CBLM Bookkeeping Nciii PDF Free

Competency Based Learning
Materials
Sector : HEALTH SOCIAL, AND OTHER COMMUNITY

DEVELOPMENT SERVICES SECTOR
Qualification Title : BOOKKEEPING NC III
Unit of Competency: JOURNALIZE TRANSACTIONS
Module Title : JOURNALIZING TRANSACTIONS

FOR SINGLE PROPRIETORSHIP
2nd Floor MLCD Properties Bldg., Apovel Zone 1 Bulua,

Cagayan de Oro City
HOW TO USE THIS COMPETENCY BASED LEARNING

MATERIALS
Welcome to the module in “Journalizing Transactions for Single
Proprietorship”. This module contains training materials and activities for
you to complete.
The unit of competency “Journalize Transactions" contains
knowledge, skills and attitudes required for Bookkeeping NC III.
You are required to go through a series of learning activities in order
to complete each learning outcome of the module. In each learning outcome
there are Information Sheets, Self-Checks, Task Sheet and Job Sheets.
Follow these activities on your own. If you have questions, don’t hesitate to
ask your facilitator for assistance.
The goal of this course is the development of practical skills. To gain
these skills, you must learn basic concepts and terminologies. For the most
part, you'll get this information from the Information Sheets and TESDA
Website, www.tesda.gov.ph
This module is prepared to help you achieve the required competency,
in "Journalizing Transactions for single proprietorship".
This will be the source of information for you to acquire knowledge
and skills in this particular competency independently and at your own
pace, with minimum supervision or help from your instructor.
Remember to:
 Work through all the information and complete the activities in each
section.
 Read information sheets and complete the self-check. Suggested
references are included to supplement the materials provided in this
module.
 Most probably your trainer will also be your supervisor or manager.
Your trainer is there to support you and show you the correct way to
do things.
 You will be given plenty of opportunity to ask questions and practice
in your respective laboratory. Make sure you practice your new skills
during regular training schedule. This way you will improve both your
speed and memory and also your confidence.
 Use the Self-checks, Job Sheets at the end of each section to test your
own progress.
 When you feel confident that you have had sufficient practice, ask
your Trainer to evaluate you. The results of your assessment will be
recorded in your Progress Chart and Achievement Chart.
Date Developed: Document No.

September 2020 Issued by:
Date Revised:
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Journalize Transaction
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 You need to complete this module before you can move on to the next
module
Bookkeeping NC III

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List of Competencies
No. Unit of Competency Module Title Code

Journalize Journalizing
1. transactions for single HCS412301
transactions
proprietorship.
2. Post transactions Posting transactions HCS412302
3. Prepare trial balance Preparing trial balance HCS412303
Preparing financial
4. Prepare financial reports for single HCS412304
proprietorship,
reports partnership and
corporation.
5. Review internal control Reviewing internal
system control system HCS412305
MODULE CONTENT
UNIT OF COMPETENCY: JOURNALIZE TRANSACTIONS

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MODULE TITLE : JOURNALIZING TRANSACTIONS FOR SINGLE
PROPRIETORSHIP
MODULE DESCRIPTOR:
This module covers the knowledge, skills, and attitudes in
preparing chart of accounts, analyze documents and preparing journal
entries for Single Proprietorship.
NOMINAL DURATION: 72 hours
LEARNING OUTCOMES:
At the end of this module you MUST be able to:
1. Prepare chart of accounts
2. Analyze documents
3. Prepare journal entry
ASSESSMENT CRITERIA:
1. List of asset, liability, equity, income, and expense account titles
are prepared in accordance with Generally Accepted Accounting
Principles.
2. Chart of Accounts is coded according to industry practice.
LEARNING OUTCOME SUMMARY

Learning Outcome 3
PREPARE JOURNAL ENTRY
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CONTENTS:
1. Generally Accepted Accounting Principles
2. Accounting Equation
3. Journalizing of Proprietor account titles
ASSESSMENT CRITERIA:
1. Journal entries are prepared in accordance with generally accepted
accounting principles.
2. Debit and credit account titles are determined in accordance with
chart of accounts.
3. Explanation to journal entry is prepared in accordance with the
nature of transaction.
4.
CONDITIONS: The following resources must be provided:
1. Calculator
2. Journal Paper
3. Learning Materials
4. Pencil
5. Eraser
6. Philippine Financial Reporting Standards
METHODOLOGIES:
1. Group discussion
2. Interaction
3. Lecture
ASSESSMENT METHODS:
1. Written test
2. Practical/performance test
3. Interview
4. Practical exercises
Learning Experiences
Learning Outcome 3

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Prepare journal entry
Learning Activities Special Instructions
Read Information Sheet 1.3-1 on Read and understand the
Generally Accepted Accounting information sheet and check
Principles yourself by answering the Self-
check. You must answer all the
questions correctly before
proceeding to the next activity.
Answer Self Check 1.3-1 If you score 100% upon comparing
your answer to answer key of Self
Check 1.3-1, you may proceed to
Information Sheet 1.3-2, if not
return to Info Sheet 1.3-1
Read Information Sheet 1.3-2 Read and understand the
On Accounting Equation information sheet and check
yourself by answering the Self-
Information Sheet 1.3-3, if not
return to Info Sheet 1.3-2
Perform Task Sheet 1.3-2 Task Sheet will help you practice
your skill.
The Performance Criteria Checklist
will guide and help you evaluate
your work as you are practicing your
skill.
Evaluate your work using the
Performance Criteria. When you are
ready, present your work to your
trainer for final evaluation and
recording.
If you have questions about the use
of the matrix, please ask your
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trainer.
Read Information Sheet 1.3-3 on Read and understand the
Journalizing of Proprietor account information sheet and check
titles yourself by answering the Self-
perform job sheet 1.3-3, if not go
back to Info sheet 1.3-3
Perform Task Sheet 1.3-3 Task Sheet will help you practice
your skill.
The Performance Criteria Checklist
will guide and help you evaluate
your work as you are practicing your
skill.
Evaluate your work using the
Performance Criteria. When you are
ready, present your work to your
trainer for final evaluation and
recording.
If you have questions about the use
of the matrix, please ask your
trainer.
Information Sheet 1.3-1

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Learning Objectives:

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After reading this INFORMATION SHEET, YOU MUST be able to:
1. Familiarize the Generally Accepted Accounting Principles
WHAT IS GAAP?
Generally Accepted Accounting Principles (US) is the commonly followed and
accepted set of rules, procedures, and guidelines adopted by SEC (Securities
and Exchange Commission) for reporting the financial statements. The
pronunciation of the acronym is ‘GAAP’. The term is confined to the US and
hence, it is called US GAAP. But, actually, the term includes the whole
accounting field rather the only US. GAAP not only gives clarity but also
ensures the minimum level of consistency one should follow while reporting
the financial statements. It helps the investors and the management to
analyze the information and helps in the decision making. It helps in
comparing the financial statements of two different companies.
FEATURES OF GAAP RELEVANCE

Generally Accepted Accounting Principles need to be relevant to the ones
who use it. It needs to provide required, useful and meaningful information
to the users as well as to the readers. All the necessary information should
be presented and nothing should be over or understated as it will lead to
misinterpretation of the information. Also if the readers don’t understand
the information, such principles will have no acceptance and hence, it is of
no use also.
OBJECTIVITY / RELIABILITY
Generally Accepted Accounting Principle should be one which is objective in
nature and not influenced by a person. It should not be personally biased as
that will decrease its utility and should be error-free. Also, the information
stated therein must be verifiable. A Generally Accepted Accounting Principle
is one which is completely based on facts and figures.
UNDERSTANDABILITY
Readers should understand the information present in the financial
statements and reports properly. This is the reason why the financial
statements are accompanied with the annexures. Annexures (Notes) are the
attachments at the end of the financial statements which gives clarity of a
particular fact/figure.

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COMPARABILITY
The financial statements should be comparable from one year to another.
Generally, everyone prefers printing the past year’s financial statements
with the present year’s. It should also be comparative with that of the
other countries.
OBJECTIVES OF GAAP
The information provided should be helpful to the investors, creditors, and
all the other users for making strong decisions regarding investments,
credit, and other financial policies. The information should be helpful to the
creditors and the potential investors in evaluating the amount, timing,
certainty or uncertainty of their expected cash receipts. It should be helpful
in making financial, long-term and important decisions.

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BASIC ASSUMPTIONS OF US GAAP
There are four basic assumptions of US GAAP. They are:
 Accounting Entity: Owner is separate from his business and other
businesses. Also, the maintenance of the books of that of the owner’s and
the business is also separate.
 Going Concern: The presumption is that the business will run for an
indefinite period with no intention of dissolution.
 Monetary Unit: There has to be a stable monetary unit (for example ‘$’ in
the US) for the recordation of any transactions. One can record only those
transactions which carry a monetary value and can be stated in terms of a
currency.
 Time Period: There has to be a standardized time period of reporting the
financial statements which is usually monthly, quarterly or annually.
IMPORTANCE OF GAAP
Since everyone commonly accepts and follows the GAAP, its importance is
increasing day by day. It becomes easier to report the financial standards as
there is a transparency by following GAAP. The GAAP principles are a
benchmark. These principles help the investors, creditors in making
important analysis, making long-term decisions etc. To not only to the top
level management but also to the readers and the common people, GAAP is
quite useful. It helps them in understanding and interpreting the financial
statements, hence making accurate judgments.

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Self- Check 1.3-1
Multiple choices:
Instruction: Underline only the letter corresponding to the best
answer.
1. The following are features of GAAP, except?

a. Relevance
b. Objectivity
c. Materiality
d. Comparability
2. Continuation of an accounting entity in the absence of evidence to the

contrary is an example of the basic concept of
a. Accounting entity
b. Time period
c. Going concern
d. Accrual basis
3. The following are importance of GAAP, except?

a. Consistency
b. Transparency
c. Making important decisions
d. All of the above
4. I. Time period is the presumption that the business will run for
indefinite period with no intention of dissolution.
II. The relatively stable economic, political and social environment
support is known as going concern.
a. Both statement are true
b. Both statement are false
c. Fist statement is true and second statement is false
d. Fist statement is false and second statement is true
5. The financial statements should be comparable from one year to

another is known as
a. Going concern
b. Comparability
c. Time period
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d. Consistency
ANSWER KEY 1.3-1

1. C
2. C
3. D
4. A
5. B

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ACCOUNTING EQUATION
1. Understand the concept of accounting equation
What is the accounting equation?
ARTICLES
In the formation of accounting data, a basic accounting equation is used for

financial statement no matter if you are just a small business or a
multimillion company. The Italian mathematician Luca Pacioli formulated a
basic accounting equation formula in 1494 in his work “A Treatise on
Accounts and Records.” Accounting systems of all countries are based on
the use of this basic accounting equation. Virtually every business
transaction to be reflected in accounting can be formalized
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within the framework of this equation or within its several variations that we
will review later in this article. So, what is the accounting equation? Let’s
look at its definition from a dictionary.
Equation Definition
The basis of accounting balances and reports on profits and losses (financial
statements) of almost all foreign organizations is based on a basic
accounting equation. This equation has the following formula (the
accounting equation may be expressed as):
Assets = Liabilities + Owner’s equity
Let’s take a close look at accounting equation components:
Assets
Assets reflect the total value of the property that the business has, and
which is in its turnover. In other words, it is what it owns.
Liabilities
Liabilities reflect the size of the financing of an organization’s assets by third
parties, banks, and private financial institutions. This is what the
company owes.
Equity
Owner’s equity characterizes the value of investments made in this

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organization by its owner/s (shareholders). Owner’s equity is everything that
is left from the assets after paying all the liabilities.
BUSINESS TRANSACTIONS AND EVENTS
Not all business activities are “accountable”. For example, the hiring of
employees, death of company president and the entering into contracts are
all business activities that cannot be quantified or express in terms of unit
of measure, thus cannot be recorded in the books of the enterprise.
Business activities are said to be accountable and are called business

transactions and events when the affect the asset, liabilities and owner’s
equity or what we previously termed as accounting elements or accounting
values which are classified into two (2) categories namely,
1. External transactions- these involves exchange of economic resources

by a business enterprise with another business enterprise.
Examples are selling of services and commodities to customers,
payment of accounts to suppliers, payment of store or office rents, etc.
2. Internal transactions- these are transactions or events that happened

or take place within the business enterprise only. Examples are
conversion of raw materials into finished product, unanticipated loss
from fire and flood, etc.
Business events are the occasional occurrence in the life of business like for
example, inventory loss due to theft and robbery, decline in market
valuation of inventory, calamities affecting the enterprise, etc. Business
transactions on the other hand, are exchange of equal monetary values.
This definition implies the following concept of understanding:
1. For every valued received, another value is given away as an

exchange;
2. These values are measured in terms of pesos which are presumed to
be equal.
To summarize, in every transactions, there is Valued Received, we call a

Debit and Value Parted With, called a Credit. This is the “’give and take”
process of accounting as expressed in an equation:

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Debit, Value Received= Credit, Value Parted With
In order to balance the equation asset=liabilities + equity we also need to

know the equation of debit and credit because analysing transactions
through debit and credit process will make more easier to balance the
accounting equation. Thus, to balance we need to analyse the transactions
very well.
ANALYSIS OF BUSINESS TRANSACTIONS
Business transactions are analysed from the view point of business. If the
transaction is “purchased” or “bought”, it is the business that is buying; if
the transaction is “sold, it is the business that is selling; if the transaction is
“paid”, it is the business that is paying; if the transaction is “collected”, it is
the business that is collecting; if the transaction is “rendered services”, it is
the business that is rendering services, etc. and not the other way around.
Don’t forget this, “always consider yourself as the business” when making
analysis.
The value received or debit should first be determined before the value
parted with or credit. To test your analytical ability on transaction analysis
let us have a series of dry run or drill. Let us try this,
“If I’ll give you an eraser and you will give me a piece of
chalk in return as an exchange, can we determine the
value received and the value parted with?
If your answer is, the value received is an eraser and the

value parted with is a piece of chalk, you have answered it
correctly. You will then say,
“Debit, eraser and credit, a piece of chalk”

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Let us try again, giving a final drill before we go into the business
transaction analysis proper.
“If I’ll give you a ball pen and you will give me a piece of paper in return
as an exchange, can we determine the value received and the value
parted with?
If your answer is, the value received is a ball pen and the value parted
with is a piece of paper, you have answered it correctly. You will then
say,
“Debit, ball pen and credit, a piece of paper”
Let us have this illustration:
Bought a car for cash, P 850,000
The following questions are answered for your final guide.
1. Who bought the car?
Answer: the business identifying
2. What is the Valued Receive?
Answer: car
3. What is the value parted with? Analysing
Answer: money-cash

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4. What is the peso equivalent of these exchanges?
Answer: P850, 000 Measuring
We then say,
Debit, value received- car P 850, 000 Journalizing
Credit, value parted with-money-cash P850, 000
Here is another illustration:
Sold a car for cash, P 650,000
The following questions are answered for your final guide.
1. Who sold the car?
Answer: the business identifying
2. What is the valued receive?
Answer: money-cash
3. What is the value parted with? Analysing
Answer: car
4. What is the peso equivalent of these exchanges?
Answer: P650, 000 Measuring
When the say,
Debit, value received- money-cash P650, 000

Journalizing
Credit, value parted with-car P650, 000
Starting from this point, whenever we mention transactions and events,

they are understood to be referring all to business. On the other hand, with
the foundation of great analysis with the use of value receive (Debit) and
valued parted with (Credit) we can easily solve problem related to
accounting equation.

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ASSET=LIABILITIES + OWNER’S EQUITY
This equation is referred to as the basic accounting equation. This

accounting equation is applied to all economic entities regardless of size,
nature of business or forms of business organizations. This means that:
ASSETS- the normal balance is Debit LIABILITIES-
the normal balance is Credit OWNER’S EQUITY-
the normal balance is Credit.
The understanding of their respective normal balances is very important so

that you can picture the effect of changes on these values in terms of pesos.
THE RULES OF DEBIT AND CREDIT
The accounting equation, A=L+OE has developed the rules to be followed in

the study of accounting. The equation stands for the “normal balances” or
“increase sides” in each of the accounting elements. In other words, the
normal balances refer to the increase side of the accounts which may enter
either be a debit or credit. For assets, the increase is the debit side (left)
while for Liabilities and Owner’s Equity the increase sides are on the credit
side (right).
The best thing to do in order to remember the accounting equation is to

recall at once your elementary song which runs like this “I have two hands,
the left and the right…”
To illustrate:
ASSET
BEDIT SIDE CREDIT SIDE
NORMAL BALANCE DECREASE SIDE
OR INCREASE SIDE

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We then say, DEBIT to increase an asset and CREDIT to decrease an asset
LIABILITIES
DECREASE SIDE NORMAL BALANCE OR
INCREASE SIDE
We then say, CREDIT to increase a liability and DEBIT to decrease a

liability
OWNER’S EQUITY
INCREASE SIDE
We then say, CREDIT to increase an owner’s equity and DEBIT to decrease

an owner’s equity
The increases and decreases of an owner’s equity account are diagram

below:
INCREASE DECREASE
INVESTMENT BY WITHDRAWAL
OWNER
OWNER’S
EQUITY
REVENUE EXPENSES

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Factors that will cause the “Owner’s Equity” to increase:
1. Investment by owner
2. Revenue
Factors that will cause the “Owner’s Equity” to decrease:
1. Withdrawal by owner
2. Expenses
Drawing or Personal- the reduction of an owner’s equity account arising

from cash or property withdrawal of an owner is not debited to owner’s
equity account to affect the decrease but instead debited to “Drawing
Account”. The debit to drawing account increase the said account with
corresponding decrease in owner’s equity.
DRAWING OR PERSONAL

NORMAL BALANCE OR DECREASE SIDE
INCREASE SIDE
We then say, DEBIT to increase Drawing and CREDIT to decrease Drawing
TEMPORARY ACCOUNTS
INCOME or REVENUE- all income earned of the same nature are

summarized in this account.
INCOME OR REVENUE
INCREASE SIDE

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We then say, CREDIT to increase Income and DEBIT to decrease Income
EXPENSES

NORMAL BALANCE OR DECREASE SIDE
INCREASE SIDE
We then say, DEBIT to increase Expenses and CREDIT to decrease

Expenses
To summarize, Income and Expenses are factors that affect Owner’s Equity.
Income increase Owner’s Equity while Expenses decreases Owners Equity.
Owner’s Equity is increased by credit to income and is decreases by debit to
expenses.
To recapitulate the develop rules of debit and credits are again restated as
follows:
We debit to: We credit to: decrease in

Rule 1 increase in asset asset increase in liability
Rule 2 decrease in liability increase in Owner’s
Rule 3 decrease in Owner’s equity Equity decrease in
Rule 4 increase in drawing drawing
TEMPORARY ACCOUNTS
Rule 5 decrease in income increase in income
Rule 6 increase in expenses decrease in expenses
APPLICATION OF THE RULES

The rules of debit and credit are applicable to all forms of business
organizations; be it sole partnership and corporation, regardless of what
type of business activity in which they are engaged in.
Shown below are transactions and the effect to asset, liabilities and equity.
This also serves as a sample with regards to analyzing transactions with the
use of debit and credit process with the aim that the total balance of

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accounting equation must be equal. Provided below is a template in which
you are going to fill up the amount on the respective column which it have
an effect on the asset, liabilities or equity.
Transactions:
On August 01, 2020 Ms. Sam Smith, a Sole Proprietor open a bank account
with China Bank in the amount of P300,000 to start with her business.
During the month the following transactions occurred:
August 10, 2020 –Bought office supplies on account for 1,000
August 11, 2020 –Bought Merchandise for cash P5, 000.
August 14, 2020 –Sold Merchandise on account worth 1, 000 to Ms. Mary
Baguion
August 15, 2020 – Paid 3,000 as payment of rental for the month of August
August 18, 2020 – Received cash of 1, 000 from Ms. Baguion as payment of
merchandise purchased on August 14, 2020.
Instructions: Analyze the transactions given above and put the amount of
where it belongs to affect the asset, liability or equity account by using the
debit and credit process of analyzing. Moreover, if the transaction has no
effect on the asset, liability or equity just write “NE”
Answers:
DATE ASSET LIABILITIES OWNER’S
EQUITY
Aug. P300,000 NE 300,000
01,2020
Aug. 10, 1, 000 P1,000 NE
2020
Aug. 11, NE NE NE
2020
Aug. 14, 1,000 NE 1,000
2020
Aug. 15, (3,000) NE (3,000)
2020
Aug. 18, NE NE NE
2020
TOTAL P299,000 P1,000 P298,000
We then say, that asset= liabilities + Equity in which asset is P299, 000 and
while the sum of liabilities and Owner’s equity is also P299, 000 (1,000+298,

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000). Therefore our analysis might be correct because we can also get equal
total by coincidence but not correct just like this scenario shown below.

EQUITY
Aug. P300,000 NE 300,000
01,2020
Aug. 10, 1, 000 P1,000 NE
2020
Aug. 11, NE NE NE
2020
Aug. 14, 1,000 NE 1,000
2020
Aug. 15, (3,000) NE (3,000)
2020
Aug. 18, 1, 000 NE 1, 000
2020
TOTAL P300,000 P1,000 P299,000
On the highlighted part, you have misanalysed that instead receiving cash
as collection you then assume that you have receive the cash as additional
capital. Since, you have increased the asset and as well as increase the
owner’s equity where in fact the transaction pertain to as collection and it
must to increase the asset as well as reduced the asset account. For we
have to debit Cash and credit Accounts receivable. Thus, we need to analyze carefully
the transactions because one false move you will get the wrong total or answer. Hence, I will show you the
analysis per transactions below through the use of debit and credit rules and you must to memorized and
understand your Chart of accounts well.
DATE PR PARTICULARS DEBIT CREDIT
Aug. 01 101 Cash P300, 000
301 Smith, Capital P300, 000
To record initial
investment
To record investment we then say, debit Cash and credit Smith Capital.
Since cash is an asset account so then increase the asset and Capital is
obviously owner’s equity so we increase as well the equity side by P300, 000.
Again you have to consider yourself as the business.
Aug. 10 103 Office supplies 1,000
201 Accounts payable 1,000

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To record purchase of
office supplies on account.
The purchase on account we then say, Debit to office supplies (asset)
And credit to accounts payable (liability). Thus, increase the asset account
and liability to 1,000.

Aug. 11 501 Purchases 5,000
101 Cash 5,000
merchandise for cash
To record the purchases of merchandise for cash we debit Purchases and
credit cash. Purchases is part of Inventory an asset account and cash is also
asset account therefore it has no effect since we will increase the asset
account at the same time we will decrease it with same amount.

Aug. 14 102 Accounts Receivable 1,000
401 Sales 1,000
To record sale of
merchandise on account
To record the sale of merchandise is we debit Accounts receivable an asset
account which result to increase in asset and we credit sales an equity
account. Thus we increase both asset and equity account by 1,000.

Aug. 15 604 Rent expense 3,000
101 Cash 3,000
To record payment of
rental.
The payment of rental will result to decrease in asset and equity since we
credit the cash and debit an expense which is result to reduction of equity
Aug. 18 101 Cash 1,000
102 Accounts Receivable 1,000
To record collection
The collection will result to increase and decrease of asset because Cash
and Accounts Receivable is both an asset account. Thus, it will have a no
effect ‘NE” to the equation.

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Self- Check 1.3-2
Multiple choices:
Instruction: Underline only the letter corresponding to the best
answer.
1. The formula of basic accounting is
a. Asset –Liabilities= Equity
b. Asset=Liabilities + Equity
c. Asset=Liabilities - Equity
d. Asset + Liabilities= Equity
2. Asset=1,000
Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Liabilities=300
Equity=?
a. 1300
b. -1300
c. -700
d. 700
3. The theory of accounting which best describes the accounting equation
expressed “asset=liabilities+ Equity is the
a. Entity theory
b. Fund theory
c. Proprietary theory
d. Residual theory
4. Asset=13,333
Liabilities=?
Equity=3,333
a. 16,666
b. -16,666
c. 10,000
d. -10,000
5. Cash=? Inventory=
1,500
Receivables=1,000
Accounts Payable=500
Capital= 2,500
a. 500
b. 1,000
c. 1,500
d. 2,000
II. True/False. Write T if the statement is true and F if the statement is

false.
1. Luca Pacioli is a mathematician who formulated the basic
accounting in 1944.
2. The asset will increase if the owner’s equity will increase and if
liabilities will remain constant.
3. The asset will increase if the owner’s equity will decrease and if
liabilities will remain constant.
4. Liabilities reflect the size of the financing of an organization’s assets
by third parties, banks, and private financial

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
institutions. This is what the company owes.
5. Assets reflect the total value of the property that the business has,
and which is in its turnover. In other words, it is what it owns.
ANSWER KEY 1.3-2

Test I Test II
1) B 1. F- In the year 1494

2) D 2. T
3) A 3. F- The asset will increase
4) C 4.T
5) A 5.T

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Solutions:
Question #2
Asset= Liabilities+ Equity
1,000= 300 + 700
Question #4
13,333=10,000+3,333
Question #5
Asset:
Cash ? (Squeeze) 500 (3k-1k-1.5k)
Inventory 1,500
Receivables 1,000
Total Asset: 3,000
Liabilities:
Accounts Payable 500
Equity:
Owner’s contribution 2,500
Total liabilities and equity 3,000
TASK SHEET 1.3-2

Title: IDENTIFY TRNASACTIONS AND CALCULATE ACCOUNTING
EQUATION
Performance Objective: Given the following case problem and answer
sheet you should be able to identify accounting
transactions and calculate the total asset,
liabilities and equity in 20 minutes.
Supplies/Materials :
 Paper

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
 Chart of accounts
 Pencil
 Eraser
 Philippine Financial Reporting Standard
CASE PROBLEM:
On September 01, 2020 Ms. Josie Cabusog, a Sole Proprietor open a
bank account with Rural Bank of Talisayan in the amount of P100,000
to start with her business. During the month the following transactions
occurred:
September 02, 2020 –Bought office supplies on account for 3,000
September 07, 2020 –Bought Merchandise for cash10, 000.
September 11, 2020 –Sold Merchandise on account worth 5, 000 to Ms.
Doricel Padla.
September 15, 2020 – Paid 7, 000 as payment of rental for the month of
September.
September 18, 2020 – Received cash of 5, 000 from Ms. Padla as
payment of merchandise purchased on September 11, 2020.
Tools/Equipment : Calculator
Steps/Procedure:
1. Read and analyze the transaction carefully through the process
of debit and credit rule of analyzing.
2. Write the said amount in the column provided in which it affect
as to increase or decrease the Asset, Liabilities or Owner’s
Equity. Otherwise, NE if no effect.
3. Add the asset column as well as the liabilities and equity
column.
4. The total asset must be equal to the sum of liabilities and
equity.
Assessment Method: WRITTEN TEST
Performance Criteria Checklist 1.3-2
CRITERIA YES NO
Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Did you….
1. Read and analyze the transaction carefully
through the process of debit and credit rule of
analyzing.
2.Write the said amount in the column provided
in which it affect as to increase or decrease the
Asset, Liabilities or Owner’s Equity.
Otherwise, write “NE” if no effect.
3. Add the asset column as well as the liabilities
and equity column.
4. The total asset must be equal to the sum of
liabilities and equity
5. Perform the task within 20 minutes.
ANSWER SHEET:
EQUITY
Sept.
01,2020
Sept.
02,2020
Sept.
07,2020
Sept.
11,2020

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Sept.
15,2020
Sept.
18,2020
TOTAL

JOURNALIZING OF PROPRIETOR ACCOUNT TITLES
1. Perform journal entry of single proprietorship
SOURCE DOCUMENTS
The actual sequence of events begins with the identification of transactions.

What transactions are considered as accountable and what are not. The rule
is only transactions and events which are of financial bearing to the
business being recognized.

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
The basis of identifying transactions is the supporting business documents
that are on the file or yet to be filed as evidence of transactions to assure the
reliability and verification records. The most common documents of a service
concern business are customers’ and suppliers’ sales invoices, official
receipts, purchased orders, receiving reports, delivery receipts, cash
vouchers, Checks, etc. After identifying, follows next is analyzing, we have to
ask these questions to ourselves. “What is the value received and the value
parted away in these particular transactions? While we answered that
mentally, we then come to measuring of the transaction. This time, we used
peso as our financial denominator.
In our would-be illustrative problem, Davao Laundry Services, let’s take a

look at the following series of documents completing transactions
Purchase Order
The 1st document that
Davao Laundry Services
should fill-up in placing
orders

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Charge Invoice
In the 2nd document, SM City-

Davao, the supplier issued a
charge invoice to Davao Laundry
Services. The charge invoice
showed that Mr. Severo Santos
Acknowledge to have received the
goods.
In a narrative transaction, this
could be interpreted as
“purchases laundry supplies on
account from SM City-Davao,
P35, 000.
This is a source entry in the
Purchase Book
Check Voucher
This is the 4th document to be
issued by Davao Laundry
Services which is attached for
every payment made by
check. This is the source
entry in the cash
disbursement Journal as it
bears the check number and
the explanation as to what
payment the check is
intended for.
In a narrative transaction,
this is interpreted as “partial
payment of account with SM
City-Davao, P25, 000”.

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
CHECK
A check is always accompanied by a check
voucher when making payment of whatever
nature. Check No. 73411 that appeared in the
face of the check was typewritten at the right top
most portion of the check voucher.
A check is issued in lieu of cash or as a
substitute for cash. This can be either be for
depository bank or can be deposited to payee’s
bank account.
Official Receipt
This is the 5th document
to be prepared by SM
City-Davao acknowledging
to have received payments
from Davao Laundry
Services.
These complete the transactions between Davao Laundry Services, the

customer and SM City- Davao, the supplier.
Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
TYPES OF ACCOUNTS
Personal Accounts- these accounts pertains to natural person, companies
and representative of some person.
Real Accounts- are the ones related with properties asset or possessions.
These properties can intangible or tangible. For tangible assets these are
buildings, land and equipment while intangible refers to trademark, patent
and copyright. Most of the accounts can be found in Balance sheet.
Nominal Accounts- these accounts relate to income, expenses, losses or
gains. These include wages, salary and rent. Most of the accounts can be
found in Income statement account.
BOOKS OF ACCOUNTS
The records that are used and kept by the business in sorting all of the
accounting data are called Books of Accounts. These books are with ready
or prepared design to fit the need of the business.
These are two sets of books that are used by the business. They are the
book of original entry and the book of final entry. The book of original entry is
called JOURNAL which is of two kinds; GENERAL JOURNAL and the
SPECIAL JOURNAL. This is called the book of original entry because it is in
this book where transactions are recorded for the first time. The book of
final entry is called the LEDGER which is in two kinds; the GENERAL
LEDGER and the SUBSIDIARY LEDGER. This is called the book of final
entry because it is in this book where transactions that were recorded in the
journal are transferred for final recording. Special Journal, General Ledger
and Subsidiary Ledger are discussed in the succeeding competency.
GENERAL JOURNAL
A General Journal can that be of a loose-leaf or book bound form. It has the
following columnar headings:
DATE COLUMN- shows the date when the transaction took place.
PARTICULARS- shows the item or accounts debited and credited as a result
of a transaction analysis as well as a brief or concise explanation of what the
transaction is all about.
FOLIO OR POST REFERENCE- shows the number of an account in a ledger
or page of a ledger to which it was transferred. Folio is the latin word for
page. It can be also found in the chart of accounts it is written beside the
account title.

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol Training
Academy Inc.
Revision # 00
DEBIT COLUMN- this is a money column showing the peso amount of the
value received in a transaction.
CREDIT COLUMN- this is a money column showing the peso amount of the
value parted with in a transaction.
Shown below is a page of a General Journal:
PROCEDURES IN FILLING UP THE JOURNAL

1. The Date column is divided in two sub-columns. Enter in the first
sub-column, the amount and the year. The year is written in the small
figures above the month in the same space of the first line. In each
leaf of a journal the year and the month is written in the front page
but not repeated in the back page. Enter in the second sub-column
the date when the transactions occurred.
2. The Particular column- after analyzing a transaction and have ably
determined the value received and the value parted with as well,
record this transactions in the form of journal entry. Enter the debit
item first in the same line (first line) with the transaction date and the
corresponding peso amount in the debit money column. The credit
item is indented with a reasonable distance from the column of the
debit item. The amount of the debit must equal with the amount of
the credit. In the case of compound entry, debit, items are entered in
a block form occupying the first, second or third line depending on the
number of items debited. An indention is made and then enters the
credit items will also be in block form in case of two or more items are
credited.
A complete journal entry should have an explanation. The explanation
must state briefly but concisely the nature of the transaction. The first
Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
word of the explanation should be indented with a reasonable
distance from the first letter of the account or item credited. It is
usually worded “To record…”
RECORDING PROCESS
Recording is the first phase of accounting. This involves the writing down of
business transactions in a systematic manner and in order of their
occurrence in the book of original entry called Journal.
Journalizing is the act of recording business transactions in the journal. It is
the first step of the accounting process. The entry that is made in the
journal is called Journal entry. A Journal Entry maybe SIMPLE or
COMPOUND.
A simple journal entry is one that has one debit item with a debit amount
and one credit item with a credit amount.
Shown below is a formation of a simple journal entry.
Transactions: “On September 10, 2020 the company bought computer
equipment on cash for P30, 000”
Year Particulars PR Debit Credit
2020
Sept 1
. 0 Computer Equipment 104 P300 0 0
Cash 101 3 0 0 0 0
Computer.
A compound journal entry is one that may have one debit item and two or
more credit items; two or more debit items and one credit item; or may have
two or more items on both side.
Also shown below is a formation of a compound journal entry with two debit
items and one credit item.
Transaction: On September 30, 2020 the company paid the following
expense, telephone, light and water P5, 000 and Salaries of employee P10,
000.
2020
Sept 3 60
. 0 Utilities Expense 3 P 5 0 0 0
60
Salaries Expense 5 1 2 0 0 0
10
Cash 1 1 7 0 0 0

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Payment for expenses.
THE THEORY OF DEBIT AND CREDIT

The term debit means “left” and credit means “right”. This refers to an
equation where the left side is equal to the right side. If the left weighs 60
pounds correspondingly the right also weighs 60 pounds. There could be no
instance that the left side weighs heavier or lighter than the right and vice
versa. The final rule is that, the “left will always equal the right”.
VALUE RECEIVED=VALUE PARTED WITH

(The amount of value received will always equal with that of
the amount value parted with)
Now that we know how to fill up the journal and know the concept of debit
and credit. Then let’s us have a drill.
Instructions: Journalize the given transactions below in the journal.
Date Transactions
09/05/202 Bought office supplies on cash basis P1,500
0
09/07/202 Bought merchandise on account P10, 000
0
09/15/202 Sold merchandise on account P5, 000
0
09/18/202 Collected P5, 000 on sales on account.
0
09/30/202 Paid the following: Advertising P1,000,Utilities P400, Rent
0 P3,000
General Journal

2020
Sept
. 5 Office Supplies 103 P 1 5 0 0
Cash 101 1 5 0 0
office supplies.
7 Purchases 501 1 0 0 0 0
Accounts Payable 202 1 0 0 0 0
To record purchases
Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
on account.
15 Accounts Receivable 102 5 0 0 0
Sales 401 5 0 0 0
To record sales on
account.
18 Cash 101 5 0 0 0
Accounts Receivable 102 5 0 0 0
To record collection
on Sept. 15 account.
30 Advertising expense 602 1 0 0 0

Utilities expense 603 4 0 0
Rent expense 604 3 0 0 0
Cash 101 4 4 0 0
expenses.
PERIODIC VS PERPETUAL INVENTORY SYSTEM

Periodic inventory system uses an occasional physical count to measure the
level and cost of goods sold (COGS). The Perpetual system keeps track of
inventory balances continuously, with updates made automatically
whenever a product is received or sold.

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Let us have an example to compare the journal entries between the Periodic
and Perpetual.
Transaction:
1. Bought Merchandise on account from Bog’s and Rose P15, 000 On October
01, 2020
Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Periodic Inventory System Journal entry
2020
Oct. 01 Purchases 501 P 1 5 0 0 0
To record Purchases.
Perpetual Inventory System Journal entry

2020
Oct. 01 Purchases 501 P 1 5 0 0 0
2020
Oct. 01 Merchandise Inventory 501 P 1 5 0 0 0
Computer.

2020
Oct. 01 Purchases 501 P 1 5 0 0 0

2020
Oct. 01 Purchases 501 P 1 5 0 0 0

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
SELF-CHECK 1.3-3
I. On the space provided, indicate whether the normal balance of each of the given
account is a Debit or Credit.
1. Accounts Receivable
2. Accounts Payable
3. Cash
4. Expenses
5. Income
II. Provide journal entry of the following transactions using Periodic Inventory
system.
Date Transactions
10/01/202 The business DCB was registered as single proprietorship
0 with the Department of trade and industry, Darel C.
Bacolcol invested P 40,000.
10/02/202 Bought computer equipment for P20, 000 cash.
0
10/05/202 Bought office supplies on cash basis for 500.
0
10/08/202 Bought merchandise on account P10,000
0
10/15/202 Paid freight of P1,500
0

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
ANSWER KEY 1.3-3
I
1. Debit
2. Credit
3. Debit
4. Debit
5. Credit
II
General Journal
2020
Oct. 1 Cash 101 P 4 0 0 0 0
Bacolcol, Capital 301 4 0 0 0 0
To record initial
investment.
2 Computer Equipment 104 2 0 0 0 0
Cash 101 2 0 0 0 0
computer.
5 Office Supplies 103 5 0 0
Cash 101 5 0 0
Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
office supplies
8 Purchases 501 1 0 0 0 0
merchandise.
15 Salaries 605 1 5 0 0
Cash 101 1 5 0 0
salary.
TASK SHEET 1.3-3

Title: PREPARE JOURNAL ENTRY FOR SINGLE PROPRIETORSHIP
Performance Objective: Given the following set of transactions during

September 2020, you should be able to perform
or enter journal entry procedures using General
Journal in accordance with the chart of accounts
provided and enter transactions using Periodic
inventory system in 20 minutes.
Supplies/Materials :
 Journal Paper
 Learning Materials
 Pencil
 Eraser
 Philippine Financial Reporting Standards
Set of Transactions for the month of September 2020 of TDL Com.

Date Transactions
Sept. 01 Mr. Tyrone D. Lopez invests cash of P500, 000 in the business.
Sept. 04 Bought computer for cash P30, 000.

Sept. 15 Bought Merchandise on account from D&G com. P20,000
Sept. 17 Bought office supplies for P700.
Sept. 18 Sold merchandise on account P15,200
Sept. 19 Paid P200 freight on September 18 sales.
Sept. 21 Paid D&G com. On Sept. 15, purchases.
Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Sept. 25 Collected from Sept. 19 customer
Tools/Equipment : Calculator
Steps/Procedure:
1. Prepare journal entries in accordance with the Generally
Accepted Accounting Principles.
2. Determine transactions whether to credit or debit depending on
the normal balance.
a. Debit the account when it will increase the account and
credit the said account when it will be decreased.
b. Credit the account when it will increase the account and
debit the said account when it will be decreased.
c. “Debit” what comes in and “credit” what goes out.
3. Refer to the chart of accounts provided for the account titles to
be used on making journal entries.
4. Record the transactions on the General Journal provided.
Assessment Method: WRITTEN TEST

Date Revised:
BOOKKEEPING NC III
Developed by:
Lovely Rose C.
Technical
Bacolcol
Training
Academy Inc.
Revision # 00
Performance Criteria Checklist 1.3-4
CRITERIA YES NO
Did you….
1. Prepare journal entries in accordance with the
Generally Accepted Accounting Principles.
2. Determine transactions whether to debit or credit.
3. Record the transactions on the General Journal
provided.
4. Refer to the chart of accounts provided for the
account titles to be used on making journal entries.
5.Perform within 20 minutes
General Journal
Year P
Particulars R Debit Credit
CHART OF ACOUNTS (Periodic)
ASSET
101 Cash
102 Accounts Receivable
103 Office supplies
104 Computer Equipment
LIABILITIES
201 Accounts Payable
202 Notes Payable
EQUITY
301 Capital
302 Drawing
401 Sales
402 Sales Discounts
403 Sales return and allowances
501 Purchases
502 Purchase returns and allowances
503 Purchase Discounts
504 Freight in
601 Freight out
602 Advertising expense
603 Utilities expense
604 Rent Expense
605 Salaries Expense
REFERENCES:
1. Fundamentals of Accounting By Lopez

2. Theory of Accounts reviewer By Valid
3. US GAAP. International Financial Reporting Tool. November 2018.
https://efinancemanagement.com/financial-accounting/gaap
4. Author of blog CHARLES LUTWIDGE
https://www.bookstime.com/what-is-the-accounting-equation
5. https://www.accountingcapital.com/basic-accounting/how-to-prepare-
a-journal-entry/
6. Investopidea

BOOKKEEPING NC III September 2020 Issued by: Page 52 of 52
Journalize Transaction Developed by:
Lovely Rose C. Bacolcol
Revision # 0

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Competency Based Learning

Sector : HEALTH SOCIAL, AND OTHER COMMUNITY

Unit of Competency: JOURNALIZE TRANSACTIONS

Module Title : JOURNALIZING TRANSACTIONS

2nd Floor MLCD Properties Bldg., Apovel Zone 1 Bulua,

HOW TO USE THIS COMPETENCY BASED LEARNING

Date Developed: Document No.

Date Developed: Document No.

No. Unit of Competency Module Title Code

3. Prepare trial balance Preparing trial balance HCS412303

UNIT OF COMPETENCY: JOURNALIZE TRANSACTIONS

Date Developed: Document No.

LEARNING OUTCOME SUMMARY

Date Developed: Document No.

Information Sheet 1.3-1

Date Developed: Document No.

FEATURES OF GAAP RELEVANCE

Date Developed: Document No.

Date Developed: Document No.

Date Developed: Document No.

1. The following are features of GAAP, except?

2. Continuation of an accounting entity in the absence of evidence to the

3. The following are importance of GAAP, except?

5. The financial statements should be comparable from one year to

ANSWER KEY 1.3-1

Date Developed: Document No.

What is the accounting equation?

In the formation of accounting data, a basic accounting equation is used for

Let’s take a close look at accounting equation components:

Date Developed: Document No.

BUSINESS TRANSACTIONS AND EVENTS

Business activities are said to be accountable and are called business

1. External transactions- these involves exchange of economic resources

2. Internal transactions- these are transactions or events that happened

1. For every valued received, another value is given away as an

To summarize, in every transactions, there is Valued Received, we call a

Date Developed: Document No.

In order to balance the equation asset=liabilities + equity we also need to

ANALYSIS OF BUSINESS TRANSACTIONS

If your answer is, the value received is an eraser and the

“Debit, eraser and credit, a piece of chalk”

Date Developed: Document No.

“Debit, ball pen and credit, a piece of paper”

Let us have this illustration:

Bought a car for cash, P 850,000

The following questions are answered for your final guide.

1. Who bought the car?

Answer: the business identifying

2. What is the Valued Receive?

3. What is the value parted with? Analysing

Date Developed: Document No.

Answer: P850, 000 Measuring

Debit, value received- car P 850, 000 Journalizing

Credit, value parted with-money-cash P850, 000

Here is another illustration:

Sold a car for cash, P 650,000

The following questions are answered for your final guide.

1. Who sold the car?

Answer: the business identifying

2. What is the valued receive?

3. What is the value parted with? Analysing

4. What is the peso equivalent of these exchanges?

Answer: P650, 000 Measuring