FUNDAMENTALS OF

ACCOUNTANCY,
BUSINESS AND
MANAGEMENT

Ross Kenneth Pontemayor

z
Rules of Debits and Credits

Debit Credit

Asset
+ -
Liabilities
- +
Capital
- +
Drawings + -
Revenue
- +
Expense + -
 Debit Credit
April 2. Lopez invested P210,000 from her personal savings in the new business. A + -
She deposited the money at BPI-Greenfield.
L - +
April 5. Office supplies are acquired on cash basis, P4,500. C - +
April 9. Office equipment costing P75,000 is acquired on account, but she made a D + -
downpayment of P10,000. R - +
GENERAL JOURNAL Page: _________
1 E + -

DATE DESCRIPTION REF. DEBIT CREDIT M. L opez Dance Studio

Chart of Accounts
2020
Apr. 2 Cash ₱ 210,000.00 Account No. Account Title
Lopez, Capital ₱ 210,000.00 101 Cash
102 Accounts Receivable
Cash investment of Lopez 103 Office Equipment
104 Office Supplies
5 Office Supplies 4,500.00 201 Accounts Payable
Cash 4,500.00 301 Lopez, Capital
Purchase of office supplies on cash 302 Lopez, Drawings
401 Service Revenue
501 Cost of Sales
9 Office Equipment 75,000.00
601 Salaries & Wages Expense
Cash 10,000.00 602 Advertising Expense
Accounts Payable 65,000.00 603 Utilities Expense
Purchase of office equipment on account
 Debit Credit
April 11. M. Lopez Dance Studio collected P21,000 in cash for dance lesson rendered. A + -
April 17 Lopez rendered dance lessons to various dance clubs. She billed them P63,000. L - +
April 19. Lopez settled her balance of P65,000 for her April 9 purchase of equipment. C - +
GENERAL JOURNAL Page: _________ D + -
April 20. A check in the amount of P30,000 is received from a dance club for their R - +
DATE
lessons, billed onDESCRIPTION
April 17. REF. DEBIT CREDIT
+ -
E
11 Cash 21,000.00
Service Revenue 21,000.00
M. L opez Dance Studio
Collection of payment for service rendered Chart of Accounts

Account No. Account Title

17 Accounts Receivable 63,000.00 101 Cash
Service Revenue 63,000.00 102 Accounts Receivable
103 Office Equipment
Receivable from service rendered 104 Office Supplies
201 Accounts Payable
19 Accounts Payable 65,000.00 301 Lopez, Capital
302 Lopez, Drawings
Cash 65,000.00 401 Service Revenue
Settle payment of office equipment acquired in April 9 501 Cost of Sales
601 Salaries & Wages Expense
602 Advertising Expense
20 Cash 30,000.00 603 Utilities Expense
Accounts Receivable 30,000.00
Partial payment for service rendered, April 17
 April 21. Lopez withdrew P12,000 from the business for her personal use. Debit Credit
A + -
April 26 The Flexi Advertising Agency submitted a bill to Lopez for P6,000 worth of
advertising for this month of operation. Lopez will pay this bill next month. L - +
C - +
April 27. Lopez paid Meralco for utilities for the month, P8,200.
D + -
April 28. Marla Lopez paid her dance instructors salaries for the month, worth P22,000.
R - +
GENERAL JOURNAL 2
Page: _________
E + -
DATE DESCRIPTION REF. DEBIT CREDIT M. L opez Dance Studio
2020 Chart of Accounts
Apr 21 Lopez, Drawings 12,000
Account No. Account Title
Cash 12,000 101 Cash
Withdrawal of M. Lopez 102 Accounts Receivable
103 Office Equipment
26 Advertising Expense 6,000 104 Office Supplies
201 Accounts Payable
Accounts Payable 6,000
301 Lopez, Capital
Billing received for Advertising
302 Lopez, Drawings
401 Service Revenue
27 Utilities Expense 8,200 501 Cost of Sales
Cash 8,200 601 Salaries & Wages Expense
Payment of electricity for the month of April 602 Advertising Expense
603 Utilities Expense

28 Cash 22,000
Accounts Receivable 22,000
Payment of April salaries to dance instructors
 Standard Form

Running balance Form

GENERAL LEDGER
The general ledger is a grouping of all
accounts used in the preparation of
financial statements. It summarizes all
the activities that have taken place as
recorded.
Ledger Parts:
Ledger Parts:
Account portion refers to the
account title for example: cash,
accounts receivable.
Ledger Parts:
Account number is an assigned
number for each account title to
facilitate ease in recording and
cross-referencing.
Sample Chart of Accounts:
Ledger Parts:
Date column identifies when the
transaction happened.
Description
Ledger Parts:
Description represents the source
journal and the nature of the
transactions
Ledger Parts:
Reference identifies the page
number of the general or special
journal from which the information
was taken.
Ledger Parts:
Debit and Credit columns are used in
recording the amount of transactions
from the general journal.
Ledger Parts:
Balance Column represents the
running balance of the Account after
considering the debit and credit
amounts.
STEPS IN POSTING FROM JOURNAL TO LEDGER
1. Put account title and account number
2. Write date in column of ledger
3. Write description/details of the transaction

4. Write Journal Page Number in Reference Column of Ledger

5. Write debit or credit amount in general ledger

6. Compute for the running balance.

7. Write ledger account number in the post reference of the general journal
 M. L opez Dance Studio
Chart of Accounts

Account No. Account Title

101 101 Cash
301 102 Accounts Receivable
103 Office Equipment
104 Office Supplies
104 201 Accounts Payable
101 301 Lopez, Capital
302 Lopez, Drawings
401 Service Revenue
501 Cost of Sales
601 Salaries & Wages Expense
602 Advertising Expense
603 Utilities Expense

GENERAL LEDGER
GENERAL LEDGER
Account: Lopez, Capital Account No.: 301
Account: Cash Account No.: 101
Date Item Ref Debit Credit Balance
Date Item Ref Debit Credit Balance 2020
2020 Apr 2 Cash investment of Lopez J1 210,000.00 210,000.00
Apr 2 Cas h inves tment of Lopez J1 210,000.00 210,000.00
Apr 5 Purchas e of office s upplies on cas h J1 4,500.00 205,500.00
Apr 9 J1 with downpayment
Purchas e of office equipment on account, 10,000.00 195,500.00
Identify possible error/s:

GENERAL LEDGER
Account: Accounts Payable Account No.: 201
Date Item Ref Debit Credit Balance
2020
Apr 9 J1 with downpayment
Purchase of office equipment on account, 65,000.00 65,000.00
May 5 Purchase of office suppliest on account 13,000.00 78,000.00
May 7 Payment of Apr.9 Purchase of Off. Equipment 65,000.00 13,000.00
 https://www.youtube.com/watch?v=j89socopM5o

T-Account
sample CASH Accounts Payable
(Apr.2) 500,000.00 137,000.00 (Apr.3) (Apr.15) 30,000.00 90,000.00 (Apr.8)
(Apr.7) 18,000.00 42,032.00 (Apr.3) (Apr. 25) 30,000.00
(Apr. 11) 15,000.00 11,000.00 (Apr.23) 60,000.00 90,000.00
23,000.00 (Apr.28) 30,000.00 Bal.
533,000.00 213,032.00
Ba;ance 319,968.00

Dela Cruz, Capital

500,000.00 (Apr.2)
Take Note!
Ending Balance should be on
its Normal Side.
Assets: Debit
Liabilities: Credit
Owner’s Equity: Credit
Drawings: Debit
Revenue: Credit
Expenses: Debit
Take Note!

NOTHING should ever get

posted to the ledgers
without first being entered
in a journal.
Preparation of Trial Balance
Preparation of trial balance is the third step in the accounting process. First, we
record the transactions in the journal. And then we post them in the general
ledger. Then we prepare a trial balance to verify that the debit totals equal to the
credit totals. Let us take a look at the steps in the preparation of trial balance.

1. To prepare a trial balance we need the closing balances of all the ledger accounts and the cash
book as well as the bank book. So firstly every ledger account must be balanced. Balancing is the
difference between the sum of all the debit entries and the sum of all the credit entries.

2. Then prepare a four-column worksheet. One column for the account code, then another for
account name and the corresponding columns for debit and credit balances.

3. Fill out the account name and the balance of such account in the appropriate debit or credit
column

4. Then we total both the debit column and the credit column. Ideally, in a balanced error-free Trial
balance these totals should be the same
Once you compare the totals and the totals are same you close the trial balance. If there is a
difference we try and find and rectify errors.
 Dolor Laundry Services
Unadjusted Trial Balance
July 31, 2020
Account # Account Debit Credit
1010 Cash on Hand 54,023.00
1020 Accounts Receivable 34,590.00
1021 Allowance for Doubtful Accounts
1030 Equipments 87,004.00
1031 Accumulated Depreciation- Equip
1040 Furnitures & Fixtures 8,990.00
1041 Accumulated Depreciation - F&F
1050 Laundry Supplies 5,467.00
1060 Prepaid Rent 3,500.00
2010 Accounts Payable 47,365.00
3010 Dolor, Capital 140,000.00
3011 Dolor, Drawings 11,000.00
4010 Service Revenue 71,299.00
5010 Cost of Sales 34,897.00
6010 Salaries Expense 4,324.00
6020 Utilities Expense 6,056.00
6030 Communication Expense 2,999.00
6040 Rent Expense 3,500.00
6050 Depreciation Expense
6070 Miscellaneous Expense 2,314.00

Total: 258,664.00 258,664.00

Let’s Try It!
Based on the pre-class given (Garcia Co.),
journalize, post, and prepare T-Accounts
and Trial Balance on the following
transactions. Do it on the Worksheet
excel provided.
Let’s Try It!
1. Post the Journal Entries stated in
Slides 10, 11, and 12 (Lopez
Dance Studio).
2. Prepare T-Accounts for each
account title, and Trial Balance