Fundamentals of Accounting, Business and Management

College of Business and Accountancy

 Fundamentals of Accounting, Business and
Management
TABLE OF CONTENTS
CHAPTER 1: BASIC CONCEPT OF E-COMMERCE AND INTERNET MARKETING
● Lesson Objectives
● Content
● Activity
CHAPTER 2: BRANCHES OF ACCOUNTING
● Lesson Objectives
● Content
● Activity
CHAPTER 3: USERS OF INFORMATION, TYPES AND FORMS OF BUSINESS
Lesson Objectives
● Content
● Activity
CHAPTER 4: ACCOUNTING CONCEPTS AND PRINCIPLES, IFRS FRAMEWORK
● Lesson Objectives
● Content
● Activity
CHAPTER 5: THE ACCOUNTING EQUATION AND THE DOUBLE ENTRY SYSTEM
● Lesson Objectives
● Content
● Activity
CHAPTER 6: THE SIMPLE T-ACCOUNT
● Lesson Objectives
● Content
● Activity
CHAPTER 7: RECORDING BUSINESS TRANSACTIONS
● Lesson Objectives
● Content
● Activity
CHAPTER 8: WORKSHEET, FINANCIAL STATEMENTS
● Lesson Objectives
● Content
● Activity
CHAPTER 9: ADJUSTMENT ARE JOURNALIZED AND POSTED
● Lesson Objectives
● Content
● Activity
CHAPTER 10: MERCHANDISING OPERATIONS
● Lesson Objectives
● Content
● Activity
 Fundamentals of Accounting, Business and
Management

CHAPTER 1: ACCOUNTING AND ITS ENVIRONMENT

OBJECTIVES
Evaluate the given scenario using the Accounting Policies

Accounting

Accounting is a service activity. Its function is to provide quantitative information,

primarily financial in nature, about economic entities that is intended to be useful in making
economic decisions. The accounting function is part of the broader business system, and does not
operate in isolation. It handles the financial operations of the business but also provides
information and advice to other departments.

Let us now discuss the function of accounting in business.

SCENARIO:

Mr. Juan is a retired government employee who is good at baking. One day he decides to put up a bake
 Fundamentals of Accounting, Business and
Management

As a business student answer the following questions:

• Is my business earning? (profitability)

• How much daily or monthly sales do I need in order to recover my fixed cost? (break-
even)

• Do I need to hire additional workers to help me with my production?

• Can I afford to set up a new store in another place? Where do I get the funds?

• Can I afford to pay a bank loan?

Prepare a reflection paper about the different functions of Accounting.

 Fundamentals of Accounting, Business and
Management

CHAPTER 2- BRANCHES OF ACCOUNTING

OBJECTIVES
Differentiate the branches of accounting.

Branches of Accounting

Conduct a research and compile at least two transactions in line with each Accounting Branches
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 Fundamentals of Accounting, Business and
Management

Prepare a Venn Diagram that is composed of similarities and differences of each

BRANCHES OF ACCOUNTING.
 Fundamentals of Accounting, Business and
Management

CHAPTER 3: USERS OF INFORMATION, TYPES AND FORMS OF BUSINESS

OBJECTIVES
Create a distinct distinction between the users of Accounting Information
Classify the different types of Business Organization

FORMS OF BUSINESS

Sole Proprietorship
The simplest and most popular form of business. We can call it an unincorporated company. In this, an individua

Partnership
It is a business owned by two or more people.A partnership could be general and limited. In a general partnership

Corporation
A separate entity in the eyes of the law, i.e., separate from the owners. It also means that the income of the corpo
 Fundamentals of Accounting, Business and
Management

6 2

5 3

4
 Fundamentals of Accounting, Business and
Management
CHAPTER 4: ACCOUNTING CONCEPTS AND PRINCIPLES

OBJECTIVES
Expound the fundamental of accounting concepts and principles
State the purpose of conceptual framework

The Accounting Concepts and Principle

GOING CONCERN PRINCIPLE TIME PERIOD PRINCIPLE OBJECTIVITY PRINCIPLE COST PRINC
ACCRUAL ACCOUNTING PRINCIPLE MATCHING PRINCIPLE DISCLOSURE PRINCIPLE CONSE

Direction: Enlist all the Accounting Standards that is being used in the Philippines.
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 Fundamentals of Accounting, Business and
Management

Directions: Create a RESEARCH PAPER that consist of all the organization and people who
are involved in preparing the Philippine Accounting Standards. As well as the people behind the
Generally Accepted Accounting Principles.
 Fundamentals of Accounting, Business and
Management
CHAPTER 5: THE ACCOUNTING EQUATION AND THE DOUBLE

OBJECTIVES
Compute the Basic Accounting Equation

ACCOUNTING EQUATION

Direction: Create a table of Effects on your Asset, Liability, and Owner's Equity with its
corresponding amount
1. The owner invested cash of PHP150,000 or the business earned PHP150,000 cash from
providing services.
2. Purchased equipment at PHP20,000 for cash.
3. The owner withdrew cash of PHP112,500 or the business incurred PHP112,500
expenses and paid in cash.
4. The company purchased supplies on account.
5. The owner withdrew cash of PHP15,000 or the business incurred PHP15,000 expenses and
paid in cash.
6. Paid liabilities worth PHP53,000.
7. The owner withdrew supplies worth PHP8,000 or the business used supplies worth
PHP8,000.
Fundamentals of Accounting, Business and
Management
 Fundamentals of Accounting, Business and
Management

Directions: JULY 1, 2022

ae delivery
a Chart service on Julyon
of Accounts 1, your
2022.Asset,
The following transactions
Liability, occurred
and Owner's during the month of July. He invested PHP 800,000 cash and Cars am
Equity JULY 2, 2022
Reyes borrowed PHP100,000
cash from PNB for use in his business.

JULY 15, 2022

Various equipment was purchased on account from Fortune for PHP55,000
JULY 20, 2022 JULY 18, 2022
Reyes made a cash withdrawal of PHP5,000 for personal use.
The account due to Fortune was paid in cash.

JULY 7, 2022
Bought tables and chairs from Oro can and paid PHP45,000
 Fundamentals of Accounting, Business and
Management
CHAPTER 6: THE SIMPLE T-ACCOUNT

OBJECTIVES
Analyze the account (the Simple T-account) and its uses.
Apply debit and credit method.
Prepare a journal entry and a simple T-Accounts

THE T-ACCOUNTS
 Fundamentals of Accounting, Business and
Management

Mr. Laban Dyer opened his laundry business in Iloilo City on January 2, 2022. The following
transactions occurred during the month of January 2022:
 Fundamentals of Accounting, Business and
Management

CHAPTER 7: RECORDING BUSINESS

OBJECTIVES
Analyze and explain in brief the sequential steps in the accounting cycle.
Apply the revenue and expense recognition principles.

ACCOUNTING CYCLE

Step 1: Identification of events to be recorded. Step 2:

Transaction are recorded in the journal. Step 3: Journal
Entries are Posted to the Ledger Step 4: Preparation of
Trial Balance
Step 5: Preparation of the Worksheet including adjusting entries. Step 6:
Preparation of the financial statements
Step 7: adjusting journal entries are journalized and posted. Step 8:
closing journal entries are journalized and posted.
Step 9: Preparation of a post-closing trial balance
Step 10: Reversing Journal Entries are Journalized and posted.
 Fundamentals of Accounting, Business and
Management

Directions: Prepare the following: Journal Entry, T– Accounts and Trial Balance

Refer on the sample format attached:

Fundamentals of Accounting, Business and
Management
 Fundamentals of Accounting, Business and
Management
CHAPTER 8: WORKSHEET FINANCIAL

OBJECTIVES
Prepare accurately and in good form ten-column worksheet.

The Accounting Worksheet

This worksheet is simply about plotting the items in the unadjusted trial balance on the
worksheet. In a manual accounting system, a worksheet is a large columnar sheet of paper
specifically designed to conveniently arrange all the accounting information required at the end
of a period. The body of the worksheet contains five pairs of money columns. A sample of a
worksheet is shown below.
 Fundamentals of Accounting, Business and
Management

Prepare a 10 column WORKSHEET

For transaction references, refer to your ACTIVITY 7.
IT'S TIME FOR COMPUTATION

LET'S COMPUTE
MORE
Be guided with This activity is related to
the Accounting Activity 8.1
Standards

Prepare the following:

- Income Statement
- Statement of Financial
Position
 Fundamentals of Accounting, Business and
Management
CHAPTER 9: ADJUSTMENT ARE JOURNALIZED AND POSTED

OBJECTIVES
Prepare accurately and in good form a ten-column worksheet.
Understand and appreciate the usefulness of financial statements.
Develop skills in the preparation of financial statements.

Adjusting Entries and Closing Entries

ADJUSTMENT ARE JOURNALIZED AND POSTED

The adjustment process is a key element of accrual basis accounting.

CLOSING ENTRIES ARE JOURNALIZED AND POSTED

The income, expense, withdrawal (equity) accounts are called temporary accounts or nominal
accounts. They are called temporary because they accumulate the transactions of only one
accounting period. At the end of this accounting period, the changes in owner’s equity
accumulated in these temporary accounts are transferred into the owner’s capital account.

Compute the depreciation expense for the following independent cases. Use the straight-line method of depreciat
 Fundamentals of Accounting, Business and
Management

For each of the following items, write the journal entry first (if one is needed) to
record the transactions; and then the adjusting entry, if any is required, for the end
of the accounting year of Ron Car Rental Company on December 31, 2022. On
December 1, borrowed PHP300,000 cash from Nation Bank by issuing a
promissory note with an interest of 12% per annum payable in three months.
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On December 1, paid rental for six months beginning December 1, 2016 to May 31,
2023, at PHP3,000 per month
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On December 31, 2022, received telephone bills for the month December
amounting to PHP5,600. The bill will be paid on January 2023
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On December 31, 2016, received telephone bills for the month December amounting to PHP5,600. The
bill will be paid on January 2017
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 Fundamentals of Accounting, Business and
Management
CHAPTER 10: MERCHANDISING OPERATIONS

OBJECTIVES
Create a general journal. General ledger, Unadjusted Trial Balance, and an Income Statement

Merchandising
Merchandise (or merchandise inventory) refers to goods that are held for sale to customers in the
normal course of business. This includes goods held for resale.

JOURNALIZING THE TRANSACTIONS IN A MERCHANDISING BUSINESS

STEP 1: Transactions are identified and measured.

STEP 2: The Preparation of Journal Entries (Normalization)

A company had the following transactions during December:

• Sold merchandise on credit for PHP5,000, terms 3/10, n/30. The items sold had a cost of
PHP3,500.
• Purchased merchandise for cash, PHP72
• Purchased merchandise on credit for PHP2,600, terms 1/20, n/30.
• Issued a credit memorandum for PHP300 to a customer who returned merchandise
purchased on November 29. The returned items had a cost of PHP210.
• Received payment for merchandise sold on December 1.
• Received a credit memorandum for the return of faulty merchandise purchased on
December 4 for PHP600.
• Paid freight charges of PHP200 for merchandise ordered last month (FOB shipping point).
• Paid for the merchandise purchased on December 4, less the portion that was returned.
• Sold merchandise on credit for PHP7,000, terms 2/10, n/30. The items had a cost of
PHP4,900.
• Received payment for merchandise sold on December 24.

Required:
Prepare the general journal entries to record these transactions using a perpetual inventory
system. (Record all purchases initially at the gross invoice amount)