Name: _____________________________ Grade & Section: _____________________ Score: __________

School: ____________________________ Teacher: ____________________Subject: FABM1 - 11

LAS Writer: Leah D. Barrido Content Editor: Wilfredo A. Barluado, Principal II
Lesson Topic: General Journal Language Evaluator: Jean Carlyn B. Maceda
Learning Target: Record Transaction in the General Journal. (ABM_FABM11-IVe-j-36). Quarter 4 Week4
LAS1
Reference: Lopez, R. Jr., 2002, Millennial Edition. Fundamentals of Accountancy, Business and
Management, Davao City, Philippines. RM LOPEZ, JR., Publishing. pp. 270-275.

Content

Journalizing

General Journal can be a “loose-leaf” or book bound” it simply refer as book of original entry.
(1) Date shows date of the transactions took place
Journal has the following (2) Particulars shows item or the account to be debited or credited
columns headings: (3) Folio shows the post reference of the transaction
(4) Debit indicate the peso amount debited
(5) Credit indicate the peso amount credited

20A May 1 Cash in Bank 01 5 0 0

General Journal Accounts Receivable 30 50 0
Collection from customer

Account Titles
Explanation Amount (Dr.) Amount (Cr.)

JOURNALIZING THE TRANSACTIONS IN A MERCHANDISING BUSINESS

In step 1, transactions are identified and measured. At this point, the business’s paper work are examined
to discover it the transactions have a financial impact or effects. Financial transactions, as defined, are activities
that change the value of an asset, liability or equity overtime.

Step 2 is the Preparation of Journal Entries

A merchandising company may keep track of its transactions in both special and general journal.

CHART OF ACCOUNTS – a list of account titles is developed ahead of time to assist the bookkeeper and
accountant in determining which titles should be used to describe the exchanges of values in a transaction.

Chart of Accounts
F Assets F Income
10 Cash in Bank 50 Sales
11 Accounts Receivable 51 Sales Discount
12 Allowance for Bad Debts 52 Sales Returns & Allowances
13 Merchandise Inventory
14 Supplies Inventory Costs
60 Purchases
Property and Equipment 61 Purchase Discount
20 Furniture and Fixtures 62 Purchase Returns & Allowances
21 Accumulated Depreciation Furniture & Fixtures 62 Freight-In
23 Transportation Equipment
Liability Expenses
33 Accounts Payable 70 Freight-out
34 Accrued Expenses 71 Salaries Expense
72 Utilities Expense
Owner’s Equity 73 Taxes and Licenses
45 ABZ, Capital 74 Supplies Expense
46 ABZ, Drawing 75 Rent Expense
47 Income & Expenses Summary 76 Uncollectible Accounts
77 Depreciation Expense

Illustration: Journalizing Transactions for merchandise

Jan.
1 – ABZ invested the following:
a) Deposited at bank, P850,000
b) Merchandise with net realizable value of 250,000
c) Transportation Equipment with fair market value of P1,800,000
2 - Purchased merchandise in cash from store A amounting P150,000 and paid freight and handling,
P2,500.
3 – Returned P3,000 cost of merchandise from store A due to some defects and no replacements have
been made.
5 – Sold merchandise for cash, P120,000 to TLP and gave a 3% trade discount and paid freight on shipment,
P3,500.
7 – Purchase merchandise on account from B, P50,000. Term: 3/10, N/30.
8 – Sold merchandise on account to C, P185,000. Term: 2/10, N/30. Paid freight on shipment, P1,200.
9 – Purchased merchandise on account from D costing P230,000. Term:2/10 EOM.
10 – Received P4,000 worth of merchandise from C for not conforming with the order and was not replaced.
12 – Paid the account with B, P48,500 after availing of the 3% purchase discount.
13 – Sold merchandise on account to E, P80,000. Term: 2/10, N/30.
15 – Purchased merchandise on account Y, P70,000. Term: 3/10, N/30.
18 – Returned P1,500 cost of merchandise to Y due to bad order and was not replaced.
- Collected in full the account of C, P177,380.
20 – Sold merchandise for cash, P50,000 to X and gave a 1% trade discount.
22 – Received P500 worth of merchandise from X as item breakage and was not replaced due to out of stock.
23 – Collected from E the amount of P78,400 net of 2% discount on Jan. 13 sales on account.
26 – Sold merchandise on account to Z, P420,000. Term: 3/10, EOM.
28 – Paid the following expenses.
Salaries for the month P15,000
Light & Water bill (Utilities 5,800
Taxes and Licenses 6,500
Rent Expenses 10,000
Total P37,300
30 – Withdrew P2,000 for personal use of ABZ.
31 – Sold merchandise on account to W, P35,000. Term; 2/10, N/30.
Journalizing - General Journal #1. Shown below is an example of journalizing business transactions.
20A Particulars Folio Debit Credit
Jan. 1 Cash in Bank 10 850,000
Merchandise Inventory 13 250,000
Transportation Equipment 23 1,800,000
A, Capital 45 2,900,000
Additional Investment

2 Purchases 60 150,000
Cash in Bank 10 15,000
Purchase of merchandise for cash

Freight-in 62 2,500
Cash in Bank 10 2,500
Payment of freight

3 Cash in Bank 10 3,000

Purchase Returns & Allowances 62 3,000
Return of merchandise purchased

5 Cash in Bank 10 116,400

Sales 50 116,400
Sales of merchandise with a discount

Freight-out 70 3,500
Cash in Bank 10 3,500
Freight on merchandise sold

7 Purchases 60 50,000
Accounts Payable (B) 10 50,000
Sales of merchandise with a discount

8 Accounts Receivable (C) 11 185,000

Sales 50 185,000
Merchandise sold on account

Freight-out 70 1,200
Cash in Bank 10 1,200
Freight paid for shipment
20A Particulars Folio Debit Credit
9 Purchases 60 230,000
Accounts Payable (D) 33 230,000
Purchase of merchandise on account

10 Sales Returns and Allowances 52 4,000

Accounts Receivable (C) 11 4,000
Return of merchandise sold on account

12 Accounts Payable (B) 33 50,000

Purchase Discounts 61 1,500
Cash in Bank 10 48,500
Payment with a discount

13 Accounts Receivable (E) 11 80,000

Sales 50 80,000
Merchandise sold on account

15 Purchases 60 70,000
Accounts Payable (Y) 33 70,000
Purchased of merchandise on account

18 Accounts Receivable (Y) 11 1,500

Purchase Returns and Allowances 62 1,500
Return of merchandise purchased

Cash in Bank 10 177,380

Sales Discount 51 3,620
Accounts Receivable (E) 11 181,000
Collection in full

20 Cash in Bank 10 49,500

Sales 50 49,500
Sales of merchandise with trade discount

22 Sales Returns and Allowances 52 500

Cash in Bank 10 500
Return of merchandise sold for cash

23 Cash in Bank 10 78,400

Sales Discounts 51 1,600
Accounts Receivable (E) 11 80,000
Sales of merchandise with trade discount

26 Accounts Receivable (Z) 11 420,000

Sales 50 420,000
Sales on account

28 Salaries Expense 71 15,000

Utilities Expense 72 5,800
Taxes and Licenses 73 6,500
Rental Expense 75 10,000
Cash in Bank 10 37,300
Paid various expenses

30 ABZ, Drawing 46 20,000

Cash in Bank 10 20,000
Withdrawal by the owner

31 Accounts Receivable (W) 11 35,000

Sales 50 35,000
Sales on account
Problem#1. Merchandise Transactions – M Hardware and S Auto Supply for the month of May 20A
follows.

May 2 - Bought merchandise for cash from J Enterprise, P50,000.

4 - Returned P6,000 cost of merchandise to J Enterprise for not conforming with the order.
8 - Purchase merchandise on account costing P20,000 from L Co. term: 2/10, n/30.
8 - Returned P2,000 cost of merchandise to L Co.
11 - Paid the account with L Co., net f purchase returns and 2% purchase discounts.
13 - Sold merchandise for cash to A Trading, P35,000.
14 - Received P2,000 cost of merchandise returned from A Trading.
17 - Sold merchandise on account to H Co., P2,000. Term: 3/10, n/30.
21 - Received P3,000 cost of merchandise returned from H Co.
22 - Collected the account of H Co. net sales returns and 3% sales discounts.
22 - Bought merchandise for cash from Z Co., P30,000.
25 - Return P1,000 cost of merchandise to Z Co.
27 - Bought merchandise on account from L Trading, P35,000. Term 10% if paid within 15days.
- Return of P2,500 cost of merchandise to L Trading.
29 - Paid the account with L Trading after deducting the purchase return and availed a 10%
purchase discount.
- Additional cash invested by X the owner, P3000.
30 - Cash withdrawal P50,000 by X for personal use.
31 - Paid salaries for the month, P20,000.

Activity- Instruction: A) Prepare a chart of account based on the transactions mentioned above. Kindly base
your answers on the examples provided in the journalizing transactions. 20points

Chart of Accounts
F Assets F Income

Property and Equipment Costs

Liability Expenses

Owner’s Equity

B) Record all transaction in the General Journal based on the above transactions. 40 points Note: Provide
extra sheets if needed.

20A Particulars Folio Debit Credit

May