SERVICE BUSINESS

▰ provides a needed service for a fee.

▰ no physical product sold to clients.

THE ACCOUNTING CYCLE

JOURNAL
TRANSACTIONS T-ACCOUNTS TRIAL BALANCE
ENTRIES

ADJUSTING
CLOSING THE FINANCIAL
JOURNAL WORKSHEET
BOOKS STATEMENTS
ENTRIES
JOURNALIZING

1. Label the parts of the general journal.

2. Record the date of the transaction.
3. Record the debit account followed by the
amount debited.
4. Record the credit account followed by the
amount credited.
5. Write a brief explanation about the transaction.
RULES OF DEBIT AND CREDIT
 EXAMPLE

August 1 – Mr. + Cash

Ran invested
P250,000 cash to
start the business. + Mr. Ran, Capital
DATE PARTICULARS P/R DEBIT CREDIT
2019
Aug. 1 Cash P250,000
Mr. Ran, Capital P250,000
Owner’s initial investment
EXAMPLE

August 1 – Mr. Ran invested P250,000

cash to start the business.
3 – Purchased delivery truck
P80,000 in cash.
 DATE PARTICULARS P/R DEBIT CREDIT
2019
Aug. 1 Cash P250,000

Mr. Ran, Capitail P250,000

Owner’s initial investment

3 PPE 80,000

Cash 80,000

Bought delivery truck in cash

 EXAMPLE

August 8 – Purchased computer unit on

account, P25,000.
DATE PARTICULARS P/R DEBIT CREDIT
2019
Aug. 8 PPE P25,000

Accounts Payable P25,000

Bought computer on account

 EXAMPLE
August 11 – Received cash P10,000 for
delivery services rendered to
customer.
DATE PARTICULARS P/R DEBIT CREDIT
2019
Aug. 11 Cash P10,000

Service Revenue P10,000

Rendered service in cash

 EXAMPLE
August 15 – Borrowed P10,000 from a
friend signing a promissory
note.
DATE PARTICULARS P/R DEBIT CREDIT
2019
Aug. 15 Cash P10,000

Notes Payable P10,000

Borrowed cash from a friend

 EXAMPLE

August 22 – Paid creditors on account of

August 8 account, P5,000.
DATE PARTICULARS P/R DEBIT CREDIT
2019
Aug. 22 Accounts Payable P5,000

Cash P5,000

Payment of debt
 EXAMPLE

August 25 – Paid half of the notes payable.

DATE PARTICULARS P/R DEBIT CREDIT

2019
Aug. 25 Notes Payable P5,000

Cash P5,000

Payment of debt
 EXAMPLE

August 30 – The owner withdrew cash for

his personal use, P3,000.
DATE PARTICULARS P/R DEBIT CREDIT
2019
Aug. 30 Mr. Ran, Drawing P3,000

Cash P3,000

Owner’s withdrawal in cash