WHOLE BRAIN LEARNING SYSTEM

OUTCOME-BASED EDUCATION
TECHNICAL VOCATIONAL EDUCATION GRADE
ENTREPRENEURSHIP 10

4
LEARNING QUARTER

MODULE WEEK 1-4

WBLS-OBE CG-Aligned Self-Learning Module TVE 10 0

 MODULE
IN
ENTREPRENEURSHIP
GRADE 10

QUARTER 4
WEEK 1-4

PREPARING AND MAINTAINING FINANCIAL

RECORDS AND REPORTS
Development Team
Writer: Michelle R. Quimno
Editor: Eliza G. Salvador
Reviewer: Eliza G. Salvador
Layout Artist: Jhone Terence C. Marucut
Management Team: Vilma D. Eda Arnel S. Bandiola
Lourdes B. Arucan Juanito V. Labao
Marju R. Miguel

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 What I Need to Know

This module deals with “Preparing and maintaining financial records and
reports”. This module contains training materials and activities for you to complete.

The unit of competency “Preparing and maintaining financial records and

reports” contains the knowledge, skills and attitudes required for the course
Entrepreneurship.

You are required to go through a series of learning activities in order to complete

each of the learning outcomes of the module. Follow these activities on your own and
answer the Self-Check at the end of each learning activity.

Content Standard:
The learner demonstrates understanding on preparing and maintaining financial
records and reports.

Performance Standard:
The learners prepare financial statement of the business.

Learning Objective/s:
1. Differentiate accounting from bookkeeping.
2. Appreciate the importance of record keeping to the
business.
3. Understand the rules of debit and credit

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 What I Know

PRETEST:
I. MULTIPLE CHOICE: Read the statements carefully and choose the correct
answer from the given choices in each item. Write the letter of your choice on
a separate answer sheet.

1. It is known as the language of business.

A. Accounting B. Bookkeeping
C. Transaction D. Posting

2. It refers to recording business and event in a systematic and chronological

manner.
A. Bookkeeping B. Accounting
C. Transaction D. Liability

3. It is written on the left side of an account journal

A. debit B. credit
C. profit D. sales

4. It refers to the financial position of the business that shows the assets,
liabilities, and owners’ equity.
A. financial statement B. balance sheet
C. income statement D. journalizing

5. It is a report that summarizes the revenue items, expenses and profit/loss

for the period.
A. expense B. deprecation
C. income statement D. balance sheet

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Lesson
Preparing and Maintaining
1-4 Financial Records and Reports

What’s In

WORDS TO STUDY

Assets are things of value owned by the business

Receivables are summarized accounts maintained with debtors and creditors.

Capital is an excess of assets over liabilities

Balance Sheet is the formal statement of the financial position of the business that
shows the assets, liabilities and owner’s equity.

Income statement is a report that summarizes the revenue items, expense and the
difference between, which is called net profit/loss for the period.

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 What’s New

An entrepreneur’s growing concern is to continuously learn and

understand the activities of his or her business. The cash movement, if properly
recorded and kept, can clearly describe the total business picture.

Bookkeeping can guide you in your tasks. The primary rule is to understand the
mechanics of financial records.

The accounting function prepares a record of the financial affairs of the

company. Accounting also includes the interpretation of the numbers prepared by the
bookkeeper to determine the financial health of the firm. It also control functions of the
company.

For a start up business, bookkeeping and accounting are functions within the
finance field. Bookkeepers are responsible for recording and classifying the accounting
transactions of the business firm and techniques involving recording those transactions.
The accountant takes the next steps and analyzes, reviews, reports, and interprets
financial information of the company.

What Is It

Preparing and Maintaining Financial Records and Reports

Accounting
▪ The language of business
▪ The art of recording, classifying, summarizing in a significant manner and in
terms of money, those transactions and events which are part, at least of a
financial character and interpreted as the results thereof.

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Bookkeeping
▪ The act of recording business and events in systematic and chronological
manner. The person involved in this task is the bookkeeper. His main job is to
record and process data in the accounting system

Using the example on the below, let us illustrate the ‘Dual Aspect Convention of
Bookkeeping:

Let us assume that the material is Php.1,000.00 per kilo and Php.50.00
per meter so that with these values, you can now sum up in monetary terms
that you bought goods amounting to Php. 13,850.00 (13 kilos X
Php.1,000.00 plus 17 meters X Php 50.00.
It is clear therefore, that the common basis for every bookkeeping
record is the monetary value.

The “Dual Aspect” Convention

The convention is in fact at the very heart of a bookkeeping system.

Bert brings a kilo of chicken to the market and in exchange he buys T-

shirt from Rene.
Each of the parties in the transaction ‘received’ a certain economic
value and ‘gave’ an identical value.

Bert ‘received’ T-shirt and “Gave” Rene ‘received’ a kilo of

a kilo of chicken chicken and “Gave” T-shirt

After the previous example let us assume that Bert buys a t-shirt from Rene for
Php.130.00. We can see here that although we are concerned with a single commercial
transaction (from Bert’s point of view – buying chicken for cash, from Rene’s point of
view – selling chicken for cash.) We are still left with the ‘dual aspect.’

Bert ‘received’ goods (T-shirt) and Rene ‘received’ money and

‘Gave’ money. ‘Gave’ goods (T-shirt)

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 In other words, the language of bookkeeping tends to record a single
transaction in dual manner. One, what the person ‘received’ and the second,
what that same person ‘gave’.
In bookkeeping, each single commercial transaction is recorded
twice. On the ‘received’ side and then again on the ‘Gave’ side.

Debit and Credit Rule

Debit is on the left side of an account journal.
Credit is the right side of an account journal.

Type of To Debit the Account To Credit the Account

Account

1. Personal When the person in whose When the person in whose

name the account is kept is name the account is kept is in
in debt to us. credit with us.

2. Real When the account received When the account gives us

money or equivalent money equivalent.

3. Profit and Any account that ends with Any account that ends with
Loss the words “Expense the words ‘Revenue Account”.
Accounts”

COMPREHENSIVE EXAMPLE
1.1 We bought goods from GMC Grocery for an overall sum of Php.1000.00
(invoice no.123)
2.1 We sold part of the goods for Php.600.00 cash (receipt no.1950).
3.1 We paid Php.200.00 cash for electricity expenses (expense voucher
no.001)
4.1 We bought a stone from Rene for Php.20,000.00 (invoice no.953)
5.1 We rented the store out for Php.700.00 cash invoice no. 001

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In the first part of the solution, the records will be presented in the form of a “T
Account” and they will be presented textually in the second part.

T Accounts

Good Accounts GMC Grocery

Debit Credit Debit Credit
(1) 1,000 600 (2) 1,000 (1)

Cash Accounts Electricity Expenses

Debit Credit Debit Credit
(2) 600 200 (3) (3) 200
(5) 700

Store Rental Account

Debit Credit
700 (5)

Stone Accounts Rene Accounts

Debit Credit Debit Credit

(4) 20,000 20,000 (4)

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 Store Rental Account
Debit Credit
700 (5)

Textual Records (Journal Entries)

Debit Credit

(1) Debit: Goods Account 1,000

Credit: GMC Grocery Account
1,000
1.1 Purchase on credit invoice 123

(2) Debit: Cash Account 600

Credit: Goods Account
600
2.1 Cash Sales Receipt invoice
no.123

(3) Debit: Electricity Expenses 200

Credit: Cash
200
3.1 Cash Payment, expense
voucher 001

(4) Debit: Stone Account 20,000

Credit: Rene Account
20,000
4.1 Purchase of Stone Account 953

(5) Debit: Cash 700

Credit: Income from Rental
700
5.1 Cash rental account

TOTAL: Php. 22,500 22,500

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Event 1
▪ The goods account ( a real account) is debited. An account was received
(no.1 in the table)
▪ The GMC Grocery Account (a personal account) is credited to receive
money (No. 2 in the table)

Event 2

▪ The cash Account (a real Account) is debited – cash was received. No.2
in the table
▪ The goods account (a real account) is credited – the store issue goods
(no. 2 in the table)
Event 3

▪ The electricity expenses (a profit and loss account) is debited – every

expense account is debited (no. 3 in the table)

Event 4

▪ The store account (a real account) is debited. The transaction received a

monetary value (No. 2 in the table).
▪ The Rene account (a personal account) is credited – according to no.1
and 2.

Event 5

▪ The income from the mental account ( profit and loss account) is credited
– all receipts are a credit (No.3 in the table)
▪ The cash account is debited – (No. 2 in the table)

❖ It is easy to remember that every expense account is debited (the expense is a

negative matter from an economic point of view and it is a debt of the business).

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 ❖ Similarly, all receipts are a credit (a credit is something positive from an
economic point of view and it is to the credit of the business.

Journalizing Case Problem

FOODCATCH CATERING SERVICES

Barangay 46, Nalbo Laoag City

Business Transaction
Date:

2008
August 1 Cash Investment amounting to- Php.10,000.00
Received Group Amounting to- Php.25,000.00

Investment Canteen – equipment- Php.15,000.00

Paid Permit and License Php.500.00
Purchase Merchandise Php.25,000.00

Transportation Php150.00
And only 90% of the amount purchased was paid in cash

August 2-6 : Sold cooked food and merchandise for Php.30,000.00 only 95% was
collected in cash.

August 7 : Purchased merchandise for Php.20, 000.00 in cash and paid

Php.100.00 for transportation.

August 8 – 15 : Sold merchandise for Php.25,000.00 in cash offered snacks to visitors

amounting to Php.200.00 and recorded it as sales.
Collected Php.1500.00 of account receivables.

Paid account amounting to Php.2,000.00.

Paid salaries and wage manager/cashier and sales ladies
Php.8,000.00

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 An inventory merchandise amounted to Php.13,000.00
August 16 - 30 : Purchase liquefied petroleum amounting to Php.350.00.

Sold Merchandise for Php.50.000.00 only 95% were collected in

cash.
Purchase raw food and merchandise Php.40,000.00 and paid
Php.200.00 transportation. Only 0% of the amount purchased
were paid in cash.

August 31 : Received electric and water bills for the month

amounting to Php.1,200.00
Sold cooked food and merchandise for

Php.10,500.00 in cash
Collected accounts receivables amounting to Php.2,000.00.
Paid trade account amounting to Php.3,500.00.

Paid salaries of manager/cashier and sales lady Php8,000.00

Bought calculator Php.1,000.00 recorded as canteen
equipment.

Snacks offered to visitors was charged to capital account.

Received building rental Php1,500.00
Depreciation of canteen equipment Php.250.00 was recognized
Inventory of Merchandise and raw food were value
Php.19,345.

PREPARATION OF FINANCIAL STATEMENTS

FINANCIAL STATEMENTS
▪ Balance Sheet
▪ Income Statement
▪ Statement of Cash Receipt and Disbursement

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 BALANCE SHEET ACCOUNTS
▪ Cash reported in the balance shows in your cash book, with the
total cash on hand and the bank deposits
▪ Receivables or payables – are summarized from the accounts
maintained with debtors and creditors.
▪ Merchandise and supplies inventory – are determined by having
physical count.
▪ Capital is simply the excess of assets over liabilities
▪ Assets – are things of value owned by a business
o Assets are normally classified as current, fixed and other
assets.

▪ Current assets – those consists of cash and other

assets that in normal operation one expects to be
converted into cash or consumed during the normal
operations.
▪ Fixed assets – are assets that are required for long
term use in the business.
▪ Other assets – those include patents, goodwill etc.,
which do not come within the above definitions
▪ Owner’s equity – refers to the interest of up – owner
or proprietors in the assets of a business.

INCOME STATEMENT

❖ Sales – the amount to be reported for sales consist of the total of your cash
sales on the account.

❖ Cost of Goods Sold – the inventory balance shown on in the balance sheet is
reported in the profit and loss statement and is listed at the beginning of
inventory.

❖ Expense Items – an expense balance computed from the analysis of cash

payment and comparative balance sheet data.

❖ Revenue items – a revenue balance computed from the analysis of cash

receipts ad comparative balance sheet.

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❖ Depreciation – the charge for the depreciation account, to be recognized in the
profit and loss statement, required a special analysis of balance sheets as well
as cash data.

What’s More

Activity 1
Direction: Classify the following as: A – assets, L – Liabilities,
C – Capital, R – Revenue, and E – Expenses.

Accounts Classification

1. G.M. Capital

2. Land

3. Cash

4. Building

5. Accounts receivables

6. Delivery truck

7. Service Income

8. Sales

9. Prepaid Insurance

10. Accounts Payable

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 What I Have Learned

LET US REMEMBER:

▪ The law requires that some forms of records must be kept by all businesses.
▪ In the time of keen competition, rising cost and increasing taxes, there can be
no alternative to record keeping.
▪ There must be complete accounting of all business transactions to efficiently
handle purchases and sales inventory control credit and collection,
depreciation and other expenses.

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 What I Can Do

UNDERSTAND
(Creative Constructed Response)

WRTITTEN OUTPUT: CREATIVE CONSTRUCTED RESPONSE TEST ITEM:

LEARNING COMPETENCY: (U) Understand accounting and bookkeeping .

Direction: Read the given activity and answer the questions below it. Your answers
should contain the given content in the sample prompt/outline. Your output will be
graded using the rubric below.

Activity: Identify me!

Direction: Search for an example of an income statement and balance sheet in

the internet or business magazines. Copy and try to identify what are some of the
components of the assets, liabilities, equity, revenues, cost of goods sold, and
expenses. Write your answers on a sheet of paper.

QUESTION AND CREATIVE WRITTEN OUTPUT:

1. What is an income statement and what does it consist?

2. What is a balance sheet and what does it consist?
3. What are the components of assets, liabilities, equity, revenues, cost of goods sold
and expenses?

SAMPLE PROMPTS/OUTLINE

1. Give the meaning of an income statement and identify the components.

2. Give the meaning of a balance sheet and identify the components.
3. Give example of assets, liabilities, equity, revenues, cost of goods sold and
expenses.

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STUDENT’S WRITTEN OUTPUT: You present your answers through an essay.

CREATIVE CONSTRUCTED RESPONSE HOLISTIC RUBRIC:

RATING DESCRIPTION
4 Exceptionally clear and easy to follow .The explanation posed and
methods used are advanced, thorough, comprehensive, and highly
relevant.
3 Generally clear and able to follow. The explanation posed and methods
used are appropriate, substantial and generally relevant.
2 Lacks clarity and difficult to follow .The explanation posed and methods
used are somewhat simple, partial or not comprehensive, and somewhat
relevant.
1 Unclear and impossible to follow. The explanation posed and methods used
are inadequate and irrelevant which could lead to misunderstanding or
serious misconception.
0 Unclear, irrelevant, poor explanation.

Note: This will serve as your Summative test.

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PERFORMANCE TASK (1 PRODUCT)

PERFORMANCE STANDARD: Students should know the importance of using

balance sheet and income statement in business.

LEARNING COMPETENCY: (U) Prepare a cash flow statement and income statement
of a chosen business.

Direction: Read the given situation. Then do the task given below. Your output will be
graded using the rubric below.

SITUATION:

Michelle owns a beauty salon located in Laoag City and at the same time a
government employee. She only visit the shop every weekend so she cannot manage
the shop everyday. She hired a manager to be at her shoes in managing the shop. At
first the income is great but as the days go by sales and income of the shop is
decreasing. Her friend suggested her to make a cash flow statement and income
statement of her business so she can see their everyday transactions even though she
is not always in the shop.
Help Michelle identify what are her cash in flow, cash out flow, and sources of
revenue, cost of the cosmetics they used and expenses with the following transactions
occurred:
Date:
2021

May 16 Michelle had an additional cash investment amounting to Php 50,00.00

May 17 Collected the amount of Php 1, 500.00 from Sharon Mabolo.
May 18 Acquired an additional beauty supplies paid in cash with the amount of Php
50,000.00
May 19 Received Php 10,000.00 worth for service rendered.
May 20 Michelle paid Php 1,000.00 for Permit/License.

May 21 Partial payment for an existing liability to HBC for Php 7, 299.50.
May 22 Collected account receivables in full amounting to Php 2,560.00
May 23 It was found out that the hands spa machine has been depreciated in a

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straight-line method for Php 1,250.00 for this month of May.
May 24 Received the amount of Php 36,000.00 worth of service rendered to Miss
Ilocos Norte Candidates.
May 25 Payment of electricity for Php 5,000.00.
May 26 The Government grants a forgivable loans to Michelle’s shop for Php
3,400.00
May 27 The employees had incurred Php 200.00 for transportation.
May 28 Paid rent in advance for the month of May to July for Php 21,000.00

May 29 Acquisition of Rebond treatment supplies for Php 4,699.00

May 30 Paid salaries for Php 18,000 and wages of Php 1,500.00 for the helper.

Michelle’s Beautiful Spa

Cash Flow Statement

For the Period

May 16, 2021- May 30, 2021

May 16-30, 2021

CASH FLOW

Cash investment

Cash Grants

Cash Sales

Collection of Receivables

TOTAL CASH FLOWS

LESS: Cash Outflows

Cash Purchases

Permit & License

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 Electricity

Wages

Salary

Rental

Payment of Payables

TOTAL CASH OUTFLOWS

Net Cash Inflows (Outflows)

Add: Cash balance beg.

Cash Balance Ending

Michelle’s Beautiful Spa

Income Statement

For the Period

May 16, 2021- May 30, 2021

May 16-30, 2021

Service Income/Service Revenue

Less Cost of cosmetics and other supplies

Add: Purchases

Transportation

Wages

Total

Gross Profit

Less: Operating Expenses

Electricity/Water

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 Permit/License

Salary

Rental

Depreciation

Total Operating Expenses

Net Income for the Period

GOAL: Make a cash flow statement and income statement for a business.

CRITERIA 4 3 2 1 RATING

OUTSTAND SATISFACT DEVELOPI BEGINNING

ING ORY NG

Correction All entries Two to Five Six to Ten All entries are
of Entries are correct entries are entries are wrong
wrong wrong

Content of Presented The content The content The content is

the cash the content is clear is vague.
flow very clearly inconsistent
statement in some
and parts.
income
statement

Effective The student The student The student The student

Written writes in a writes writes on a showed no
Communic clear and thoughts in organized organization
ation organized an manner but and
manner understanda ideas is not consideration
ble manner clear in written log

TOTAL:

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 Assessment

POST TEST

I. MULTIPLE CHOICE: Read the statements carefully and choose the

correct answer from the given choices in each item. Write the letter of your
choice on a separate answer sheet.

1. It refers to the things of value owned by a business.

A. capital B. inventory
C. cash D. asset

2. It is the amount of merchandise sold and valued at selling price.

A. sales B. receivables
C. purchase D. proprietorship

3. It refers to the amount to be collected or received from a debtor in the

future or at a later date.
A. receivables B. net profit
C. gross profit D. expenses

4. It consists of cash and other assets, that in the normal operations are
expected to be converted into cash.
A. fixed assets B. current assets
C. other assets D. all of the above

5. It is the expense balance computed from the analysis of cash payment

and comparative balance sheet data.
A. Depreciation C. Revenue items
B. Expenses items D. All of the above

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23 TVE 10 Self-Learning Module CG-Aligned WBLS-OBE
PRE-TEST POST TEST
1. A 1. D
2. A 2. A
3. A 3. A
4. B 4. B
5. C 5. B
Answer Key
References

Camposano, Jorge A. Entrepreneurship for Modern Business Philippines,

Copyright 2006

Technology and Home Economics II SEDP Textbook First Edition 1991

Saguinsin,

Artemio T. Bookkeeping for beginners with Taxation Law, Philippine

Copyright 2006

Feliciano Fajardo R. Entrepreneurship, Copyright 1994

Pamphlets from DTI on Bookkeeping

CBLM Entrepreneurship Fourth Year

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 For inquiries or feedback, please write or call:

Department of Education – Schools Division of Laoag City

Curriculum Implementation Division
Brgy. 23 San Matias, Laoag City, 2900
Contact Number: (077)-771-3678
Email Address: laoag.city@deped.gov.ph

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