CBLM Package - Rev 2

COMPETENCY-BASED LEARNING MATERIAL
Sector: Qualification:
HEALTH, SOCIAL AND

OTHER COMMUNITY
DEVELOPMENT SERVICES BOOKKEEPING
NCIII
Unit of Competency:
JOURNALIZE RVFS
TRANSACTION Bookkeeping
Services
Module Title:
JOURNALIZING TRANSACTIONS FOR SINGLE

PROPRIETORSHIP
Competency-based Date Developed: Document No.

Nov. 16,2020
Learning material for Issued by:
BOOKKEEPING NCIII Date Revised:
Developed by: I
Module Title: Journalizing
Transactions for Single ROY VICTOR F.
Revision # 000
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Proprietorship
TABLE OF CONTENTS
Cover page ……………………..…………………………………...………………..…… I
Table of Contents …………………….…………………………………………….……. II
How to use Module ………………………………………………………………………III
Qualification Title ……………………………………………………………………..…IV
Module Content ………………………………………………………………………….VI
Learning Outcome ………………………………………………………………………VII
Learning Experience …………………………………………………………………..VIII
Information sheet 1.1 – 1: Definition of functions of accounting and
bookkeeping …………………………………………………………..………….. 1
Self-check 1.1 – 1 …………………………………………………………………4
Information sheet 1.1 – 2: Types of Business organization …….............6
Self-check 1.1 – 2 …………………………………………………………………9
Information sheet 1.1 – 3: Types of Business Activities …………..........11
Self-check 1.1 – 3 ………………………………………………………………..13
Information sheet 1.1 – 4: Basic Accounting Equation ……………….…15
Self-check 1.1 – 4 ………………………………………………………………..27
Information sheet 1.1 – 5: Basic Financial Statement …………………..30
Self-check 1.1 – 5 ………………………………………………………………..37
Operation sheet 1: Turning on Desktop Computer ………………………………39
Task sheet 1: Identify the affected elements of financial statements …………41
Job sheet 1: Completing financial transaction Worksheet ……………………..45

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HOW TO USE THIS MODULE
Welcome to the module in Journalizing Transactions for Single

Proprietorship. This module contains training materials and activities for
you to complete.
The unit of competency Journalize Transaction for Single Proprietorship”

covers the knowledge, skills, and attitudes required to complete so as to
qualify you in the National Certification in Bookkeeping NC III.
You are required to go through a series of learning activities in order to

complete each learning outcome of the module. Each of the learning outcomes
is provided with Information Sheets. Follow these activities on your own and
answer the self-check at the end of each learning outcome. You may remove
a blank answer sheet at the end of each module (or get the answer sheets
from the facilitator) to write the answers for each self-check. If you have
questions, don’t hesitate to ask your facilitator for assistance.

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BOOKKEEPING NCIII
LIST OF COMPETENCIES
No. Unit of Competency Module Title Code

BASIC COMPETENCIES
Lead workplace Leading workplace
1 500311109
communication communication
2 Lead small team Leading small team 500031110
Developing and
Develop and practice
3 practicing negotiation 500311111
negotiation skills
skills
Identifying/Determining
Solve problems related to
4 fundamental cause of 500311112
work activities
problem
Using mathematical
Use mathematical concepts
5 concepts and 500311113
and techniques
techniques
Using relevant
6 Use relevant technologies 500311114
technologies
COMMON COMPETENCIES
Applying quality
1 Apply quality standards HCS315202
standards
Perform computer Performing computer
2 HCS311201
operations operations
Maintain an effective
Maintaining client
3 relationship with clients HCS913201
relationship
and customers
Managing own
4 Manage own performance HCS913202
performance
CORE COMPETENCIES

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No. Unit of Competency Module Title Code
Journalizing
Transactions for
Single Proprietorship
Journalizing
1 Journalize transactions Transaction for HCS412301
Partnership
Journalizing
Transaction for
Corporation
2 Post transactions Posting Transactions HCS412302
3 Prepare trial balance Preparing Trial Balance HCS412303
Preparing Financial
Reports for Single
Proprietorship
4 Prepare financial reports Preparing Financial HCS412304
Reports for Partnership
Preparing Financial
Reports for Corporation
Review internal control Reviewing Internal
5 HCS412305
system Control System

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MODULE CONTENT
UNIT OF COMPETENCY : JOURNALIZE TRANSACTION

MODULE TITLE : JOURNALIZING TRANSACTION FOR
SINGLE PROPRIETORSHIP
MODULE DESCRIPTOR : This Module Covers the Knowledge, Skills,
And Attitudes in Preparing Chart of Accounts,
Analyze Documents and Preparing Journal Entry for
Single Proprietorship.
NOMINAL DURATION : 72 Hours
PRE-REQUISITES : None
LEARNING OUTCOMES :
At the end of this module, you must be able to:
1. Prepare chart of accounts
2. Analyze documents
3. Prepare journal entry
ASSESSMENT CRITERIA SUMMARY:
1. Preparing list of asset, liability, equity, income and expense
account titles in accordance with industry practices
2. Coding chart of accounts in accordance with industry
practices
3. Gathering, Checking and Verifying documents in accordance
with verification and validation process.
4. Selecting account titles in accordance with standard
selection processes.
5. Journalizing transactions according to Generally accepted
accounting principles
6. Determining account titles to debit and credit in accordance
with chart of accounts.
7. Preparing explanation to journal entry in accordance with
the nature of transaction

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LEARNING OUTCOME SUMMARY:
LEARNING OUTCOME NO. 1 PREPARE CHART OF ACCOUNTS
CONTENTS:
1. Definition and function of Bookkeeping and Accounting

2. Types of business organization
3. Types of business activities
4. Basic Accounting Equation
5. Basic Financial Statement
ASSESSMENT CRITERIA:
1. List of asset, liability, equity, income, and expenses account titles are
prepared in accordance with Generally Accepted Accounting Principles.
2. Chart of accounts is coded according to industry practice
CONDITIONS:
The students/trainees must be provided with the following:

1. Calculator
2. Paper
3. Learning Materials
4. Pencil
5. Eraser
ASSESSMENT METHOD:
1. Written test
2. Practical/performance test
3. Interview

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LEARNING EXPERIENCES
Learning Outcome No. 1: Prepare chart of accounts
LEARNING ACTIVITIES Special Instructions

Read information sheet 1.1 – 1 on In this lesson, you need to learn that:
Definition of functions of accounting
and bookkeeping
Nature of business is determined on
Answer Self-check activity 1.1 – 1
client information
and compare your answer in answer
key 1.1 – 1
Read information sheet 1.1 – 2 on List of asset, liability, equity, income,
types of business organization and expense account titles are
prepared in accordance with
Answer self – check activity 1.1 – 2
industry practices
key 1.1-2
Read information sheet 1.1 – 3 on Accounting manual is prepared is
types of business activities prepared in accordance with
industry practice.
key 1.1 – 3.
Go through the Information Sheets
Read information sheet 1.1 – 4 on and answer the self-check activities
Basic accounting equation to ensure the knowledge you have
learned in Journalizing
and compare your answer in answer Transactions
key 1.1 – 4.
Read information sheet 1.1 – 5 on Show your output to your trainer for
Basic financial statement the feedback/evaluation.
key 1.1 – 5.

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Information sheet 1.1 – 1
DEFINITION OF FUNCTION OF ACCOUNTING AND BOOKKEEPING
Learning Objective:
After reading this information sheet, you must be able to:
1. Define accounting and bookkeeping
2. Differentiate accounting and bookkeeping
3. Understand the importance of accounting to business
4. Comprehend the basic and fundamental concepts of accounting
On a day-to-day basis, bookkeeping and accounting is present in our lives, from

paying of our bills, receiving our salary, purchase of groceries, and other monetary
transactions. As we go through this content, you will be able to understand how
accounting and bookkeeping is present in our daily lives and how it affects us.
Bookkeeping and Accounting

Bookkeeping – it is the consistent recording, storing, and retrieving of daily
financial transactions for a company, non – profit, individual and other forms of
business. Of these responsibilities, perhaps the most important is maintaining the
general ledger. In short, bookkeeping can be summed up as the recording of financial
data – a process that is largely systematic.
Accounting – it is a subjective process. At its core, accounting is a high – level
processes that takes financial information and produces financial models based on
that data. In other words, accounting takes the information from bookkeeper’s records
and uses it to reveal the bigger financial picture.
BOOKKEEPING ACCOUNTING
Recording and categorizing financial Preparing adjusting entries
transactions
Posting debits and credits Preparing financial statements
Producing and sending invoices and Completing income tax returns
receipts

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Transactions for Single ROY VICTOR F. Revision # 000
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Maintaining and balancing subsidiaries, Financial analysis, Strategy, and advice
general ledgers, and historical accounts
Completing payroll Taxation strategy and planning
Objective is recordkeeping Objective is financial forecasting
It’s clear that bookkeepers are primarily responsible for identifying, measuring,
and recording financial transactions. On the other hand, accountants are focused on
summarizing, interpreting, and communicating financial transactions. While these
roles are very different, the two are highly interconnected. Without the meticulous
records kept by bookkeepers, accountant could not produce their analytical evaluation
and interpretations. In return, bookkeepers depend on the accountants to provide them
with a clear idea of what information must be logged and the proper structure of
keeping records.
Generally Accepted Accounting Principles (GAAP)
GAAP generally represents a collection of broad concepts and detailed practices
that represent best accounting practices as it is accepted at a given time. Companies
reporting according to GAAP provides a measure of uniformity so that those auditing
or examining financial statements have a foundation from which to compare
performance to a specific period or company.
Criteria for General Acceptance of an Accounting Principle

1. Relevance - this means that a principle should result in information that is
meaningful and useful to the decision-makers.
2. Objectivity - a principle should be objective in the sense that information derived
is not influenced by any personal bias or judgment by anyone.
3. Feasibility - this pertains to the extent of the implementation of a principle
without undue cost or complexity.
Basic Principles in Accounting
1. Objectivity Principle - this states that the financial statements of any

organization should be based on factual evidence. The intention
behind this principle is that management and accountants should keep
from producing biased financial statements.

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2. Historical Cost - this is a measure of the value used in accounting wherein an
asset is recorded at its actual cost rather than what the management
thinks it is worth at the time of reporting.
3. Revenue Recognition - under accrual accounting, this a principle which states
that an entity should only record revenue when it has been earned, not
when related cash or payment is collected.
4. Expense Recognition - under accrual accounting, this states that an expense
should be recognized by the entity when has incurred it regardless of
when it has been paid.
5. Adequate Disclosure - this states that all relevant or essential information
should be included in the financial statements. It should be able to
provide needed information to different users to understand the entity’s
financial situation.
6. Materiality - this expresses that can report financial statements with information
that is significant enough to affect evaluations and decisions. It serves
as a threshold or cutoff point after which a certain financial information
becomes relevant to the decisions of the users of information.
Materiality is generally relative to an entity’s size or particular
circumstances. A million worth of assets could be material to a small
convenience store but not for a multi-national corporation.
7. Consistency Principle - this refers to the use of similar accounting methods from
period to period to achieve comparability. However, changes are
permitted if they are justified and disclosed in the financial statements.

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Self – check 1.1 – 1
TRUE OR FALSE
Instruction: Read each statement carefully, write true if the statement is correct and
false if it is incorrect.
1. Accounting is the consistent recording, storing and retrieving of
daily financial transactions.
2. Bookkeeping involves recording and categorizing financial
transactions
3. Accounting is a high – level processes that takes financial
information and produces financial models based on that data.
4. Accounting involves preparing financial statements.
5. Bookkeepers are primarily responsible for identifying, measuring,

and recording financial transactions.

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Answer key 1.1 – 1
1. False
2. True
3. True
4. True
5. True

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TYPES OF BUSINESS ORGANIZATION
Learning Objective:
1. Define different types of Business Organization
2. Differentiate each types of Business
There are different types of business operating in the Philippines or specifically

in Region 12, from small scale business to large scale business. We will know about
the ownership type of this business in this topic.
Types of Business Organization

Sole Proprietorship - owned by only one person. It is easy to set up and least
costly among all forms of ownership. The owner makes all the decisions for the
business but carries unlimited liability which means creditors of the business venture
may go after the former’s personal assets if they cannot pay them.
Partnership - owned by two or more individuals who contribute resources into
the entity with the intention of dividing the profits among themselves. Partners
generally share the risks involved in running the business as well as making decisions.
Corporation - a business organized under operation of law and has a separate
legal entity from its owners. Ownership in a corporation is usually represented by
shares of stock and are called shareholders. Shareholders usually have limited liability
but may have little influence in making business decisions.
Differences
SOLE
BASIS PARTNERSHIP CORPORATION
PROPRIETORSHIP
Minimum legal Registration is Registration is
Formation formalities, easiest optional, easy compulsory,
formation formation lengthy and

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SOLE
PROPRIETORSHIP
expensive
formation process
Members Single owner 2 or More 5 or More
Capital Large financial
Limited finance Limited but more
Contribution resources
Unlimited and
Liability Unlimited Limited
Joint
Partners takes Separation
Owner takes all
Control and decision, consent between
decisions, quick
Management of all partners is ownership and
decision making
needed management
Unstable, business More stable but Stable because of
Continuity and owner affected by status separate legal
regarded as one of partners status
Advantage and Disadvantage

Sole Proprietorship Partnership Corporation
ADVANTAGES
Owner receives all More expertise and Limited liability
profits managerial skills protects owners from
available losing more than they
invest
Low organizational cost Relatively low Can achieve large size
organizational costs. due to marketability of
stock (Ownership)
Income taxed as Income taxed as Receives certain tax
personal income of personal income of advantages
proprietor partners
Independence Fundraising ability is Greater access to
enhanced by more financial resources
owners allows growth
Secrecy Can attract employees
with specialized skills.

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Sole Proprietorship Partnership Corporation
Ease of Dissolution Ownership is readily
transferable.
Long life of firm (not
affected by death of
owners)
DISADVANTAGES
Owner receives all Owners have unlimited Double taxation
losses. liability; may have to because both corporate
cover debts of other, profits and dividends
less financially sound paid to owners are
partners. taxed, although the
dividends are taxed at a
reduced rate.
Owner has unlimited Dissolves or must More expensive and
liability; total wealth can reorganize when complex to form.
be taken to satisfy partner dies.
business debts.
Limited fundraising Difficult to liquidate or Subject to more
ability can inhibit terminate. government regulation.
growth.
Proprietor may have Potential for conflicts Financial reporting
limited skills and between partners. requirements make
management expertise. operations public.
Few long-range Difficult to achieve
opportunities and large – scale
benefits for employees. operations.
Lacks continuity when
owner dies.

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FILL IN THE BLANK
Instruction: Complete the table below by providing what is asked.
Differences between types of business
SOLE
PROPRIETORSHIP
Formation 1. 2. 3.
Members 4. 5. 6.
Capital
7. 8. 9.
Contribution
Liability 10. 11. 12.
Control and
13. 14. 15.
Management
Continuity 16. 17. 18.

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1. Minimum legal formalities, easiest formation
2. Registration is optional, easy formation
3. Registration is compulsory, lengthy and expensive formation process
4. Single owner
5. 2 or More
6. 5 or More
7. Limited finance
8. Limited but more
9. Large financial resources
10. Unlimited
11. Unlimited and Joint
12. Limited
13. Owner takes all decisions, quick decision making
14. Partners takes decision, consent of all partners is needed
15. Separation between ownership and management
16. Unstable, business and owner regarded as one
17. More stable but affected by status of partners
18. Stable because of separate legal status

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TYPES OF BUSINESS ACTIVITIES
Learning Objective:
1. Identify different types of Business Activities
2. Differentiate each type of Busines Activities
Do you even wonder what type of activities you company is engage, and how
it is earning? In this topic, you will be able learning deeply different type of business
activities.
Types of Business
1. Service - a business which provides products with no physical form or simply
intangible. Examples of service business are accounting firm, law firm,
or professionals and experts who offer advices, counseling, labor, and
similar products.
2. Merchandising or Trading - buying and selling of products without changing its
form. Typically, merchandising is buying tangible products at
wholesale price and selling them at retail price. Examples of this are
grocery stores, convenience stores, rice distributors, and other
resellers.
3. Manufacturing - this type of business buys products with the intention of using
them as raw materials to create or produce another product. In
manufacturing, there is transformation of the products or raw materials
purchased.
4. Raw Materials - refers to growing or extracting raw materials. This is the buying
of blocks of land and using them to provide raw materials such as
farming, mining, and oil.
5. Infrastructure - pertains to selling of the utilization of an infrastructure.
6. Financial - a type of business which accepts cash from depositors which allows
the latter to gain interest. Financial institutions use the money
deposited by clients to provide loans to borrowers and charging them
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with fees and a higher interest rate than the interest earned by the
depositors.
7. Insurance - this is the pooling of premiums paid by customers to meet the
claims of the few. Insurance companies invest the money paid by
customers to pay for the losses experienced by a few customers.
Note: There are also hybrid businesses which combine more than one type of
business. For example, a restaurant cooks ingredients in making a meal
(manufacturing), sells cold bottles of beverage (merchandising), and also attends to
customer orders and needs (service).
Activities in Business Organizations

1. Financing Activities - these involve long-term liabilities, owner’s capital or equity, and
borrowings to gain resources so businesses can produce goods and services
sold to the market. Simply put, these activities focus on how the business
raises capital and pays back its investors.
2. Investing Activities - these refer to the purchase and sale of long-term assets and other
business investments. These activities give insight into the total investment
gains and losses of a company.
3. Operating Activities - these are the functions of a business directly related to providing
goods and services to the market. These are the core business activities
such as manufacturing, distributing, marketing, and selling a product or
service. Operating activities generally provide majority of a company’s cash
flow and largely determine whether the business is profitable.

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Matching type
Instruction: Read the statement/word in column A and match it with column B, write
your answer in the space provided.
ANSWER COLUMN A COLUMN B
business which provides

1 Financing Activities A products with no physical form
or simply intangible
buying and selling of products
2 Investing Activities B
without changing its form.
this type of business buys
products with the intention of
3 Operating Activities C using them as raw materials to
create or produce another
product.
refers to growing or extracting
4 Service D
raw materials.
this is the pooling of premiums
5 Merchandising or Trading E paid by customers to meet the
claims of the few.
these refer to the purchase and
6 Manufacturing F sale of long-term assets and
other business investments.
these are the functions of a
business directly related to
7 Raw Materials G
providing goods and services to
the market.
pertains to selling of the
8 Infrastructure H
utilization of an infrastructure.

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these involve long-term
liabilities, owner’s capital or
equity, and borrowings to gain
9 Financial I
resources so businesses can
produce goods and services
sold to the market.
a type of business which
accepts cash from depositors
10 Insurance J
which allows the latter to gain
interest.

1 I 6 C
2 F 7 D
3 G 8 H
4 A 9 J
5 B 10 E

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BASIC ACCOUNTING EQUATION
Learning Objective:
1. Have knowledge of the elements of financial statements
2. Describe the account using simple T – Account title and its uses.
3. Learn comprehensively the accounting equation.
4. Understand how the double-entry system works and its application
to the accounting equation.
5. Know and familiarize debit and credit and the corresponding rules
as applied to the balance sheet and income statement accounts.
We have already discussed the overview of accounting and bookkeeping as

well as its importance in business. In this chapter, we will dig deeper as to how this
process and being done.
Stages of Data Processing
Input Process Output
The illustration above shows that a raw data (input) is processed to become a
useful accounting information (output). Each transaction entered into the accounting
system should be supported by source documents like invoices, deposit slips, checks,
and time cards and memos. These documents will serve as evidence that a certain
transaction actually transpired. It is also worthy to note that source documents must
be legitimate and verified to help users of information gain confidence in reporting the
financial information processed from it. The computer, with the use of an accounting
software processes these inputs. However, in this chapter the manual system of
journalizing, posting, preparing the trial balance, and updating the accounts will be
discussed to fully understand how a raw data becomes information.

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Elements of Financial Statement
Element Definition
Financial Position
(Balance Sheet)
a.Asset A present economic resource controlled by the
entity as a result of past events. An economic
resource is a right that has the potential to produce
economic benefits. There are three (3) aspects that
must be remembered with the definition of assets -
control, rights, potential to produce and economic
benefits.
b.Liability A present obligation of the entity to transfer an

economic resource as a result of past events. For a
liability to exist, three criteria must ALL be satisfied:
a. The entity has an obligation;
b. The obligation is to transfer an economic
resource; and
c. The obligation is a present obligation that
exists as a result of past events.
Equity is the residual interest in assets of the

c. Equity enterprise after deducting all its liabilities. These
are the claims against the entity that do not meet
the definition of a liability. It pertains to the capital of
the owner in the business.
Financial
Performance
(Income Statement)
This is an increase in assets or decrease in
a. Income
liabilities that result in an increase in equity, other
than those relating to contributions by holders of
equity claims.

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b. Expenses This is a decrease in assets or increase in liabilities
that result in a decrease in equity, other than those
relating to contributions by holders of equity claims.
The Account
Each of the element in the financial statements have separate accounts. This
serves as a summary device in accounting where a detailed record of the increases,
decreases, and balances of each element. The simplest form of the account is known
as the “T” account because it is similar to the letter “T”. The T account has three (3)
parts as shown below:
Account Title
Left side or Right side

Debit Side or Credit
Side
The Accounting Equation

In accounting, it important to note that financial statements show how the business
is performing. They are the final products of the accounting process. The most basic
tool to understand accounting is the accounting equation using the elements of the
financial position or balance sheet. The accounting equation is as shown below:
Assets = Liabilities + Equity

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Note that assets must ALWAYS be equal to liabilities and equity. Assets are on
the left side of the equation opposite to the liabilities and owner’s equity. This explains
why increases and decreases in assets are recorded in the opposite manner or what
is called the “mirror image” as liabilities and owner’s equity are recorded. It also
explains why liabilities and owner’s equity follow the same rules of debit and credit.
The logic behind debiting and crediting is actually related to the accounting
equation. Transactions may require additions to both sides, the left and right sides, or
subtractions from both sides, or an addition and subtraction on the same side but in
all cases, both sides of the equation must always be EQUAL.
The Double-Entry System

The foundation of our knowledge in accounting lies in our understanding of the
double-entry system. Accounting is based on the double-entry system which means
recording the dual effects of a business transaction. A debit (Dr.) side entry must
always have a corresponding credit (Cr.) side entry. The double-entry system is
anchored on the notion that for every business transaction, there must be one or more
accounts debited and one or more accounts credited. Just like the accounting
equation, the left or debit side must be equal to the right or credit side.
Rules of Debit and Credit
The account type determines how increases or decreases in it are recorded. The
rules of debit and credit are as follows:
Balance Sheet Accounts

a. Increases in assets are recorded as debits (left side of the account)
b. Decreases in assets are recorded as credits (right side of the account)
c. Increases in liabilities and owner’s equity are recorded as credits (right
side of the account)
d. Decreases in liabilities and owner’s equity are recorded as debits (left
side of the account)
Income Statement Accounts
a. Increases in income are recorded as credits (right side of the account)
b. Decreases in income are recorded as debits (left side of the account)
c. Increases in expenses are recorded as debits (left side of the account)
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d. Decreases in expenses are recorded as credits (right side of the account)
Note: The rules of debit and credit for income and expense accounts are based
on their relationship to the owner’s equity account. Income increases owner’s
equity while expenses decreases it. Thus, income are recorded as credits while
expenses are recorded as debits.
To further illustrate the rules of debit and credit, look at the T account shown below:
Balance Sheet Accounts
Assets Liabilities and Owner’s Equity
Debit (+) Credit (-) Debit (-) Credit (+)

Increases Decreases Decreases Increases
Normal Normal
Balance Balance
Income Statement Account

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Expenses (Debit for decreases in Income (Credit for increases in
Owner’s Equity Owner’s Equity)
Debit (+) Credit (-) Debit (-) Credit (+)

Increases Decreases Decreases Increases
Normal Normal
Balance Balance
Normal Balance of an Account
Normal balance pertains to the side of an account where the increase is recorded
- debit or credit. Asset, owner’s withdrawal, and expense accounts normally have
DEBIT balances while liability, owner’s equity, and income accounts normally have
CREDIT balances. To summarize:
Account Category Increases Normal

Balance
Dr Cr Dr Cr
Assets ✓ ✓
Liabilities ✓ ✓
Owner’s Equity:
Owner’s Capital ✓ ✓

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Capital Withdrawals ✓ ✓
Income ✓
Expenses ✓ ✓ ✓
Accounting Events and Transactions

An accounting event is an economic occurrence which causes change in an
entity’s assets, liabilities, and/or equity. Meanwhile, a transaction is a particular kind
of event that involves the transfer of something of value between two entities.
Types and Effects of Transactions

It is important to understand in the long-run a classification approach that
discusses the effects of accounting events. To summarize:
a. Source of Assets (SA) - an asset account increases and a corresponding
claims (liabilities or owner’s equity) account increases.
b. Exchange of Assets (EA) - one asset account decreases and another asset
account decreases.
c. Use of Assets (UA) - an asset account decreases and a corresponding claims
(liabilities or owner’s equity) account decreases.
d. Exchange of Claims (EC) - one claims (liabilities and owner’s equity) account
increases and another claims (liabilities and owner’s equity)
account decreases.
The four (4) types of transactions may further be expanded into nine (9) types of
effects, as follows:
a. Increase in Assets = Increase in Liabilities (SA)
b. Increase in Assets = Increase in Owner’s Equity (SA)
c. Increase in one Asset = Decrease in one Asset (EA)
d. Decrease in Asset = Decrease in Liabilities (UA)
e. Decrease in Asset = Decrease in Owner’s Equity (UA)
f. Increase in Liabilities = Decrease in Owner’s Equity (EC)

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g. Increase in Owner’s Equity = Decrease in Liabilities (EC)
h. Increase in one Liability = Decrease in one Liability (EC)
i. Increase in one Owner’s Equity = Decrease in another Owner’s Equtiy (EC)
Typical Account Titles Used
Statement of Financial Position (Balance Sheet)
Assets - classified into current and non-current
Current Assets
Per revised Philippine Accounting Standards (PAS) No. 1, an entity shall classify
assets as current when:
a. It expects to realize the asset, or intends to sell or consume it, in its normal
operating cycle;
b. It holds the asset primarily for the purpose of trading;
c. It expects to realize the asset within twelve months after the reporting
period; or
d. The asset is cash or a cash equivalent (per PAS No. 7), unless the asset is
restricted from being exchanged or used to settle liability for at least twelve
months after the reporting period.
Operating cycle is the time between the acquisition of assets for processing and
their realization in cash or cash equivalents. When an entity’s normal operating cycle
is not clearly identifiable, it is assumed to be twelve months.
Typical account titles under current assets are:

Cash - any medium of exchange that a bank will accept for deposit at face value.
Includes coins, currency, checks, money orders, bank deposits, and
drafts.

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Cash Equivalents - per PAS 7, these are short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Notes Receivable - a written pledge that the customer will pay the business entity
a fixed amount of money on a certain date
Accounts Receivable - these are claims against customers arising from sales of
goods or services on credit. Thus type of receivable has less security
compared to a promissory note.
Inventories - per PAS 2, these are assets which are: a) held for sale in the
ordinary course of business; b) in the process of production for such
sale; or c) in the form of materials or supplies to be consumed in the
production process or in rendering services.
Prepaid Expenses - these are expenses paid for by the business entity in
advance. It is an asset because the business avoids having to pay cash
in the future for a specific expense. Common examples of prepaid
expenses are insurance and rent.
Non-current Assets
All other assets that do not fall under the definition of current assets should be
classified as non-current assets (residual definition).
Property, Plant, and Equipment - per PAS 16, these are tangible assets that are
held by an enterprise for use in the production or supply of goods or
services, or for rental to others, or for administrative purposes and which
are expected to be used during more than one period.
Accumulated Depreciation - this is a contra asset account that contains the sum
of the periodic depreciated charges. This is deducted from the cost of
the related asset to obtain the net book value.
Intangible Assets - per PAS 38, these are identifiable, nonmonetary assets
without physical substance held for use in the production or supply of
goods and services, for rental to others, or for administrative purposes.
Liabilities - classified into current and non-current

Current Liabilities
Per revised PAS 1, an entity shall classify a liability as current when:
a. It expects to settle the liability in its normal operating cycle;
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b. It holds the liability primarily for the purpose of trading;
c. The liability is due to be settled within twelve months after the reporting period;
or
d. The entity does not have an unconditional right to defer settlement of the liability
for at least twelve months after the reporting period.
Typical account titles used in current liabilities are:

Accounts Payable - this account represents the reverse relationship with
accounts receivable. It pertains to the liability of the business entity to
pay goods and services purchased on credit.
Notes Payable - is similar to the note receivable but in a reverse sense. In the
case of a note payable, the entity is the maker of the note promising to
pay the other party on a certain future date.
Accrued Liabilities - these are amounts owed by the entity to others for unpaid
expenses. Common examples are salaries payable, utilities payable,
interest payable, and tax payable.
Unearned Revenues - these are advance payments by customers availing the
goods or services of an entity. Under the liability method, this account is
considered a liability since the entity has yet to render of deliver the
service or goods. It becomes income only when the goods are delivered
or the services are performed.
Current portion of Long-term Debt - this refers to the portion of mortgage notes,
bonds, and other long-term liabilities to be pain within one year from the
balance sheet date.
Non-current Liabilities
All other liabilities that do not fall under the definition of current liabilities should be
classified as non-current liabilities.
Mortgage Payable - this account records long-term debt of an entity wherein the
entity has pledged certain assets as security to the creditor. In the event
that the debt payments are not made, the creditor can go after the
mortgaged property to settle the claim.

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Bonds Payable - this is usually how business entities obtain substantial amount
of money to finance the acquisition of equipment or other assets needed
by the entity. This substantial amount of money is obtained by issuing
bonds. A contract between the issuer of bonds and the lender will specify
the terms of repayment and interest to be charged.
Owner’s Equity
Capital - this account is used to record the original and additional investments of
the owner/s of the business
Withdrawals - when the business owner/s withdraws cash or other assets from
the business, it is reflected and recorded in this account rather than
directly reducing the owner’s equity account
Income Summary - this is a temporary account used at the end of the accounting
period to close income and expenses
Statement of Financial Performance (Income Statement)
Income
Service Income - revenues earned by performing services for a customer or client

Sales - revenues earned through sale of merchandise such
Expenses
Cost of Sales - this is incurred when purchasing or producing products sold to

customers during the period; also called cost of goods sold
Salaries or Wages Expense - all payments as a result of an employer-employee
relationship such as salaries or wages, 13th month pay, cost of living
allowances, etc.
Telecommunications, Electricity, Fuel, and Water Expense - these are related
to the use of utilities to conduct operations of the business

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Rent Expense - expense for office space, warehouse, equipment, and other
asset rentals
Supplies Expense - supplies used in the conduct of daily business
Insurance Expense - portion of premiums paid during the accounting period
which has expired
Depreciation Expense - portion of the cost of a tangible asset allocated or
charged as expense during the accounting period. This is recorded to
increase the accumulated depreciation account.
Uncollectible Accounts Expense - this is an amount of receivables estimated to
be doubtful and charged as expense during the period
Interest Expense - relating to use of borrowed funds

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TRUE OR FALSE
Instruction: Read each statement carefully and write true if the statement is correct
and false if the statement is incorrect. Write your answer in the space provided
before the number.
1. An asset is one of the elements of a Statement of Financial Performance.
2. A business entity should record an asset even though its economic benefits
is highly unlikely.
3. The owner of the business should have control and right over its assets.
4. A liability is a present obligation of the entity to transfer an economic resource

as a result of past events.
5. A present obligation exists as a result of past events even if the entity has not
yet obtained economic benefits or taken an action and as a consequence, the
entity will or may have to transfer an economic resource that it would not
otherwise have had to transfer.
6. In a sole proprietorship, there is only one owner’s equity because there is only
one owner.
7. In a partnership, the owner’s equity account is as many as the partners.
8. In a corporation, stockholder’s equity consists of share capital, retained

earnings, and reserves representing appropriations of retained earnings
among others.
9. Income decreases equity and increases assets.
10. Expenses decreases assets but has no effect on liability.
11. The basic summary device of accounting is called the account.
12. The formula to solve for the liabilities is owner’s equity less current assets.

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13. The formula to solve for owner’s equity is assets less non-current liabilities.
14. In the rules of debit and credit, increases in assets are on the left or debit
side of the T-account.
15. Generally, when a business owner invests cash to their business, there is a
corresponding increase in assets and owner’s equity.
FILL – IN THE BLANKS
Instruction: Compute for the missing item, write your answer the blank space provided.
Assets Liabilities Owner’s Equity
1. 500,000 350,000 ?
2. 1,050,000 ? 785,000
3. ? 220,100 (70,520)
4. 600,000 233,500 ?
5. ? 50,000 130,000

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Answer Key 1.1 – 4
1. F 6. T 11. T
2. F 7. T 12. F
3. T 8. T 13. F
4. T 9. F 14. T
5. F 10. F 15. T
Assets Liabilities Owner’s Equity
1. 500,000 350,000 150,000.00
2. 1,050,000 265,000 785,000
3. 149,580 220,100 (70,520)
4. 600,000 233,500 366,500
5. 180,000 50,000 130,000

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BASIC FINANCIAL STATEMENT
Learning Objective:
1. Define each financial statement
2. Understand the importance of financial statements
3. Comprehend how the financial statements are interrelated.
After the end of accounting cycle, you can now prepare financial statements in
accordance with the standard. In this chapter we will be able to have an overview on
what reports are being prepared and understand the relevance of each report.
Complete Set of Financial Statements

The essence of financial statements aside from being the final product of
accounting, is to allow various financial information users to measure the performance
of the business as well as make relevant and timely decisions based on the information
obtained.
Per revised PAS No. 1, the following are what comprise a complete set of financial
statements:
a. Statement of financial position as at the end of the period;
b. Statement of financial performance for the period;
c. Statement of changes in equity for the period;
d. A statement of cash flows for the period;
e. Notes to financial statements, comprising a summary of significant accounting
policies and other explanatory information; and
f. Statement of financial position as at the beginning of the earliest comparative
period when an entity applies an accounting policy retrospectively or makes
a retrospective restatement of items in its financial statements or when it
reclassifies items in its financial statements.

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Preparing the Financial Statements
After completing the worksheet, it will be easier to prepare the financial statements
since the account balances have already been extended to the appropriate columns.
The information necessary to prepare the income statement, statement of changes in
equity, and balance sheet are available in the worksheet.
New Romantics Events will be used to illustrate this topic.
Statement of Financial Performance

There are two (2) ways to prepare the statement of financial performance of
income statement:
1. In a single statement of comprehensive income, or
2. In two statements - a statement displaying components of profit or loss
(separate income statement) and a second statement beginning with profit or
loss and displaying components of other comprehensive income (OCI)
However, the 2018 Conceptual Framework does not specify whether the
statement of financial performance include(s) a single statement or two statements.
Income statement shows the performance of the business for a period of time,
particularly its profitability which will let the users to assess potential changes or make
economic decisions.
The illustration below presents New Romantics Events statement of financial
performance.

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New Romantics Events
Income Statement
For the Month Ended January 31, 2020
Revenue
Service Revenue P 79,500
Expenses
Salaries Expense P 10,350
Supplies Expense 4,000
Rent Expense 5,000
Insurance Expense 1,600
Utilities Expense 5,750
Depreciation Expense - Service Vehicle 1,500
Depreciation Expense - Office Furniture 750
Interest Expense 4,125
Total 33,075
Profit 46,425
Statement of Changes in Equity

The statement of changes in equity shows the changes in the owner’s investment
to the business. Usually, in the case of a sole proprietorship, increases in owner’s
equity result from additional investments by the owner and profit for the period while
decreases may result from withdrawals of the owner and loss for the period. It is also
important to note that the beginning balance and additional investments can be
determined from the ledger of the business. The profit or loss figure can be determined
directly from the income statement columns while withdrawals from the balance sheet
columns in the worksheet.

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Statement of Changes in Equity
Dela Cruz, Capital, 1/1/2020 P 200,000

Add: Additional Investments by Dela Cruz P -
Profit 46,425 46,425
Total 246,425
Less: Withdrawals 16,000

Dela Cruz, Capital, 1/31/2020 230,425
Statement of Financial Position

This is also called the balance sheet and is used by decision-makers to evaluate
the business’ liquidity and solvency, financial flexibility, and ability to generate profits.
Liquidity measures how quickly the company can convert its assets to cash to settle
obligations when they are due. Financial flexibility deals with the company’s ability to
take effective actions to alter the amounts and timings of cash flows in case an
unexpected opportunity or needs arise. Solvency refers to the availability of cash to
meet long-term financial obligations of the company.
The balance sheet can be presented either the report format or account format.
The former simply lists the assets, followed by the liabilities, and owner’s equity in
vertical sequence. The latter lists the assets on the left and the liabilities and owner’s
equity on the right. Both balance sheet formats are acceptable.
PAS 1 does not also prescribe the order in which an entity presents items in the
balance sheet. What is required is the current and non-current distinction for assets
and liabilities. Liabilities and equity can be presented current liabilities then non-current
liabilities then equity, or vice versa.
When presentation based on liquidity provides accounting information that is
reliable and more relevant to decision-makers, then an entity shall present all its assets
and liabilities in order of liquidity.

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Balance Sheet
January 31, 2020
Assets
Current Assets
Cash P 162,800
Accounts Receivable 16,000
Supplies 13,000
Prepaid Rent 5,000
Prepaid Insurance 17,600
Total Current Assets P 214,400
Property and Equipment (Net)

Service Vehicle P 300,000
Accumulated Depreciation - Service Vehicle 1,500 298,500
Office Furniture 45,000
Accumulated Depreciation - Office Furniture 750 44,250 342,750
Total Assets 557,150
Liabilities
Current Liabilities
Notes Payable P 275,000
Accounts Payable 37,000
Salaries Payable 1,350
Utilities Payable 1,750
Interest Payable 4,125
Unearned Service Revenues 7,500
Total Current Liabilities P 326,725
Owner's Equity
Dela Cruz, Capital, 1/31/2020 230,425
Total Liabilities and Owner's Equity 557,150
Statement of Cash Flows

The statement of cash flows presents information about the movement of cash
during the period which includes cash receipts and cash payments of an entity. If is a
formal statement that classifies cash receipts (inflows) and cash payments (outflows)
into operating, investing, and financing activities. This also shows the net increase of
decrease in cash during a certain period and the cash balance at the end of the period.
This statement also helps in projecting the future net cash flow of the entity.
Operating Activities

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This type of activities generally involves providing services, and producing and
delivering goods. Cash flow from operating activities are generally the cash effects
of transactions and other events relevant to the determination of profit or loss
during the period. This cash flow can be presented using either direct or indirect
method.
In computing operating activities using the direct method, the entity’s net cash
is obtained by adding the individual operating cash inflows and then subtracting
the individual operating cash outflows.
The indirect method is used to compute the net cash of operating activities by
adjusting profit with income and expense items not resulting from cash
transactions. First, profit will be increased by expenses and charges that are non-
cash in nature (ex. Depreciation). Second, profit will also be decreased by
increases in current assets and decreases in current liabilities involved in
computing profit but did not actually affect the cash balance. Lastly, decreases in
current assets and increases in current liabilities are added to the profit. This will
ultimately lead to the net cash flows of operating activities.
Refer to the formula below:
Profit P xx
Adjustments:
Non-Cash Expenses (ex. Depreciation) xx
Increases in current assets (xx)
Decreases in current assets xx
Increases in current liabilities (xx)
Decreases in current liabilities xx
Cash Flows from Operating Activities xx
Investing Activities
This type of activities includes obtaining loans, disposing of investments in
debt or equity securities, and acquiring property and equipment.
Cash inflows may include receipts from sale of property and equipment,
investments in debt or equity securities, and collections on notes receivable. Cash
outflows may include payments to purchase property and equipment, debt or
equity securities, and loans generally in the form of notes receivable.
Financing Activities
Financing Activities include acquiring resources from owners and creditors.
Cash inflows may include receipts from investments by owners and issuance of
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notes payable. Cash outflows may be from payments to owners in the form of
withdrawals and settlement of notes payable.
For illustration, the New Romantics Events will be used.

Statement of Cash Flows
Cash Flows from Operating Activities:

Cash received from clients 71,000
Payments to suppliers (10,000)
Payments to employees (9,000)
Payments for office rent (10,000)
Payments for insurance (19,200)
Payments for utilities (4,000)
Net Cash Flow from Operating Activities 18,800
Cash Flows from Investing Activities:

Payments to acquire service vehicle (300,000)
Payments to acquire office furniture (15,000)
Net Cash Flow from Investing Activities (315,000)
Cash Flows from Financing Activities:

Cash from investments by owner 200,000
Cash from borrowings 275,000
Withdrawals by owner (16,000)
Net Cash Flow from Financing Activities 459,000
Net Increase (Decrease) in Cash 162,800
Cash balance, beginning -
Cash balance, ending 162,800
Note: The ending cash balance in the cash flow statement should be the same with
the amount of cash in the balance sheet.

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TRUE OR FALSE
Instruction: Write T if the statement is correct and F if it is wrong on the space

provided before the number.
1. The balance sheet is also known as the statement of financial performance.

2. Financial performance may also be referred to as income statement.
3. The statement of changes in equity shows the relationship of the income
statement to the balance sheet by presenting the owner’s capital account
changed during the accounting period.
4. The statement of changes in equity shows the withdrawal during the period.
5. Acquisition of land and building is an example of an investing activity.
6. Purchase of property is a financial activity.
7. Paying taxes to the government is a financing activity.
8. The account salaries payable appears on the income statement.
9. The account salaries expense appears on the income statement.
10. Buying and manufacturing goods are operating activities.
11. Withdrawals made during the period are investing activities.
12. The statement of cash flows presents significant events related to
operating, investing, and financing of a business.

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1. T
2. T
3. T
4. T
5. T
6. F
7. T
8. F
9. T
10. T
11. F

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Operation Sheet 1.1 – 1
Title: Turning on Desktop Computer
Performance Objective: Given one Desktop computer, you should be able to

turn it on and use it according to the manual
Supplies/Materials : Manual
Equipment : Computer Desktop
Steps/Procedure:
1. Plug AVR into electrical source and turn it on.

2. Press power button located at System Unit.
3. Press power button of the monitor.
4. Check mouse if operating properly.
5. Check keyboard if functioning by clicking numpad
or caps lock.
6. Click user and enter password if applicable.
7. Choose the application you want to work with
(Spreadsheet or word).
8. Start working on it (encode data or write letters).
9. Save your work.
10. Power off after use.
Assessment Method: Direct observation and Performance Checklist
Document No.
Competency-based Date Developed: Nov.
Learning material for 16,2020 Issued
by:
Module Title: Page 39 of 50

Journalizing Developed by:
Transactions for ROY VICTOR F. Revision #
Single Proprietorship SUMUGAT
000
Performance Checklist 1.1 - 1
CRITERIA
YES NO
Did you….
1. Plug AVR into electrical source and turn it
on.
2. Press power button located at System
Unit.
3. Press power button of the monitor.
4. Check mouse if operating properly.
5. Check keyboard if functioning by clicking
numpad or caps lock.
6. Click user and enter password if
applicable.
7. Choose the application you want to work
with (Spreadsheet or word).
8. Start working on it (encode data or write
letters).
9. Save your work.
10. Power off after use.
Document No.
Competency-based Date Developed: Nov.
Learning material for 16,2020 Issued
by:
Module Title: Page 40 of 50

Journalizing Developed by:
Transactions for ROY VICTOR F. Revision #
Single Proprietorship SUMUGAT
000
TASK SHEET 1.1 – 2
Title: IDENTIFY THE AFFECTED ELEMENTS OF FINANCIAL STATEMENT
Performance Objective: Given the table below, you should be able to identify what elements of
financial statement are affected following the Basic accounting
equation
Supplies/Materials : Paper, Pen/Pencil, Learning Materials
Equipment : None
Steps/Procedure:
1. Following the format of table provided.

2. Write +, - or +/- on the elements that the transaction will have an effect.
3. Evaluate your output based on the performance criteria checklist.
4. Present your output to your facilitator.
Assessment Method: Performance criteria, Answer key.
Competency-based Date Developed: Nov. Document No.

16,2020
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Module Title: Journalizing Page 41 of 50
Revision #
SUMUGAT
Proprietorship 000
Transactions Assets Liabilities Owner’s
Equity
1. A customer paid for services rendered last month.
2. Payment to a supplier for inventories bought on account.
3. Purchase of office supplies in cash.
4. Rendered services to customers for cash.
5. Cash invested by a business owner to a newly opened business.
6. Bought equipment on account for the business.
7. Company paid the office rent six (6) months in advance.
8. Received billing for electricity incurred during the month but

payable during the next month.
9. Received billing for advertising expense incurred during the

month and paid within the month.
10. Customer paid for services in advance.
11. Owner withdrew cash from the business for personal use.
12. Performed services but customer will pay after 30 days.
13. Paid for the equipment purchased last month.
14. Business entity received a promissory note from client after

rendering services.
15. Owner paid for the salary of employees.

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Revision #
SUMUGAT
Proprietorship 000
Performance Checklist 1.1 – 2
CRITERIA
YES NO
Did you…
1. Follow the format provided?
2. Provide the correct signs (+, -, +/-) for each transaction?
3. Have 100% accuracy based on the answer key provided?

16,2020
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Revision #
SUMUGAT
Proprietorship 000
ANSWER KEY:
Transactions* Assets Liabilities Owner’s
Equity
16. A customer paid for services rendered last month. +/-
17. Payment to a supplier for inventories bought on account. - -
18. Purchase of office supplies in cash. +/-
19. Rendered services to customers for cash. + +
20. Cash invested by a business owner to a newly opened + +

business.
21. Bought equipment on account for the business. + +
22. Company paid the office rent six (6) months in advance. +/-
23. Received billing for electricity incurred during the month but + -
payable during the next month.
24. Received billing for advertising expense incurred during the - -

month and paid within the month.
25. Customer paid for services in advance. + +
26. Owner withdrew cash from the business for personal use. - -
27. Performed services but customer will pay after 30 days. + +
28. Paid for the equipment purchased last month. - -
29. Business entity received a promissory note from client after + +

rendering services.
30. Owner paid for the salary of employees. - -

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Revision #
SUMUGAT
Proprietorship 000
JOB SHEET 1.1 – 3
Title: Completing Financial Transaction Worksheet
Performance Objective: Given the table format and instruction, you should be able to complete
the data according the generally accepted account principles
Supplies/Materials : Pencil, Eraser and Pen
Equipment : None
Steps/Procedure:
1. Analyze the effect of transaction on the accounting equation.

2. For each transaction, identify the changes in owner’s equity by placing I for Income,
E for Expense, W for Withdrawal, an INV for Investment.
3. Also compute for the balances of each account.
Assessment Method: Written Test

16,2020
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Revision #
SUMUGAT
Proprietorship 000
Assets Liabilities Owner's Equity
I, E, W,
Cash + Supplies + Land = Accounts Payable + Kim, Capital
INV
Organized the repair shop and

deposited 400,000.00 cash in (1)
bank for use by the business
Purchased 30,000.00 of supplies

(2)
on account.
Bal
Purchased land for 150,000.00,
(3)
cash
Bal.
Paid 22,000.00 to creditors (4)
Bal.
Withdrew 14,000.00 for personal
(5)
use
Bal.
paid 30,000.00 for site and

(6)
equipment rent for the month
Bal.
Competency-based Learning Date Developed: Document No.
Nov. 16,2020
material for Issued by:
Developed by:
Revision # 000
SUMUGAT
Proprietorship
Assets Liabilities Owner's Equity
I, E, W,
Cash + Supplies + Land = Accounts Payable + Kim, Capital
INV
During the month, 8,000.00 of

expenses incurred on account by (7)
the business
Bal.
Jennie Kim also invested
75,000.00 of personal funds to the (8)
business.
Bal.
Received 7,000.00 cash from

(9)
client for a service rendered.
Bal.
Jennie Kim used 4,000.00 worth of

(10)
supplies
Bal.
Competency-based Learning Date Developed: Document No.

Nov. 16,2020
material for Issued by:
Developed by:
Revision # 000
SUMUGAT
Proprietorship
Performance Checklist 1.1 – 3
CRITERIA
YES NO
Did you….
1. Complete the table in accordance with industry practice and
generally accepted accounting principles/Philippine Financial
Reporting Standards for transactions and events.
2. Determine the correct amount for each column
3. Answered with 100% accuracy

16,2020
Learning material for
Issued by:
Module Title: Developed by: Page 48 of 50
Journalizing
ROY VICTOR F.
Transactions for SUMUGAT Revision # 000
Single Proprietorship
ANSWER KEY: Assets Liabilities Owner's Equity
Cash + Supplies + Land = Accounts Payable + Kim, Capital I, E, W, INV
Organized the repair

shop and deposited
(1) 400,000.00 400,000.00 INV
400,000.00 cash in bank
for use by the business
Purchased 30,000.00 of
(2) 30,000.00 30,000.00
supplies on account.
Bal 400,000.00 30,000.00 - 30,000.00 400,000.00
Purchased land for
(3) (150,000.00) 150,000.00
150,000.00, cash
Bal. 250,000.00 30,000.00 150,000.00 30,000.00 400,000.00
Paid 22,000.00 to
(4) (22,000.00) (22,000.00)
creditors
Bal. 228,000.00 30,000.00 150,000.00 8,000.00 400,000.00
Withdrew 14,000.00 for
(5) (14,000.00) (14,000.00) W
personal use
Bal. 214,000.00 30,000.00 150,000.00 8,000.00 386,000.00
paid 30,000.00 for site
and equipment rent for (6) (30,000.00) (30,000.00) E
the month
Competency-based Learning Date Developed: Nov. 16,2020 Document No.
material for Date Revised:
BOOKKEEPING NCIII Issued by:
Module Title: Journalizing Developed by: Page 49 of 50

Transactions for Single ROY VICTOR F. SUMUGAT Revision # 000
Proprietorship
ANSWER KEY: Assets Liabilities Owner's Equity
Cash + Supplies + Land = Accounts Payable + Kim, Capital I, E, W, INV
Bal. 184,000.00 30,000.00 150,000.00 8,000.00 356,000.00

During the month,
8,000.00 of expenses
(7) 8,000.00 (8,000.00) E
incurred on account by
the business
Bal. 184,000.00 30,000.00 150,000.00 16,000.00 348,000.00
Jennie Kim also invested
75,000.00 of personal (8) 75,000.00 75,000.00 INV
funds to the business.
Bal. 259,000.00 30,000.00 150,000.00 16,000.00 423,000.00
Received 7,000.00 cash
from client for a service (9) 7,000.00 7,000.00 I
rendered.
Bal. 266,000.00 30,000.00 150,000.00 16,000.00 430,000.00
Jennie Kim used 4,000.00
(10) (4,000.00) (4,000.00) E
worth of supplies
Bal. 266,000.00 26,000.00 150,000.00 16,000.00 426,000.00
Competency-based Learning Date Developed: Nov. 16,2020 Document No.

material for Date Revised:
BOOKKEEPING NCIII Issued by:
Module Title: Journalizing Developed by: Page 50 of 50

Transactions for Single ROY VICTOR F. SUMUGAT Revision # 000
Proprietorship

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COMPETENCY-BASED LEARNING MATERIAL

HEALTH, SOCIAL AND

JOURNALIZING TRANSACTIONS FOR SINGLE

Competency-based Date Developed: Document No.

Competency-based Date Developed: Document No.

Welcome to the module in Journalizing Transactions for Single

The unit of competency Journalize Transaction for Single Proprietorship”

You are required to go through a series of learning activities in order to

Competency-based Date Developed: Document No.

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No. Unit of Competency Module Title Code

Competency-based Date Developed: Document No.

Competency-based Date Developed: Document No.

UNIT OF COMPETENCY : JOURNALIZE TRANSACTION

Competency-based Date Developed: Document No.

1. Definition and function of Bookkeeping and Accounting

The students/trainees must be provided with the following:

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LEARNING ACTIVITIES Special Instructions

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On a day-to-day basis, bookkeeping and accounting is present in our lives, from

Bookkeeping and Accounting

Competency-based Date Developed: Document No.

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Criteria for General Acceptance of an Accounting Principle

Basic Principles in Accounting

1. Objectivity Principle - this states that the financial statements of any

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4. Accounting involves preparing financial statements.

5. Bookkeepers are primarily responsible for identifying, measuring,

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There are different types of business operating in the Philippines or specifically

Types of Business Organization

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Advantage and Disadvantage

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Liability 10. 11. 12.

Continuity 16. 17. 18.

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Competency-based Date Developed: Document No.

Activities in Business Organizations

Competency-based Date Developed: Document No.

ANSWER COLUMN A COLUMN B

business which provides

Competency-based Date Developed: Document No.

Answer key 1.1 – 3

Competency-based Date Developed: Document No.

We have already discussed the overview of accounting and bookkeeping as

Stages of Data Processing

Input Process Output