Concept

Lesson 06: Business Transactions &

their Analysis as Applied to the
Accounting Cycle of a Service
Business
Fundamentals of Accountancy, Lesson Objective
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis
100% of the students are expected to achieve at least
➢ Lesson Objective 75% proficiency
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion ❑ Describe the nature and gives examples of business
➢ Recap transactions
➢ Check up Test
❑ Identify the different types of business documents
❑ Analyze common business transactions using the rules of
debit and credit
Fundamentals of Accountancy, Introduction
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis
The module is aimed at citing specific examples in which
accounting is used in making business decisions. The motivation
➢ Lesson Objective behind this effort are the examples of service businesses
➢ Lesson Introduction
➢ Video Clip wherein they provides intangible goods or services to
➢ Lesson Discussion customers. It usually generates profit by charging for labor or
➢ Recap
➢ Check up Test
other services rendered to customers.

Meaningful activities are given in the form of worksheets,

assignments and online or virtual activities which allow learners
to work at their own pace. As you go along, you will know the
accounting cycle for service business.
Fundamentals of Accountancy, Video Clip
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test

https://youtu.be/OfJZCH4zPiY
Fundamentals of Accountancy, Video Clip
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test

https://youtu.be/Mv-3AJSGGYE
Fundamentals of Accountancy, Video Clip
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test

https://youtu.be/8lU6ElW9KVo
Fundamentals of Accountancy, Video Clip
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test

https://youtu.be/54XrEzZXbPA
Fundamentals of Accountancy, Video Clip
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test

https://youtu.be/QiduH4KZ1io
Fundamentals of Accountancy, Video Clip
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test

https://youtu.be/f_De0uz1hvk
Fundamentals of Accountancy, Video Clip
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test

https://youtu.be/CptwTzDF_bM
Fundamentals of Accountancy, Discussion
Business & Management1
Grade 11-ABM
Business Transactions & Their What is a JOURNAL?
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
A journal is a chronological record of events and business
transactions showing all the effects of each transaction in terms
of debit and credits. Because transactions are initially recorded
in the journal, it is called the book of original entry. The simplest
journal is the general journal.
Fundamentals of Accountancy,
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Discussion
A journal entry should contain the following:
1. Date. Write the month on the first transaction unless there is a
change in month for the succeeding transactions or a new page is
used.
2. Account titles and explanations. Write the debit account on the
extreme left of the first line and indent the credit account half-
inch on the next line. The explanation describing the transaction
is written on the extreme left of the next line below the credit.
3. P.R. (Posting Reference). Write the corresponding account number
here once the entry is posted. However, it is left blank until the
posting has been done.
4. Debit. Under this column, write the debit amount for each debit
account.
5. Credit. Under this column, write the credit amount for each credit
account.
Fundamentals of Accountancy, Discussion
Business & Management1
Grade 11-ABM
Business Transactions & Their Presume that Gisel Ong established Anime World Gallery with an
Analysis
initial investment of P300,00 on May 2,2018. The journal entry is
➢ Lesson Objective shown on the next page.
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Discussion
Business & Management1
Grade 11-ABM
Business Transactions & Their The Simple and Compound Entry
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
When only two accounts are affected, you call this a simple entry
where there is only one
debit account and one credit account. The previous example
where the owner, Gisel Ong, made an initial investment is a
simple entry. In some cases, a transaction would require the use
of three or more accounts, in which case the entry is called a
compound entry.
Fundamentals of Accountancy, Discussion
Business & Management1
Grade 11-ABM
Business Transactions & Their Journalizing the Transactions
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Journalizing is the process of recording a transaction in a journal after it has
been recognized and measured.
In journalizing transactions, the double-entry system is used. In this case, two
or more accounts are affected by each transaction. It follows that for every
debit, a corresponding credit is made. The total debits should equal total credits
for every transaction. In this way, the quality of the accounting equation is
maintained.
Fundamentals of Accountancy, Discussion
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy,
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Discussion
THE ANALYSIS OF A TRANSACTION
Following are the steps involve in analyzing transaction:
1. From the business document, determine the kind of transaction or exchange
made.
2. Analyze the transaction to determine the accounts affected. They can either
affect the assets, liabilities, owner’s equity, revenue, or expenses accounts.
3. Determine the effect of the transaction on the accounts affected. The
transaction can either increase of decrease the accounts.
4. Apply the rules of debited and credited to show the corresponding increase or
decrease.
The example is given on the activity 2 exercises.
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis
Summary

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy,
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Recap
Activity 2. Write the analysis, rules and journal entry of the
business transaction illustrated below.
The following are transactions for Anime World Gallery for the
month of May. They will be recorded using the double-entry
system. To analyze each transaction the following shall be used to
show the effect on the accounts as follows: A (for Asset), L (for
liability), or OE (Owner’s Equity). The effect on owner’s equity is
sub classified as follows: OE:R (Revenue) and OE:E (expenses).
Fundamentals of Accountancy,
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis
➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Recap
May 2 Gisel Ong loves to watch anime. She draws posters of
colorful anime characters. Sometimes she displays them in her
office. To her surprise , many anime fans buy her drawings and
paintings and place special orders for Anime characters of their
choice. Thus, Gisel decided to open Anime World Gallery. Gisel
invested P300,000 in this initial endeavor.
➢ Analysis Assets increased. Owner’s equity increased.
➢ Rules Debit increases in assets. Credit increases in
owner’s equity.
➢ Entry Increase in assets is recorded by a debit to cash.
Increase in owner’s equity is recorded by a credit to Ong,
Capital.
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Recap
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy, Check up Test
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
Fundamentals of Accountancy Check up Test
Business & Management1
Grade 11-ABM
Business Transactions & Their
Analysis

➢ Lesson Objective
➢ Lesson Introduction
➢ Video Clip
➢ Lesson Discussion
➢ Recap
➢ Check up Test
 Concept
Lesson 06: Business Transactions and their Analysis
as Applied to the Accounting Cycle of a Service
Business

THE END