ACT001: FUNDAMENTALS OF ACCOUNTING

4-1

Classifying Accounting Values

ASSET LIABILITY OWNER’S

EQUITY
1. Cash in Bank /
2. Villamor, Capital /
3. Postage and Communication /
4. Accounts Receivable /
5. Accounts Payable /
6. Unused Office Supplies /
7. Taxes and Licenses /
8. Advances to Employees
9. Villamor, Drawing /
10. Notes Receivable /
11. Repairs and Maintenance /
12. Commission Income /
13. Petty Cash Fund
14. Insurance Expense /
15. Retainer Income /
16. Cash on Hand /
17. Unearned Retainer Income /
18. Interest Income /
19. Interest Expense /
20. Office Supplies Expense /
21. Mortgage Payable /
22. Miscellaneous Expense /
23. Dental Fees Income /
24. Notes Payable (Long-Term) /
 4-2

Identifying a Current and Non-Current Assets

a. PE Land

b. CA Accounts Receivable

c. CA Notes Receivable

d. PE Building

e. CA Unexpired Insurance

f. CA Cash on Hand

g. PE Furniture & Fixtures

h. CA Advances to Employees

i. CA Unused office supplies

j. PE Store Equipment

k. CA Prepaid Rent

l. PE Office Equipment

4-3

Normal Balance of Accounts (debit)

X 1. Building

2. Depreciation Expense

X 3. Unused Supplies

X 4. Notes Receivable

5. Utilities Expense

6. Julito Kwan, Capital

7. Uncollectible Accounts

8. Interest Expense

X 9. Transportation Equipment

10. Julito Kwan, Drawing

 4-4

Normal Balance of Accounts (Credit)

1. Interest Income / 6. Accounts Payable

/ 2. Notes Payable / 7. Ofelia Coronado, Drawing

3. Subscription Income 8. Unused Supplies

/ 4. Ofelia Coronado, Capital 9. Prepaid Expense

5. Accounts Receivable 10. Professional Income

4-5

Normal Balance of Accounts (Dr or Cr)

1. Notes Receivable – DEBIT

2. Taxes and Licenses – CREDIT

3. Cash in Bank – DEBIT

4. Accounts Payable – CREDIT

5. Alex Ajoc, Capital – CREDIT

6. Insurance Expense – CREDIT

7. Interest Income – DEBIT

8. Unused Supplies – DEBIT

9. Alex Ajoc, Drawing – CREDIT

10. Prepaid Insurance – DEBIT

11. Unearned Service Income – CREDIT

12. Notes Payable – CREDIT

13. Prepaid Rent – DEBIT

14. Interest Expense – CREDIT

15. Professional Income – DEBIT

16. Utilities Expense – CREDIT

17. Supplies Used – CREDIT

18. Office Equipment – DEBIT

19. Salaries and Wages – CREDIT

20. Rent Expense – CREDIT

21. Land – DEBIT

22. Interest Receivable – DEBIT

 4-6

Normal Balance of Accounts (increase when debited)

/ 1. Accounts Receivable

/ 2. Commission Income

/ 3. Furniture and Fixtures

4. Clyde Naong, Capital

/ 5. Prepaid Advertising

6. Rent Expense

/ 7. Notes Receivable

8. Clyde Naong, Drawing

9. Insurance Expense

10. Accounts Payable

4-7

Effects of Accounts Balances

INCREASE DECREASE

1. Notes Receivable account was debited /

2. Accounts Payable account was debited /

3. Meriam Nerbarte, Capital account was credited /

4. Rent Expense account was debited /

5. Petty Cash Fund account was debited /

6. Accounts Receivable account was debited /

7. Meriam Nerbarte, Drawing account was credited /

8. Accounts Payable account was credited /

9. Prepaid Insurance account was credited /

10. Insurance Expense account was debited /

11. Notes Payable account was debited /

12. Accounts Receivable account was credited /

13. Cash in Bank account was credited /

14. Professional Income account was credited /

15. Unearned Service Income was credited /

 4-8

Effects of Accounts Balances

DEBIT CREDIT

1. Casiano Rebucas, Capital account increased by P1,500 /

2. Prepaid Insurance account decreased by P3,000 /

3. Accounts Receivable account increased by P300 /

4. Accounts Payable account decreased by P8,450 /

5. Cash in Bank account decreased by P8,450 /

6. Accounts Payable account increased by P10,050 /

7. Accounts Receivable account decreased P500 /

8. Rent Expense account increase by P250 /

9. Service Income account increased by P700 /

10. Salaries expense account increased by P5,000 /

11. Notes Payable account increased by P9,750 /

12. Notes Receivable account decrease by P450 /

13. Building account increased by P45,000 /

14. Unused Supplies account decreased by P2,450 /

15. Casiano Rebucas, Drawing account increased by P800 /

 4-11

Paired Transactions for Analysis

A1. Debit – Cash

Credit – Lacson, Capital

A2. Debit – Cash

Credit – Lacson, Drawing

B1. Debit – Supplies

Credit – Accounts Payable

B2. Debit – Accounts Payable

Credit – Cash

C1. Debit – Accounts Receivable

Credit – Service Income

C2. Debit – Cash

Credit – Accounts Receivable

D1. Debit – Accounts Receivable

Credit – Equipment

D2. Debit – Cash

Credit – Accounts Receivable

E1. Debit – Cash

Credit – Notes Payable

E2. Debit – Notes Payable

Credit – Cash

F1. Debit – Notes Receivable

Credit – Service Income

F2. Debit – Cash

Credit – Notes Receivable

G1. Debit – Equipment

Credit – Accounts Payable

G2. Debit – Accounts Payable

Credit – Cash
H1. Debit – Notes Receivable

Credit – Cash

H2. Debit – Cash

Credit – Notes Receivable