ACC 106: Intermediate Accounting 1

Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

Lesson Title: Materials:

Review of the Accounting Process Calculator, Reviewer Notebook, Textbook

Learning Targets: References:

At the end of the learning session: Millan, Zeus Vernon B.; Intermediate
1. I can describe the steps in the accounting cycle. Accounting 1
2. I can discuss the types of accounts and journal
entries. 3. I can explain the errors revealed and not
revealed by a trial balance.

Productivity Tip:
You have your to-do list for the day, but the hardest question is where do you start? Tackle the hardest
task first.

A. LESSON PREVIEW/REVIEW

1) Activity 1 : Introduction/Review (2 mins)

Hello there! Ready for more activities for the day? Don’t worry, this will be fun! ☺ But before that,
let’s just try to see if you still know the previous module. Answer the questions below and check the
answer at the end of this module under the Key to Correction part if you got it right. Ready, get set, go!
a. Adjusting entries are necessary to obtain a proper matching of revenue and expense.
True ____ or False ____
b. An accrued revenue can best be described as an amount not collected and not currently
matched with expenses. True ____ or False ____

2) Activity 2 (LO1, LO2, & LO3): What I Know Chart, part 1 (3 mins)

Alright! Let’s see what you already know, answer the first column (What I know). Leave the
third column (What I Learned) blank at this time.

What I Know Questions What I Learned (Activity 5)

Accounting cycle is the 1. What is an accounting cycle? Accounting cycle is the

steps used in preparing steps or procedure used in
financial statements. recording transactions and

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

preparing financial
statements.

1. Identifying and 1. Identifying and

analysing analysing
transactions. transactions.
2. Journalizing 2. Journalizing
3. Posting 3. Posting
4. Preparing the 4. Preparing the
unadjusted trial unadjusted trial
balance balance
5. Preparing the 5. Preparing the
adjusting entries 2. What are the steps in the adjusting entries
6. Preparing the accounting cycle? 6. Preparing the
adjusted trial adjusted trial
balance balance
7. Preparing the 7. Preparing the
financial statements financial statements
8. Closing the book 8. Closing the books
9. Preparing the post- 9. Preparing the post-
closing trial balance closing trial balance
10. Preparing the 10. Preparing the
reversing entries. reversing entries.

True 3. True or False. Trial balance is True

prepared to check the equality of
total debits and total credits in the
ledger?
B. MAIN LESSON
1) Activity 3 (LO1, LO2, & LO3): Content Notes (15 mins)

Make sure to highlight or underline the important parts!

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

As defined by American Association of Accountants (AAA), Accounting is a process of identifying,

measuring and communicating economic information to permit informed judgments and decisions by
users of the information.

Accounting information system is the system of collecting and processing transactions, data and
disseminating financial information to interested parties.

LO1: Describe the steps in the accounting cycle

Accounting Cycle
The accounting cycle represents the steps or accounting procedures normally used by entities to record
transactions and prepare financial statements.

Steps in the Accounting Cycle:

1. Identifying and analyzing transactions
2. Journalizing
3. Posting
4. Preparing the unadjusted trial balance
5. Preparing the adjusting entries
6. Preparing the adjusted trial balance
7. Preparing the financial statements
8. Closing the books
9. Preparing the post-closing trial balance
10. Preparing the reversing entries

LO2: Discuss the types of accounts and journal entries.

The Double-Entry System

Under the Double-entry system, each transaction is recorded in two parts – debit and credit. The double-
entry system makes use of the following concepts:
● Duality – this concept views each transaction as having a two-fold effect on values – a value
received and a value parted with, and each transaction is recorded using at least two accounts.
● Equilibrium – this concept requires each transaction to be recorded in terms of equal debits and
credits.

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

Accounting Records

Journal – “book of original entry”

● General Journal –used to record transactions other than those that are recorded in the special
journals.
● Special Journal – used to record transactions of a similar nature.

Ledger – “book of final entry”

– is a systematic compilation of a group of accounts.
● General ledger – contains all accounts appearing in the financial statements.
● Subsidiary ledger – supporting ledger for controlling accounts in the general ledger.

Account
Account is the basic storage of information in accounting, e.g., “cash,” “land,” “accounts payable,” etc.
Accounts in the ledger follow the format of a T-account.

Chart of accounts - list of all the accounts used by the entity.

Types of Accounts
1. Real / Permanent accounts
- accounts that are not closed at the end of the accounting period. These are the accounts found in
the statement of financial position (Assets, Liabilities, and Equity)
2. Nominal/ Temporary accounts
- accounts that are closed at the end of the accounting period. These include all income and
expenses accounts, drawings and dividends accounts,clearing accounts and suspense accounts.
3. Mixed accounts
- are accounts that have both real and nominal account components.
4. Contra accounts
- are accounts that are deducted from a related account (e.g. depreciation)
5. Adjunct accounts
- are accounts that are added to a related account(e.g. premium on bonds payable)

Trial Balance
Trial Balance is a list of general ledger accounts and their balances. It is prepared to check the equality of
total debits and total credits in the ledger.

LO3: Explain the errors revealed and not revealed by a trial balance.

Errors revealed by a trial balance

The trial balance can reveal errors that caused the total debits and total credits to be unequal. Examples:
1. Journalizing or posting one-half of an entry. ( a debit without a credit, or vice versa)

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

2. Recording one part of an entry at a different amount than the other part.
3. Transplacement error (slide error) on one side of an entry. (e.g., 2,000 is recorded as 200 or 20,000)
4. Transposition error on one side of an entry. (E.g., 12,341 is recorded as 12,431 or 12,143)

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

Errors not revealed by a trial balance

1. Omitting entirely the entry for a transaction.
2. Journalizing or posting an entry twice.
3. Using a wrong account with the same normal balance as the correct account, (e.g. debit to cash is
erroneously debited to receivables).
4. Wrong computation with the same erroneous amount posted to both the debit and credit sides.

Adjusting Entries
Adjusting entries are entries made prior to the preparation of financial statements to update certain
accounts so that they reflect correct balances as of the designated time.

Financial Statements
Financial statements are the means by which the information accumulated and processed in financial
accounting is periodically communicated to the users.

A complete set of financial statements consists of:

1. Statement of financial position;
2. Statement of profit or loss and other comprehensive income;
3. Statement of changes in equity;
4. Statement of cash flows;
5. Notes;
(5a) Comparative information; and
6. Additional statement of financial position (required only when certain instances occur).

Methods of Initial Recording of income and Expenses

● Income
(a) Liability method- a liability account is credited for the receipt of the income.
(b) Income method- an income account is credited for the receipt of the income.

● Expenses
(a) Asset method- the original payment is debited to an expense account. (b) Expense method-
the original payment is debited to an asset account.

Reversing entries
Reversing entries may be made on the following:
(a) all accruals,
(b) prepayments initially recorded using the expense method, and (c) unearned
income initially recorded using the income method.

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

2) Activity 4: Skill-building Activities (15 mins + 2 mins checking) Score: ________________

Let’s try to practice what you have learned! Check your answers against the Key to Corrections
found at the end of this SAS. Write your score on the space provided.

Part I. Form groups of 5. Members must exchange ideas and present their answers to the class.
Recall the various definitions of Accounting from the following organizations. (AAA | ASC | AICPA )
American Accounting Association Accounting is a process of identifying,
(Hint: is a process ) measuring and communicating economic
information to permit informed judgments
and decisions by users of the information.
Accounting Standards Council Accounting is a service activity. Its
(Hint: service) function is to provide quantitative information,
primarily financial in nature, about economic
entities that is intended to be useful in
making economic decisions.

American Institute of Certified Accounting is an art of recording,

Public classifying, summarizing and
Accountants interpreting financial information.
(Hint: is an art)
Part II. What is an Accounting Cycle?
____________________________________________________________________________________
____________________________________________________________________________________

Part III. What are the steps involved in the accounting cycle. Enumerate/Explain each step briefly.
Step 1 Identifying and analysing

Step 2 Journalizing

Step 3 Posting

Step 4 Preparing the unadjusted trial balance

Step 5 Preparing the adjusting entries

Step 6 Preparing the adjusting trial balance

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

Step 7 Preparing the financial statements

Step 8 Closing the books

Step 9 Preparing the post-closing trial balance

Step 10 Recording of reversing entries

3) Activity 5: What I Know Chart, part 2 (3 mins)

It’s time to answer the questions in the “What I Know Chart” in Activity 2. Write your answers in the
“What I Learned” column. Let’s see your improvement!

4) Activity 6 (LO1, LO2, & LO3): Check for Understanding (5 mins)

To better test your knowledge on the topic, encircle the best answer below without looking in your
content notes. Be honest at all times. Your teacher will provide you the key answer in this activity.

1. The purpose of preparing a trial balance is to

a. Ensure that there were no errors committed.
b. To prove that all journal entries were posted correctly.
c. To prove the equality of the monetary totals of debits and credits.
d. d. All of these
2. It is a systematic compilation of a group of accounts.
a. Chart of accounts
b. Trial balance
c. Ledger
d. Journal
3. It is a list of accounts and their balances.
a. Chart of accounts
b. Trial balance
c. Ledger
d. Journal
4. Which of the following criteria must be met before an event or item is recorded for accounting
purposes?
a. The event or item can be measured objectively in financial terms.
b. The event or item is relevant and reliable.
c. The event affects, or the item meets the definition of, a financial statement element.
d. d. All of these must be met.
5. A trial balance may prove that debits and credits are equal, but
a. an amount could be entered in the wrong account.

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

b. a transaction could have been entered twice.

c. a transaction could have been omitted.
d. all of these.
6. When an item of expense is paid and recorded in advance, it is normally called a(n)
a. prepaid expense.
b. accrued expense.
c. estimated expense.
d. cash expense.
7. An unearned revenue can best be described as an amount
a. collected and currently matched with expenses.
b. collected but not currently matched with expenses.
c. not collected but currently matched with expenses.
d. not collected and not currently matched with expenses.
8. Which of the following is a real (permanent) account?
a. Inventory
b. Sales
c. Accounts Receivable
d. Both Inventory and Accounts Receivable
9. Reversing entries are
1. normally prepared for prepaid, accrued, and estimated items.
2. necessary to achieve a proper matching of revenue and expense.
3. desirable to exercise consistency and establish standardized procedures.
a. 1
b. 2
c. 3
d. 1 and 2
10. Adjusting entries that may be reversed include
a. all accrued revenues.
b. those that debit an asset or credit a liability.
c. all accrued expenses.
d. all of these.
11. Which of the following errors may be revealed by a trial balance?
a. A debit to salaries expense was posted in the ledger as a debit to insurance expense.
b. Expense already incurred was not recorded.
c. The debit and credit posting of a credit sale were omitted.
d. The credit posting of a payment of account payable was omitted.
12. A corporation received cash of ₱24,000 on August 1 for one-year's rent in advance and recorded the
transaction on that day as a credit to unearned rent revenue for the full amount. The December 31 adjusting
entry is:
a. Rent revenue ₱10,000

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

Unearned rent revenue ₱10,000

b. Unearned rent revenue ₱24,000
Rent revenue ₱24,000
c. Rent revenue ₱14,000
Unearned rent revenue ₱14,000
d. Unearned rent revenue ₱10,000
Rent revenue ₱10,000
13. On July 1, a company paid a ₱600 premium for a three-year property insurance policy; insurance
expense was debited in full for the ₱600. The adjusting entry at the end of the year is:
a. Prepaid insurance ₱1,000
Insurance expense ₱1,000
b. Prepaid insurance ₱ 500
Insurance expense ₱ 500
c. Prepaid insurance ₱ 100
Insurance expense ₱ 100
d. Prepaid insurance ₱ 500
Insurance expense ₱ 500
14. On May 1, a company purchased a six-month subscription to an investment analysis
servicepublication. The ₱300 cash payment was debited to subscription expense at the time. The adjusting
entry on June 30, the end of the company's fiscal year, is:
a. Subscription expense ₱100
Subscription payable ₱100
b. Prepaid subscriptions ₱100
Subscriptions expense ₱100
c. Prepaid subscription ₱200
Subscription expense ₱200
d. No adjusting entry was required because the subscription was for only six months not a full
year.
15. A sole proprietor took some goods costing ₱800 from inventory for his own use. The normal selling
price of the goods is ₱1,600. Which of the following journal entries would correctly record this?
a. Drawings account 800
Inventory account 800
b. Drawings account 800

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

Purchases returns account 800

c. Sales account 1,600
Drawings account 1,600
d. None of these

C. LESSON WRAP-UP

1) Activity 7: Thinking about Learning (5 mins)

1. Work Tracker

You are done with this session! Let’s track your progress. Shade the session number you just
completed.

2. Think about your Learning

From a rating of 1-10, determine if you have learned all the learning objectives. What is the reason
for your rating?
I choose 9 because I’m still a little bet confuse about methods of initial recoding.
________________________________________________________________________________
________________________________________________________________________________

What part of the module gave you a hard time to comprehend?

About the methods of initial recording of income and expenses.
______________________________________________________________________________
________________________________________________________________________________
Any other questions or concerns you want to raise?
None as of the moment.
_______________________________________________________________________________
________________________________________________________________________________

2) Assignment

To enhance your knowledge regarding the topic, answer Problems 1, 2, and 3 in your book. Your
teacher will provide the key answers later on.

FAQs

1. Accounting process can be classified into two parts, namely recording phase and summarizing phase.

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

What are the steps involved in each phase?

- The recording phase includes analyzing the transaction, journalizing and posting.
- The summarizing phase includes the unadjusted trial balance, adjusting entries, adjusted trial
balance, financial statement, closing the books, post-closing trial balance and reversing entries

KEY TO CORRECTIONS

Activity 1: Introduction/Review
1. True 2. False
- The matching principle requires that those costs and expenses incurred in earning a revenue shall
be reported in the same period. The matching principle is associated with the accrual basis of
accounting and adjusting entries.

Activity 4: Skill-building Activities. Give 1 point for each item. Total of 15 points in all.

I. Definition of Accounting: (3 points)

● American Association of Accountants (AAA)

Accounting is a process of identifying, measuring and communicating economic information to permit
informed judgments and decisions by users of the information.
● Accounting Standard Council (ASC)
Accounting is a service activity. Its function is to provide quantitative information primarily financial in
nature which helps users make informed decisions.
● American Institute of Certified Public Accountants(AICPA)
Accounting is an art of recording, classifying, summarizing and interpreting financial information.

II. Accounting Cycle (2 points) represents the procedures or steps used in recording transactions and
preparing financial statements. The accounting cycle implements the accounting process.

III. Steps in Accounting Cycle: (10 points)

1. Identifying and analyzing transactions or business documents- the accountant determines the impact
of the transactions on the financial position as represented by the basic accounting equation “assets
equals liabilities plus entity”
2. Journalizing- this is the process of recording the transactions in a journal.

ACC 106- Intermediate Accounting 1

SAS Day 2
 ACC 106: Intermediate Accounting 1
Student Activity Sheet Module # 2

Name: _Jessica Navarro Apostol____________________________________ Class number: _______

Section: A-BSA-02______Schedule: ____T 5:30-7:30___________________ Date: __08-03-2021_____

3. Posting- transactions as classified and recorded in the journal are transferred to the appropriate
accounts in the general ledger and subsidiary ledgers ledger, if appropriate.
4. Preparing the unadjusted trial balance
5. Preparing the adjusting entries
6. Preparing the adjusted trial balance
7. Preparing the financial statements
8. Closing the books
9. Preparing the post-closing trial balance
10. Preparing the reversing entries

Activity 6: Check for Understanding.Your teacher will provide the key answers in this activity.

Assignment. Your teacher will provide the key answers in this assignment.

“The beginning is always the hardest.” Keep pursuing. Keep overcoming.

-Nothing Follows-

ACC 106- Intermediate Accounting 1

SAS Day 2