MANAGEMENT SCIENCE
TOPIC 1: DECISION ANALYSIS
DEFINITION OF DECISION ANALYSIS
 Decision Analysis (DA) is a form of decision making
that involves identifying and assessing all aspects of
a decision, and taking actions based on the decision
that produces the most favorable outcome.
 Decision Analysis is a structured method for making
optimum decisions under uncertain settings. It is
utilized by organizational managers faced with
various possibilities. Decision tree analysis is the
oldest and most prevalent type of decision analysist.
GOAL/s OF DECISION ANALYSIS:
 To ensure that decisions are made with all the
relevant information and options available.
 Fundamentals of Decision Analysis can be used to
solved multitude of problems from simple everyday
problems to critical corporate issues or problems.
PURPOSE OF DECISION ANALYSIS
 Purpose of is to ensure that the decision is made by
keeping into consideration all the irrelevant factors,
information and options available
Why is Decision Analysis Important?
It is essential since it aids in addressing and evaluating
crucial business decisions. Decision tree analysis is the
oldest and most prevalent type of decision analysis.
DECISION ANALYSIS
Decision Helps Optimal Under Uncertain
Analysis Choices Conditions
DECISION TREE
 This approach is based on a structure
 DT has two sorts of nodes:
Choice Nodes
Chance Nodes
Choice Nodes – is node where a decision must be taken
Chance Nodes – is a node where an expected consequence
is achieved
FORMULA:
EV = (Probability of Success * Potential Revenue) +
(Probability of Failure * Potential Loss)
Decision Tree also includes numerical data to calculate the
expected value. Squares represent decisions and circles
represent outcomes. The lines branching from squares are
possible choices, while the lines branching from circles are
expected outcomes.
TOPIC 2: QUEUING ANALYSIS
DEFINITION OF QUEUING ANALYSIS
 Deals with modeling and analyzing systems with
queues of items and servers that process the items.
 Is the mathematical study of the delays of waiting
in line covering all aspects from arrival time the
number of servers.
 Examines every component of waiting in line
including the arrival process, service process,
number of servers, number of systems places, and
the number of customers.
 Determines the measures of performance of
WAITING LINES which can be used to design
services.
 It is not an optimization technique.
 Thus, waiting cannot be eliminated completely
without incurring inordinate expenses.
 The goal is to reduce its adverse impact to
TOLERABLE levels.
 A line or sequence of people, vehicle, any other
things awaiting their turn to be attended to or to
proceed.
CHARACTERISTICS OF QUEUING ANALYSIS
Input or Arrival (Inter-arrival) Distribution
Output or Departure (Service) Distribution
Service Channels
Service Discipline
Maximum Number of customers allowed in the system
Calling source
COMMON REACTIONS/ATTITUDE
Jockeying
Balking
Reneging
JOCKEYING – when the customer enters one line and then
switches to a different one in an effort to reduce the
waiting time
BALKING – the customer decides not to enter the waiting
line
RENEGING – the customer enters the line but decides to
leave before being served
KENDALL NOTATION
(a / b / c) : (d / e / f)
Input or Arrival (Inter-arrival) Distribution = a the queue
M = Poisson Arrival (Negative Exponential Service) Queuing Formula for Model A: Single-channel System
distribution (M/M/1)
D = Deterministic inter-arrival or service time distribution • λ = mean number of arrivals per time period
Ex = Erlangian /Gamma inter-arrival or service time • µ = mean number of people or items per time period
distribution • Ls = average number of units (customers) in the system
GI = General Independent distribution (waiting and being served)
G = General distribution = __λ__
Output or Departure (Service) Distribution = b µ-λ
M = Poisson Arrival (Negative Exponential Service) • Ws = average time a unit spends in the system (waiting
distribution time plus service time)
D = Deterministic inter-arrival or service time distribution = __1__
Ex = Erlangian /Gamma inter-arrival or service time µ-λ
distribution • Lq = average number time a unit waiting in the queue
GI = General Independent distribution = __λ2__
G = General distribution µ (µ - λ)
Service Channels = c • Wq = average time a unit spends waiting in the queue
Number of SERVERS = __λ__
Service Discipline = d µ (µ - λ)
FCFS – First Come, First Served • p = utilization factors for the system
LCFS – Last Come, Last Served = _λ_
SIRO – Service in Random Order µ
GD – General Service Discpline •Po = probability of 0 units in the system (that is, the
Maximum Number of customers allowed in the system = e service unit idle)
Finite = __1 – λ__
Infinite µ
Calling source = f • Pn>k = probability of more than k units system, where n
Finite is the number in the system
Infinite = [λ/ µ]^k+1
SYMBOLS USED IN QUEUING
• Λ (lamda) = mean arrival rate TOPIC 3: INVENTORY MANAGEMENT
• µ = mean service rate per busy DEFINITION OF INVENTORY MANAGEMENT
server • Is the supervision of noncapitalized assets or inventory
• P = λ/µ = utilization factor and stocks items.
• n = number of units in the system • As a component of SUPPLY CHAIN MANAGEMENT,
• Pn (t) = probability of exactly n inventory management supervises the flow of goods from
customers in the system at time t manufactures to warehouses and from these facilities to
• Pn = probability of exactly n customers point of sales.
in the system • An essential function of inventory management is to keep
• c = number of parallel servers a detailed record of each new or returned products as it
• Ws = expected waiting time per enters or leaves a warehouse or point of sales.
customer in the system • Some organizations from small to large businesses can
• Wq = expected waiting time per make use of inventory management to track their flow of
customer in the queue goods.
• Ls = expected number customers in the REASONS WHY IS INVENTORY MANAGEMENT
system
• Lq = expected number of customers in
1. EFFECTIVE INVENTORY MANAGEMENT enables
businesses to balance the amount of inventory they have
coming in and going out.
2. Business with good control inventory the more money it
can save in the operation.
3. Business that has too much stock has
overstock.
4. Business doesn't have enough inventory, can negatively
affect customer service.
5. It can help businesses strike the balance between being
under-and-overstocked for optimal and profitability.
STEPS IN INVENTORY MANAGEMENT PROCESS
Receive and Inspect Products
✓ First step is receiving your order from the supplier.
✓ Once order arrives, we need inspect the products.
✓ Handling conditions and Temperature are accurate for
perishables and that all products are in good condition.
Sort and Stocks Products
✓ After inspecting the products, they must be properly
stored in the warehouse and inputted into your leave
management system.
✓ Warehouse slotting techniques such as organizing
product based on SKU and product type can be beneficial.
Accept Customer Order
✓ This step in the inventory management process involves
accepting customer orders.
✓ Orders will typically go through a point of sales system
(POS) which processes the orders and accepts payments.
Fulfill Package and ship Order
✓ Once customer has placed an order the next step is to
accurately and expediently fulfill package and ship the
order.
✓ If the second the step in the process was optimized
searching for and selecting the products in the warehouse
should be relatively straightforward.
Reorder New Stock
✓ Recording new stock, it is crucial to ensure the timing of
new orders and amount of goods are correct.
✓ By leveraging the Reorder Point Formula, you can
minimize the risk of both stockouts and deadstock.
✓ Inventory Management system automate the process of
reordering which saves time and prevents any mistakes
from human error.
INVENTORY MANAGEMENT SYSTEM
• Inventory Management software system generally began
as simple spreadsheets that track the quantities of goods in
a warehouse but have become more complex since.
• Two (2) Layers of Inventory Management System
1. Integrated with Accounting
2. Enterprise resources planning (ERP) systems
• Function of Inventory Management System:
1. System keep track of goods in inventory including
location (several warehouse location)
2. It can also be used as calculator costs (multiple
currencies
3. Assessment of the value of the goods
• Common end user of Inventory Management System are
the large enterprises (designed for large businesses)
• Systems are heavily customized for a particular
requirements of an enterprise.
• Large systems were traditionally run a premises
Note: Small and midsize companies typically don’t need
such complex and costly systems. Usually, these companies
rely on standalone inventory management products,
generally
through software as a service (SasS) applications.
INVENTORY MANAGEMENT METHODOLOGIES
Stock Review
✓ Is the simplest inventory management methodology and
is generally, more appealing to smaller businesses.
✓ Stock review involves a regular analysis of stock on hand
versus projected future needs.
✓ Primarily uses manual effort, although there can be
inspections and reordering of supplies to meet the
minimum levels.
✓ Stock review can provide a measure of control over the ✓ LIFO also means the lower cost of older products left on
inventory management process the shelves is what's reported as inventory.
Just-in-time (JIT) Methodology Safety Stock Methodology
✓ Products arrive as they are ordered by customers and is ✓ Businesses sets aside inventory in case of an emergency.
based on analyzing customer behavior. ✓ Safety stock approach also provide a signal that it's time
✓ Approach involves researching buying patterns, seasonal to reorder merchandise before dipping into the safety stock.
demand and location factors that represent an accurate ✓ It's a good idea for businesses to work safety stock into
picture of which goods certain times and places. their warehouse management strategy in case their supply
✓ Advantage of JIT is customer demand can be met without chain is disrupted.
needing to keep large qualities of products on hand and in DIFFERENCE BETWEEN INVENTORY MANAGEMENT AND
close to real time. CONTROL
ABC Analysis Methodology • Inventory Management and Control are essential to
✓ Classifies inventory into three categories that represent running a successful direct sales and
the inventory values and cost significance of the goods. channel operation.
✓ Category A represents HIGH-VALUE and LOW-QUANTITY • Inventory management is the overall strategy to ensure
goods, adequate inventory,
✓ Category B represent MODERATE-VALUE quantity goods. • And inventory control encompasses the process and tools
used to track existing inventory.
✓ Category C represents LOW-VALUE and HIGH QUANTITY
ESSENTIAL DIFFERENCES
goods.
Inventory Management
✓ One of the advantages of ABC is that it provides better
• Is a strategy that ensures businesses always have the
control over high-value goods,
right amount of inventory at the right time and in the right
✓ Disadvantage is that it can require a considerable
place.
number of resources to continually analyze the inventory
• Inventory Management tools enable businesses to:
levels of all the categories.
1. Calculate safety stock
Economic Order Quantity (EOQ) Methodology
2. Calculate reorder points
✓ A formula determines the optimal time to order 3. Accomplish demand planning and forecasting
inventory in a warehouse management system. 4. Identify obsolete items
✓ Goal is to identify the largest number of products to 5. Optimize warehouse layout
order at any given time. 6. Identify fill rate percentage
✓ It free ups money that would otherwise be tied up in Inventory Control
excess inventory and minimizes costs. ✓ Addresses inventory already in a business's possession.
Minimum Order Quantity (MOQ) Methodology ✓ It works at the transactional layer of an ERP system and
✓ The smallest amount of product a supplier is willing to enable businesses to:
sell is determined. 1. Receive inventory
✓ This method is favorable to suppliers, enabling to quickly 2. Process interbranch transfers
get rid of inventory while weeding out bargain shoppers. 3. Process receipt
First In, First Out (FIFO) Methodology 4. Pack and ship stock
✓ Oldest inventory is old first to help keep inventory fresh. 5. Process customer invoices
✓ This typically means keeping older merchandise at the 6. Process supplier purchase orders
front of shelves and moving new items to the back.
Last In, First Out (LIFO) Methodology TOPIC 4: TRANSPORTATION AND LOGISTICS
✓ The newest inventory is typically recorded as sold first. MANAGEMENT
✓ The newest inventory has the highest cost of production, DEFINITION
selling it before older inventory means lower profits and
less taxable income.
  Transportation and logistics management are two
closely related business units that share a common
objectives.
 The primary goal is to transport inventory
throughout a company’s supply chain efficiently
and effectively.
 These are process involved in the production,
storage, inventory, delivery and distribution of
specific goods or services.
 Provides services from total transportation logistics
outsourcing helping you find capacity when you
have a tough load to move it high volume low price.
WHAT IS TRANSPORTATION MANAGEMENT?
 Freight transportation is a subset of logistics
management.
 Involves moving goods from one location to
another by any mode (air, rail, barge, maritime or
road).
 Transportation is an expensive and emission-heavy
process, making it an ideal target for carbon
footprint and cost reductions.
WHAT IS DISTRIBUTION MANAGEMENT?
 Is the process used to oversee the movement of
goods from supplier to manufacturer to wholesaler
or retailer and finally to the end consumer.
 Numerous activities and processes are involved:
1. Raw good management
2. Packing
3. Warehousing
4. Supply chain
5. Logistics
6. Block chain
IMPORTANCE OF TRANSPORTATION IN DISTRIBUTION
 Transportation helps in mass production.
 Expands old markets and creates new ones.
 Demands for goods increases and production
should also be increased.
 Transporting freight is essential to every business,
so having a solid transportation management
system is important.
KEY COMPONENTS OF TRANSPORTATION MANAGEMENT
SYSTEM
1. Transportation Management Strategy
2. Inventory Flow
3. Sustainable Logistics
4. Preferred Shipper Status
5. Customer Satisfaction
CHANNELS OF DISTRIBUTION
1. Wholesale – goods are distributed from manufacturers
to wholesalers in this channel.
2. Retailers – goods are distributed from manufacturer or
wholesaler to retailers.
3. Distributor – this channel moves from the source or
manufacturer to an authorized distributor.
4. Ecommerce – this is the newest and most disruptive
distribution channel wherein goods and services are
presented by virtually online and distributed directly to the
buyers.
ELEMENTS OF DISTRIBUTION MANAGEMENT
1. Vendor Relationship Management (VRM)
 Is a class of business movement made conceivable
by software programming solutions that expect to
give clients both freedom from merchants and
better means for drawing relationship with vendors.
 It can reduce the company cost, the vendor helps
them increase revenue and potentially profits,
which they can use to expand or improve the
business.
2. Customer Relationship Management (CRM)
 Is a technology for managing all your company's
relationships and interactions with customers and
potential customers.
 Is a process in which a business or other
organization administers its interactions with
customers, typically using data analysis to study
large amounts of information.
3. Inventory Management System (IMS)
 Is the process by which you track your goods
throughout your entire supply chain, from
purchasing to production to end sales.
 It is system for tracking inventory levels, orders,
sales and deliveries.
 It can also be used in the manufacturing industry to
create a work order, bill of materials and other
production-related documents.
4. Warehousing Management System (WMS)
 Is a set of policies and processes intended to
organize the work of a warehouse or distribution
Centre and ensure that such a facility can operate
efficiently and meets its objectives.
 It helps companies manage and control daily
warehouse operations from the moment goods and
materials enter a distribution or fulfillment center
until the moment they leave.
5. Transporation Management System (TMS)
 Is a subset of supply chain management concerning
transportation operations, which may be part of an
Enterprise Resource Planning system.
 Typically acts as an intermediate between ERP or
legacy order processing and warehouse or
distribution module.
METHODS OF DISTRIBUTION SUPPLY
Direct Sales
 Involve direct distribution from manufacturer to
customer.
  Direct sales is best for products that have a mid-
price point.
 Direct sales also require that products sold have an SUMMARY FOR DISTRIBUTION MANAGEMENT
extended shelf-life. 1. Distribution Management is essentially managing the
Brokerage movement of goods, whether it be from a wholesaler to
 It works as a go-between for manufacturers and retailer or from a retailer to a consumer.
retailers. 2. Different distribution channels are concerned with the
 Brokers don’t ship the products directly but handle delivery of goods to different types of entitles along the
the sale contracts. supply chain.
Wholesale 3. Some of the factors that distribution management must
 Wholesalers purchase products in bulk from the consider include things such as variations in the level of
manufacturer to sell at a higher price point through buyers' demands, shipping optimization and potential
resales. causes of shipment delays.
 Wholesale companies take on more of the risk if
products don’t sell since buyers purchase directly
from them.
Dual Distribution
 For instance, the company may decide to offer both
direct sales and wholesales.
 Franchises are one business model that frequently
uses more than one type of distribution method.
DISTRIBUTION MANAGEMENT STRATEGIES
Mass – the mass strategy aims to distribute the mass
market.
Selective – the selective strategy aims to distribute to a
select group of sellers.
Exclusive – the exclusive strategy aims to distribute to a
highly limited group.
WHAT AFFECTS DISTRIBUTION MANAGEMENT?
Buyer's Demands
 1st is the variation in buyers' demands.
 Continuously, buyers have different demand of
levels for goods.
 Companies need to plan for how to handle
increased purchases, orders and deliveries.
Shipping Optimization
 Is another factors that can impact effective
distribution management.
 Efficient shipping of perishable goods is always
important for any business that handles such items
because any losses through spoilage will negatively
impact profits.
Other factors
 There are number of other factors that can impact
efficient distribution and that distribution
management needs to consider.
 It includes shipping delays that can be caused by
vehicle accidents or breakdowns, airport delays, or
delays related to severe weather events.
1. Potential Changes in Management Regulations
2. Product Recalls or Packaging Problems
3. Changes to Orders or to the Address
INTEGRATED ACCOUNTING FUNDAMENTALS
ADJUSTING ENTRIES Prepayment
Are entries made prior to the preparation of financial
statements to update certain accounts so that they
reflect correct balances as of the designated time.​

Characteristics of Adjusting Entries

 To take up unrecorded income and expense of the
period.
 To split mixed accounts into their real and nominal
elements.
 To arrive at the correct valuation of assets and
liabilities. Deferral of Income
Types of Adjusting Entries
 Accruals of Income and Expenses
 Deferral of Income and Prepayments
 Recognition of Bad Debts
 Recognition of Depreciation
Accrual of Income and Expense
 Accrual means to record an income already earned
but not yet collected or an expense already
incurred but not yet paid.
 Accruals give rise to both income and receivable or
both expense and payable.
Deferral of Income/Prepayments Real, Nominal, and Mixed Accounts
 Deferral of income means income that is already Real Accounts (Permanent accounts) – accounts that are
collected in advance but not yet earned because not closed at the end of the accounting period. These
delivery of goods or services are deferred accounts include all balance sheet accounts, except the
(suspended). “Owner’s drawings” account.
 Prepayments on the other hand, are expenses paid Nominal Accounts (Temporary accounts) – accounts that
in advanced (prepaid) but not yet fully are closed at the end of the accounting period. These
consumed/expired. accounts include all income statement accounts, drawings
 It is also called the separation of the mixed account, clearing accounts and suspense accounts.
accounts (deferred income and prepaid expense) Mixed accounts – accounts that have both real and
into its real account portion and nominal account nominal account components. These accounts are subject
portion. to adjustment.

Methods of Initial Recording of Deferral of Income

Liability Method – under this method, cash receipts from
items of income are initially credited to a liability account.
At the end of the period, the earned portion is recognized
as income while the unearned portion remains as liability.
Income Method – under this method cash receipts from
items of income are initially credited to an income account.
At the end of the period, the unearned portion is
recognized as liability while the earned portion remains as
income.

Recognition of Bad Debts

 Under the concept of immediate recognition, a cost
that produces no future economic benefits or an
asset that ceases to provide future economic
benefits is recognized immediately as an expense.
 An application of this concept is the bad debts
expense.
 This requires an estimation of the amount of
receivables that will ultimately prove to be
uncollectible.
Recognition of Depreciation
 Under the concept of systematic and rational
allocation, costs that provide economic benefits
over several accounting periods but cannot be
directly associated with the earning of revenues are
recognized over the periods where the economic
benefits are consumed.
 Depreciation falls under this concept - an expense
is recognized over the period the fixed asset is used
to generate revenue. There are several methods to
compute for depreciation, but for simplicity
purposes we will use the straight line method.
 Formula is:
Financial Statements
The financial statements are the end product of the
accounting process. Information from the journal and the
ledger are meaningless to most users unless they are
summarized and communicated through the financial
statements.
 Statement of Financial Position (or Balance Sheet)
shows information on assets, liabilities and equity.
 Statement of Profit or Loss (or Income Statement)
shows information on income and expenses, and
consequently, the profit or loss for the period.
CLOSING ENTRIES
Closing entries are entries prepared at the end of the
accounting period to “zero out” all nominal accounts in the
ledger. This is done so that the transactions during the
period will not commingle with the transactions in the next
period. Closing entries are prepared as follows:
 All income accounts are debited and all expense
accounts are credited. The resulting balance is
recorded in a clearing account called the “Income
summary.”
 The balance of “Income summary” is closed to the
“Owner’s capital” account.
 Any balance in the “Owner’s drawings” account is
closed to the “Owner’s capital” account.

WORKSHEET
A worksheet is an analytical device used to facilitate the
gathering of data for adjustments, the preparation of
financial statements, and closing entries.

REVERSING ENTRIES
Reversing entries are entries usually made on the first day “Inventory” account is updated only when a physical count
of the next accounting period to reverse certain adjusting is performed. Thus, the amounts of inventory and cost of
entries made in the immediately preceding period. goods sold are determined only periodically.

Adjusting Entries that may be Reversed Computation of COGS under Periodic Inventory System:
 Accruals for income or expense
 Prepayments initially recorded using the expense
method
 Advanced collections initially recorded using the
income method
MERCHANDISING BUSINESS
 A merchandising business is engaged in buying and
selling of goods without the need for further
processing.
 It is also called the trading business or the buy and
sell business.
 This type of business carries inventory or goods Accounts Under Periodic Inventory System
that are sold to customers. Purchases – the account used to record purchases of
 Merchandising business is a buyer and a seller of inventory under the periodic system.
products or merchandise at the same time. Freight-in (Transportation-in) – the account used to record
 As a buyer, they call the merchandise as purchases the shipping costs incurred on purchases of inventory
(a mixed account). under the periodic system.
 When this merchandise is sold, they call this cost of Purchase Returns – the account used to record returns of
sales(expense), and when this merchandise is purchased goods to the supplier.
unsold at the end of the accounting period, they Purchase Discounts – the account used to record cash
call this inventory (asset). discounts availed of on the purchased goods.
 As a seller they record this merchandise as sales.

Inventory System
Perpetual Inventory System – under this system, the
“Inventory” account is updated each time a purchase or
sale is made. Thus, the “Inventory” account shows a
continuing or running balance of the goods on hand.
Cost of Goods Sold:
Periodic Inventory System – under this system, the
  Under the perpetual inventory system, the
balances of inventory and cost of goods sold are
readily determinable from the ledger.
 Under the periodic inventory system, the balances
of inventory on hand and cost of goods sold are not
readily determinable without performing first a
physical count of the quantity of goods on hand.

Sales – include both cash sales and credit sales.

Sales Returns – the account used to goods sold but were
returned by customers.
Sales Discounts – the account used to record cash
discounts given to and taken by customers.

Statement of Cost of Goods Sold and Gross Profit

 A Statement of Cost of Goods Sold and Gross Profit
is not a formal accounting report that is prepared
for external reporting.
 It is similar to the Income Statement.
 It is actually a part of an income statement.
However, the Statement of Cost of Goods Sold and
Gross Profit Gross Profit ends with gross profit.
 Gross profit represents the profit a business earns
after deducting the cost of goods sold or services
rendered but before deducting other expenses.
 Profit or Net profit is different from gross profit.
 Profit is the amount derived after deducting all
other expenses from the gross profit.
 Gross profit (gross income, gross margin, or sales
profit) is simply “net sales minus cost of goods
sold”.
T-Account Analysis

ACCOUNTING CYCLE FOR MERCHANDISING BUSINESS

Identifying and analyzing
Journalizing
Posting
Unadjusted Trial Balance
Adjusting Entries
Worksheet
Financial Statements
Closing entries
Posting-closing trial balance
Reversing entries

PAYROLL
 It represents compensation paid to employees and
workers.
 Employees are paid salaries based on a monthly or
semi-monthly rate.
 Workers are paid wages based on a daily, hourly or
piece rate.
PAYROLL ACCOUNTING
 It involves maintaining records of its employees and
workers where their personal data and work
experiences are noted.
 Deductions made from the salaries and wages of
employees:
o Income taxes
o Social Security Services (SSS) membership
contributions
 o Philippine Health Insurance Corporation
(PhilHealth) contribution
o Home Development Mutual Fund (HDMF)
or Pag-ibig contribution
o Union membership dues
Deductions from Gross Pay
Income Tax
 Amount withheld from the salaries/wages based on
the taxable income computed using a tax table and
list of exemptions provided by BIR
SSS Contributions
 Monthly contribution of the member based on the
compensation of the members.
 Current contribution rate is 14% of the monthly
salary credit with a minimum salary credit of
P4,000 and a maximum credit not exceeding
P30,000
 This is being shared by the employer (9.5%) and the
employee (4.5%)
PhilHealth
 Contribution of employees to enjoy the sickness
and hospitalization benefits offered by Philippine
Health Insurance Corporation.
HDMF/Pag-ibig
 Mandatory contribution of all employees.
 The monthly membership is 1% if monthly salary is
P1,500 and below and 2% if monthly salary is more
than P1,500.
 Employer’s share is fixed at 2% regardless of the
monthly salary of employee.
Union Dues
 When an employee or worker is a member of a
labor union, he/she is required to make
contribution to the union. Instead of the union
collecting from each employee, deductions are
made from the employee’s or worker’s salary and
to be turned over to the union treasurer.
Advances
 This is a prepaid expense account where cash has
been paid in advance for service to be received
from the employee or worker.
 This is a form of receivable
Payroll Sheet
 It is a tabular for prepared by the company to
determine the take home pay of workers, officers
and employees.
 It is made up of five columns
o Employee’s or worker’s name
o Gross pay representing compensation
(salary/wage) earned for a certain period
o Deductions for payroll liabilities
o Net pay or take-home pay
o Signature signifying receipt of salary/wage
by the employee/worker
BANK RECONCILIATION STATEMENT
A bank reconciliation statement is a report that is prepared
for the purpose of bringing the balances of cash (a) per
records and (b) per bank statement into agreement. More
specifically, bank reconciliations are prepared to
 Explain the difference between the cash balance
reported on the bank statement and the cash
balance in the accounting books.
  Arrive at the adjusted(correct) cash balance to be  Credit memos
shown in the financial statements.  Debit memos
 Provide information for reconciling journal entries.  Book errors
Bank reconciling items
Balance per bank statement, end – the ending cash  Deposit in transit
balance in the bank statement of the current month  Outstanding
Balance per books, end – the cash balance in the  Checks
accounting records as of the end of the current month  Bank errors
Credit memos – These are additions (bank credits) made by
the bank to the depositor’s bank account but not yet VALUE ADDED TAX
recorded by the depositor.  A tax levied by the government to certain providers
Examples of credit memos include of goods and services.
 Collections made by the bank on behalf of o Input tax – each time a purchase is made, a
the depositor. 12% VAT is included.
 Interest income earned by the deposit o Output tax – each time a sale of good or
 Proceeds from loan directly credited or service is made by a VAT registered
added by the bank to the depositor’s business or practitioner, a 12% VAT is
account charged to the customer or client.
Debit memos – These are deductions (bank debits) made o If Output tax is higher than Input Tax = Tax
by the bank to the depositor’s bank account but not yet Payable
recorded by the depositor. o If Input Tax is higher than Output Tax =
Examples of debit memos include Deferred Tax
 Bank service charges representing bank
charges for fees, interest, penalties, and
surcharges
 No sufficient funds checks (NSF) or drawn
against insufficient funds checks (DAIF) –
These are checks deposited and already
recorded by the bank but subsequently
returned to the depositor because the
drawer’s fund is insufficient to pay the
check
Books errors – errors committed by the depositor (e.g.,
erroneous recording in the accounting books
Deposits in transit – are deposits already made but not yet
received by the bank, or received by the bank but not yet
credited to the depositor’s bank account.
DIT often occur when deposits are mailed to the
bank, placed in an overnight depository, made
through check and the check has not yet cleared, or
made after the bank’s cut-off
Outstanding checks – these are checks drawn and released
to payees but are not yet encashed with the bank.
Bank errors – errors committed by the bank

Book reconciling items

THE CONTEMPORARY WORLD
MIGRATION
Important Terms in Migration
 Discplacement
 Emigration
 Expulsion
 Immigration
 Naturalization
 Refugee
 Xenophobia
 Diaspora
 Brain Drain
PRIMER ON DEMOGRAPHY
Demography
 It is the study of POPULATION using statistics and
mathematics, and it is commonly used in
conjunction with other Social Sciences, particularly
Sociology.
 It is a critical discipline that helps policymakers and
academics better understand the composition of
the population in order to monitor population
growth.
History of Demography
 Though censuses, a type of demographic survey,
were undertaken during the Roman Empire as a
mechanism for males to enlist in the army,
demography as a science did not emerge until John
Graunt's obsession with death. He was the first to
examine baptism and burial data in order to
estimate the number of males of military age and
women of childbearing age (National Geographic
Society, 2022).
 John Graunt
born April 24, 1620, London—died April 18, 1674,
London. English statistician widely regarded as the
father of demography, the statistical study of
human populations.
 When Charles Darwin's theories on evolution and
Francis Galton's eugenics gained acceptance in
academia, demographers began to address
FERTILITY.
Demography (NOW)
Demography is now used by a variety of organizations for a
variety of purposes: governments can use it to provide a
definite list of their constituents; scientists use it in
research to understand the backgrounds of their
participants; and private organizations use it to gauge
consumer interest (Crossman, 2020).
Important Terms and Concepts in Demography
Population Size – the amount of people in a population is
referred to as its population size. This information can be
obtained by conducting a nationwide census.
Population Density – the average number of people in a
population per unit of area or volume is referred to as
population density. The Population Density is a metric used
to determine if a location is overcrowded or congested.
Population Distribution – it investigates how dispersed
individuals are in their habitat. They could, for example, be
clustered into groups, randomly scattered, or
uniformly spaced.
Fertility Rate – also known as Birth Rate, is the number of
children born alive to a woman during her reproductive
years, which are between the ages of 15 and 49.
Mortality Rate – [Crude Death Rate] the ratio of the
number of deaths occurring within one (1) year to mid-year
population expressed per 1,000 population.
Migration – the movement of people across a specified
boundary for the purpose of establishing a new permanent
residence.
SUMMARY
The emergence of demography shown that studying
specific elements of a population can reveal a great deal
about it. It is logical, then, that demography has evolved
into a recognized discipline used by numerous
organizations and people interested in studying
demographic characteristics and using this knowledge for a
variety of purposes.
INTERNATIONAL ORGANIZATIONS
October 24 = UN Day
International Organizations or Ios
 are “associations established by governments or
their representatives that are sufficiently
institutionalized to require regular meetings, rules
governing decision-making, a permanent staff, and
headquarters” (Shanks, Jacobson and Kaplan, 1996
in Barnett and Finnemore, 1999).
 At the moment, there are so many IOs that it's
tough to keep track of who they are and what they
stand for. However, the reason for their
development is always clear: we need IOs to
facilitate cooperation and sustain international ties
between governments around the world, given the
uncertain nature of today's politics.
United Nations
From the 51 countries that initially started the UN, it now
has 193 member states that work together to achieve the
organization’s main purposes:
 To keep WORLD PEACE;
 To develop friendly relations with each other;
  To help the marginalized and disadvantaged people
in each country; and
 To work together to achieve the previous purposes.
Association of Southeast Asian Nations (ASEAN)
Flores and Aba (1997) reported that a representative from
the Southeast Asian countries Indonesia, Malaysia,
Philippines, Singapore and Thailand came together on
August 8, 1967 to sign the Declaration that will permit the
creation of the Association of Southeast Asian Nations
(ASEAN).
International Monetary Fund (IMF)
The IMF mainly acts as a consultant and support to
countries when it comes to implementing policies
surrounding financial stability, monetary cooperation and
trade growth (IMF, 2022).
World Bank
Provides loans to countries who may need financial
assistance, the clear difference between the IMF and the
World Bank is that the latter’s focus lies on low-income
countries.
SUSTAINABLE DEVELOPMENT GOALS (SDGS)
 No Poverty
 No Hunger
 Good Health
 Quality Education
 Gender Equality
 Clean Water and Sanitation
 Renewable Energy
 Good Jobs and Economic Growth
 Innovation and Infrastructure
 Reduced Inequalities
 Sustainable Cities and Communities
 Responsible Consumption
 Climate Action
 Life Below Water
 Life on Land
 Peace and Justice
 Partnerships for the Goals
GLOBAL CITIZENSHIP
 It is a way of living that recognizes our world as an
increasingly complex web of connections and
interdependencies. One in which our choices and
actions may have repercussions for people and
communities locally, nationally or internationally.
 It is a term used to describe the social,
environmental, and economic actions taken by
individuals and communities who recognize that
every person is a citizen of the world.
 A global citizen is someone who…
o Is aware of the wider world and has a sense
of their own role as a world citizen
o respects and values diversity
o has an understanding of how the world
works
o participates in the community at a range of
levels from the local to the global
Cosmopolitanism
 The belief that the world is one community; time
and time again, Cosmopolitanism has been used as
the basis for global citizenship.
 It is commonly connected with the idea that all of
mankind should be part of a single community that
transcends other forms of allegiance, such as
nation-states or sources of sociocultural identity.
 Heater (2000) explains that for the Greeks, if
somebody is the citizen of the state (the polis),
then by extension they are a citizen of the universe
(the kosmopolis).
 In the contemporary world, this means that if
somebody is a citizen of a nation, then they are also
a citizen of the global world.
 Parekh (2003) also writes that “human beings are
born and live within a particular political
community, and are bound to it and to their fellow-
citizens by special ties. They have a common
interest in maintaining the territorial integrity and
stability of their community, a common system of
rights and obligations, and a general climate of
civility and mutual trust, and must bear their share
of the collective burden”.
The Philippines on Global Citizenship
DepEd K to 12 Basic Education
This permitted the expansion of learning years under the
basic education (elementary and high school) from ten to
twelve. Furthermore, kindergarten for young children has
been made mandatory in the K to 12 curriculum.
CHEd’s ‘The Contemporary World’
A new set of General Education courses were introduced
which students, regardless of their course, were required to
take in particular, the course. “The Contemporary World”
was created so that students can be exposed to the “world
outside the Philippines and to inculcate a sense of global
citizenship and global ethical responsibility” (CHED, 2016).