Name: Rodelyn Waclin

Learning Tasks:

ACTIVITY 1: Write TRUE if the statement is correct or FALSE if it is incorrect.

TRUE 1. In accrual basis of measuring earnings, income is recognized when the

earnings process and collection have been made.
TRUE 2. Bad debts expense is not recognized in cash basis accounting because there is
no trade receivables recorded.
FALSE 3. There is no provision for depreciation in cash basis accounting because there
is no actual cash involved.
FALSE 4. In the cash basis accounting, expenses are reported when actually incurred
and paid.
TRUE 5. Under the SCI method of initially recording prepayment, the expense account
is debited.
TRUE 6. Under the SFP method of initially recording pre-collection, the liability
account is credited.
TRUE 7. Regardless of how a prepayment or advance collection was originally
recorded, the adjustments will bring the accounts up-to-date before the
financial statements are prepared.
TRUE 8. When the year-end adjustment on pre-collection requires a debit to liability
account, then the initial recording was under the liability method.
TRUE 9. Pre-collections initially recorded as income will overstate the income at the of
the accounting period if no adjustment is done for unearned portion.
FALSE 10. The cost of tangible assets is allocated throughout the useful life of the assets
by debiting the annual proportionate depreciation expense account.
TRUE 11. Amortization is the allocation of the acquisition costs of an intangible assets
over its legal or accounting estimated life.
TRUE 12. Depreciation expense is always equal to accumulated depreciation at the end
of any accounting period.
TRUE 13. Salvage value is the same as scrap value for computation of depreciable
amount.
TRUE 14. Intangible assets that are internally developed are generally taken up as an
outright expense.
TRUE 15. Adjusting entries are made so that the financial statements would adhere to
the generally accepted recognition principle.
TRUE 16. Adjusting entries are made to conform to the matching principle of
accounting.
FALSE 17. Accrued expenses include expenses that were incurred but remain unpaid at
the end of an accounting period.
FALSE 18. Prepayments are always taken up in books as assets at the initial recording.
FALSE 19. Prepayment of interest expense under asset method should be recorded as
debit to unearned interest.
TRUE 20. Under the expense method of recording prepayments, the unexpired portion
at the end of the accounting period is to be debited to the asset account.
ACTIVITY 2: Write your answer on the space provided.

1. On October 1, 200A, Jara Company received a 4-month note from a customer amounting to
P400, 000, 12% interest. Record the adjusting entry as of December 31, 200A.

Oct 1 Notes Receivable P400, 000

Cash P400,000
Dec 31 Interest Receivable P12, 000
Interest Income P12, 0000

2. On September 1, 200A, Jay Company issued a 5-month note to a supplier amounting to P200,
000, 10% interest. Record adjusting entries as of December 31, 200A.

Sept 1 Cash P200, 000

Notes Payable P200,000
Dec 31 Interest Expense P6, 666
Interest Payable P6, 666

3. Maya Company purchased a two- year insurance policy on August 1, 200A for P30, 000. Give the
adjusting entries as of December 31, 200A assuming the company uses:
a) Asset Method

Aug 1 Insurance Expense P6, 250

Prepaid Insurance P6, 250

b) Expense Method

Aug 1 Prepaid Insurance P23, 750

Insurance Expense P23, 750

4. Jaya Company is engaged in constructing and renting office space to various businesses. On
September 1, 200A one tenant gave P200, 000 cash for six month’s rent. Give the adjusting
entries as of December 31, 200A assuming the company uses:

A) Liability Method

Dec 1 Unearned Rent P66, 667

Rent Income P66, 667

B) Revenue Method
 Dec 1 Rent Income P133, 333
Unearned Rent P133, 333
NAME: Rodelyn Waclin

Learning tasks:

Activity 1: Write TRUE if the statement is correct of FALSE if it is incorrect.

FALSE 1. An accounting cycle is always equal to one calendar period.

TRUE 2. A one-year accounting period may be a calendar or fiscal period.
FALSE 3. An accounting period is always comprised of one year or twelve months.
TRUE 4. The primary objective of the accounting activity is to state an opinion
regarding the fairness of financial statements.
TRUE 5. The basic procedure in making a trial balance is to check the accuracy of
the debit and credit.
FALSE 6. When the trial balance is balanced, it proves the accuracy of the
bookkeeping records.
FALSE 7. Adjusting entries should be made at the beginning of an accounting
period.
FALSE 8. Closing entries are made at the beginning of an accounting period.
TRUE 9. Reversing entries are done at the start of a new accounting period.
TRUE 10. A trial balance is just one of the basic accounting period.
TRUE 11. To accrue means to pay the expenses when these become due.
TRUE 12. A fiscal year always start in January.
TRUE 13. The nominal accounts are extended to the SCI columns of the worksheet.
FALSE 14. All asset accounts are nominal accounts.
TRUE 15. Only real accounts are extended to the SFP columns of the worksheets.

ACTIVITY 2: Prepare a worksheet. (Please refer your answer on the example of worksheet on page 24 of
this module)

Below are the accounts of Universe Consulting Services prior to the December 31, 200X, year-end
adjustments:

Revenues P17, 500 Unearned revenue P4, 000

Office Equipment 10, 000 Accounts Payable 3, 500
Universe, Capital 7, 000 Accounts receivable 3, 000
Salary Expense 6, 500 Universe, Drawing 2, 500
Office Supplies 6, 000 Cash 2, 000
Accumulated Depreciation 5, 000 Rent Expense 1, 500
Prepaid Insurance 4, 500 Miscellaneous Expense 1, 000
The following data are available for the December 31, 200X, year-end adjustments:

 Accrued Salaries. P2, 500

 Depreciation, P 2, 000
 Expired Insurance, P1, 500
  Unearned revenue earned during the year, P1, 000
 Office supplies on hand, P500

ANSWER:

Revenues P17, 500 Unearned revenue P4, 000

Office Equipment 10, 000 Accounts Payable 3, 500
Universe, Capital 7, 000 Accounts receivable 3, 000
Salary Expense 6, 500 Universe, Drawing 2, 500
Office Supplies 6, 500 Cash 2, 000
Accumulated Depreciation 7, 000 Rent Expense 1, 500
Prepaid Insurance 3,000 Miscellaneous Expense 1, 000
Accrued Salaries P2, 500