile on account for P170,000.
12 She paid P55,000 on account from October 2.
16 She withdrew P25,000 for personal use.
23 She collected P35,000 from Mundo Mobile.
27 She paid salaries amounting to P57,000 for the month.
30 She paid PH Telecom P7,500 for communication services for
the month.
31 She paid the bill amounting to P5,500 to AdLamao for advertising for
the month.
18
Additional Activities
Directions: Record the transactions of Jinky Estrada in the general journal. Use the
following account code for posting reference. Write your answers on a
Account Titles
101 Cash 301 Estrada, Capital
102 Accounts Receivable 401 Consulting Revenues
103 Office Furniture 501 Salaries Expense
104 Office Equipment 502 Rent Expense
201 Accounts Payable
Jinky Estrada is an experienced event planner. The transactions for

December 2018 are the following:
Dec. 1 Jinky invested P100,000 in cash to start her own business.

3 She paid 5,000 for one month’s rent.
4 She bought office furniture for P15,000 in cash.
4 She received a laptop computer worth P54,000. She paid 50% as
downpayment for it with a balance due in 30 days.
6 She performed services for P12,000 in cash.
7 She did services for P11,000 on credit.
9 She acquired a fax machine for P8,500; paid P4,000 in cash, balance
due in 10 days.
11 She received P5,400 from clients on account.
14 She paid P12,000 for salaries.
15 She settled in full the balance for the fax machine
19
References
Ballada, Win. 2018. "Basic Financial Accounting and Reporting 21st Edition."
Fundamentals of Accountancy Business and Management 1. 2016. DepEd K to 12

Curriculum Guide.
Fundamentals of Accountancy Business and Management 1. 2016. DepEd K to 12

Teacher’s Guide.
Tugas, Florence C., Herminigilda E. Salendrez, and Joy S. Rabo.

2016. Fundamentals of Accountancy Business and Management 1. Vibal
Group Inc. Quezon City Phils.
Valencia, Edwin G., Roxas, Gregorio, F.2014. Basic Accounting Concepts, Principles,
Procedures, and Applications. Valencia Educational Supply. Philippines
For inquiries or feedback, please write or call:
Department of Education – Region III,

Schools Division of Bataan - Curriculum Implementation Division Learning Resources
Management and Development Section (LRMDS)
Provincial Capitol Compound, Balanga City, Bataan Telefax: (047) 237-2102

Email Address: bataan@deped.gov.ph

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FUNDAMENTALS OF

Published by the Department of Education

SENIOR HS MODULE DEVELOPMENT TEAM

SDO-BATAAN MANAGEMENT TEAM:

REGIONAL OFFICE 3 MANAGEMENT TEAM:

Printed in the Philippines by Department of Education – Schools Division of Bataan

Office Address: Provincial Capitol Compound, Balanga City, Bataan

Pre-tests are provided to measure your prior knowledge on lessons in each

Specifically, you are expected to:

a. describe the nature of transactions in a service business;

2. Source documents are important in journalizing.

3. If the accountant mistakenly analyzed the transaction, it would result to a

wrong journal entry.

5. Journal entries require an explanation.

6. Transactions are journalized based on analysis as to their effects on assets,

liabilities, owner’s equity, revenue, and expense.

7. Only the two-column journal is being used in accounting.

8. Accountants must record the transaction with supporting documents such as

the official receipts, sales invoice, and payroll registers.

9. A compound entry has two or more debits and credits.

when the transaction occurred.

1. Analyzing business transactions from source documents

Directions: Record each transaction in the T-account. Write your answers on a

a. The owner deposited P150,000 in his business.

b. He bought office furniture for P12,300 in cash.

c. He paid electricity bill for the month amounting to P1,080.

d. He billed customers P13,000 for services on account.

f. He received P20,0000 for services rendered.

g. He paid P8,400 for the monthly rental of the place.

h. He withdrew P8,500 for personal use.

i. He received P5,500 on account from customers who were

Notes to the Teacher/Facilitator

This module prepares students to record transactions

In this activity, accountants will analyze business documents whether they

• Payment of salaries of employees

Examples of non-financial transactions:

• Orientation of newly-hired employees

The following are examples of source documents:

1. Ofﬁcial receipt or cash receipt

The journal is the accountant’s tool in recording the day-to-day

The journal consists of the following information:

2. Account Titles and Explanation. First, enter the account to be debited. It

4. Debit. The amount to be debited is entered in this column.

5. Credit. The amount to be credited is entered in this column.

The example below shows a journal entry.

Date Account Titles and Explanation P.R. Debit Credit

Date Account Titles and Explanation P.R. Debit Credit

Particulars (Account Titles and

The transaction covered the month of July 2019 of Pamilya Services, a

Date Account Titles and Explanation P.R. Debit Credit

Jul-1 Cash 101 P 30,000

Date Account Titles and Explanation P.R. Debit Credit

Jul-1 Cash 101 P 50,000

July 2 He bought office supplies for P10,000 cash.

Particulars (Account Titles and

Jul-2 Supplies 103 P 10,000

July 3 He paid P2,000 for business permits and licenses.

GENERAL JOURNAL Page 1

Date Account Titles and Explanation P.R. Debit Credit

Jul-3 Taxes and Licenses Expense 501 P 2,000

There is no need to journalize this transaction since this is a non-business

Date Account Titles and Explanation P.R. Debit Credit

Jul-10 Salaries Expense 502 P 1,000