Fundamentals of Accountancy, Business and Management 2 (Second Quarter)

Fundamentals of Accountancy,
Business and Management 2

(Second Quarter)
JENNIFER D. AMORA, MBA, CPA
Bureau of Curriculum Development

December 2017
MANAGEMENT OF LEARNING
DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT

COURSE DESCRIPTION
Fundamentals of Accountancy, Business

and Management 1
This is an introductory course in accounting, business

and management data analysis that will develop
students’ appreciation of accounting as language of
business and an understanding of basic accounting
concepts and principles that will help them analyze
business transactions.

COVERAGE OF THE SESSION
• Accounting Books – Journal Ledger

• Related Documents and Transactions Related to Bank
Deposits
• Bank Reconciliation Statement
• Income and Business Taxation


Deposits

BOOKS OF ACCOUNTS
• Journals (Book of Original Entry)

• General Journal
• Special Journals
• Ledger (Book of Final Entry)
• General Ledger
• Subsidiary Ledger

BOOKS OF ACCOUNTS
• General Journal
Year Particulars F Debit Credit
Month Day Debit Item
Debit Item
Credit Item
Credit Item
Explanation of the Nature
of Transactions

BOOKS OF ACCOUNTS
• General Ledger (Manual)

Year Particulars F Debit Year Particulars F Credit

BOOKS OF ACCOUNTS
• General Ledger (Computer Based)

Year Particulars F Debit Credit Balance
Month Day

BOOKS OF ACCOUNTS
• Subsidiary Ledger
Name of the Company:
Address:
Year Particulars F Debit Credit Balance
Month Day

RULES OF DEBITS AND CREDITS
ASSETS LIABILITIES EQUITY

= +
EXPENSES INCOME


Deposits

BANK ACCOUNTS
• SAVINGS ACCOUNT
• CHECKING ACCOUNT

BANK DOCUMENTS
• DEPOSIT SLIP
• WITHDRAWAL SLIP
• PASSBOOK
• CHECK

BANK DOCUMENTS
• DEPOSIT SLIP
• WITHDRAWAL SLIP
• PASSBOOK
• CHECK

DEPOSIT SLIP
• DEPOSIT SLIP
• WITHDRAWAL SLIP
• PASSBOOK
• CHECK

DEPOSIT SLIP

PASSBOOK

CHECK


Deposits

BANK STATEMENT

BANK RECONCILIATION
• It is a statement which brings into agreement the cash

balance per book (general ledger) and the cash balance per
bank (bank statement). It is usually prepared on a monthly
basis
There are three methods of doing bank reconciliation,

namely:
• Adjusted balance method
• Bank to book method
• Book to bank method
BANK RECONCILIATION
Reconciliation items for books balance are as follows:

• Credit memos
• Debit memos
• Errors
As a rule, all credit memos will increase the cash balance per
books while all debit memos will decrease cash balance per
books. Effects of errors to the cash balance per books vary
depending on the nature of the error committed.

BANK RECONCILIATION
Reconciliation items for cash balance per bank statement are as follows:
• Deposit in Transit
• Outstanding Checks
• Errors
As a rule, deposits in transit will increase the cash balance per books
while outstanding checks will decrease cash balance per books. Effects of
errors to the cash balance per books vary depending on the nature of the
error committed. It is to be noted, however, that certain types of
outstanding checks will not be a reconciling item such as certified checks.

BANK RECONCILIATION
ADJUSTED BALANCE METHOD
Book Balance, Beg Bank Balance, Beg

Add: Credit Memo Add: Deposit in Transit
Errors Errors
Less: Debit Memo Less: Outstanding Check
Errors Errors
Book Balance, End Bank Balance, End

BANK RECONCILIATION
BOOK TO BANK BANK TO BOOK
Book Balance Bank Balance

Add: CM Add: DIT
OC DM
Less: DM Less: OC
DIT CM
Bank Balance Book Balance

BANK RECONCILIATION. SAMPLE
CASH RECEIPTS JOURNAL
DATE PAYOR OR. NO. CASH
FEB 3 LUCIO JABILLES 0001 1,000
10 CARLITO BANZON 0002 4,000
18 PERRY PADAYAO 0003 8,000
26 ABE BENZONAN 0004 9,000
28 MAGDALENA LUNA 0005 3,000
TOTAL 25,000

CASH DISBURSEMENT JOURNAL
DATE PAYEE CV NO. CHECK NO. CASH IN BANK
FEB 8 ADELAIDA DALOCANOG 001 245751 3,000
12 REYNALDO DUPA 002 245752 1,000
16 NOEL MADELO 003 245753 2,000
24 ANA MARIE AGUHOB 004 245754 5,000
27 ZENON ROSALEM 004 245755 4,000
TOTAL

STATEMENT OF ACCOUNT
DATE CHECK NO WITHDRAWAL DEPOSIT BALANCE
FEB 1 BEG BALANCE 10,000
4 DM 1,265 8,735
4 1,000 9,735
10 245751 3,000 6,735
11 4,000 10,735
17 245753 2,000 8,735
19 8,000 16,735
21 SC 1,000 15,735
26 9,000 24,735
27 2457554 5,000 19,735


Deposits

WHAT IS TAXATION?
• Is an inherent power of the sovereignty by which a state

through legislature raises and imposes revenues to defray
the expenses of the government. No government can exist
or endure without any funds.

PRINCIPLES OF A SOUND TAX SYSTEM

PRIMARY PURPOSE OF TAXATION
• The primary purpose of taxation is to provide funds or

property with which to promote the general welfare and
protection of the country’s citizens and to support the
government in financing its multifarious activities.

SOURCES OF GROSS INCOME
• Compensation
• Gross income from conduct of trade or business or exercise of
profession
• Gains derived from dealings of property
• Interest
• Rent
• Royalties
• Dividends
• Annuities
• Prizes and winnings
• Pension
• Partner’s distributive share from general professional partnership

WHAT ARE TAXES
• Are enforced proportional contribution from persons and

property levied by the law making body of the state by
virtue of its sovereignty for the support of the government
and all public needs

ESSENTIAL ELEMENTS OF TAX
• Enforced contribution
• Proportionate in character
• Generally payable in money
• Levied in person, property on the exercise of right and
privilege
• Levied by the state which has jurisdiction over the subject
of taxation
• Levied by the lawmaking body
• Levied by public purposes

GROSS INCOME
• Is income reduced by exclusions. In other words, it is

income from taxable sources.

WHAT IS INCOME TAX
• Refers to the tax on net income realized on one taxable

year. Both individuals and corporations are required to file
and pay income taxes every 15th day of April of the
succeeding year.

WHO ARE REQUIRED TO FILE INCOME TAX RETURNS?
• Resident citizens receiving income from sources within or outside the Philippines:
• Employees deriving purely compensation income from 2 or more employers, concurrently or
successively at anytime during the taxable year;
• Employees deriving purely compensation income regardless of the amount, whether from a
single or several employers during the calendar year, the income tax of which has not been
withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or
refundable return;
• Self-employed individuals receiving income from the conduct of trade or business and/or
practice of profession;
• Individuals deriving mixed income, i.e., compensation income and income from the conduct of
trade or business and/or practice of profession;
• Individuals deriving other non-business, non-professional related income in addition to
compensation income not otherwise subject to a final tax;
• Individuals receiving purely compensation income from a single employer, although the income of
which has been correctly withheld, but whose spouse is not entitled to substituted filing; and
• Marginal income earners.

WHO ARE REQUIRED TO FILE INCOME TAX RETURNS?
• Non-resident citizens receiving income from sources within the Philippines

• Aliens, whether resident or not, receiving income from sources within the Philippines
• Corporation shall include partnerships, no matter how created or organized.
• Domestic corporations receiving income from sources within and outside the
Philippines
• Foreign corporations receiving income from sources within the Philippines
• Estates and trusts engaged in trade or business

WHO ARE NOT REQUIRED TO FILE INCOME TAX RETURNS?
• Minimum wage earners

• An individual whose gross compensation income
does not exceed his total personal and additional
exemption
• An individual whose exempt from income tax

TAXATION ON INDIVIDUALS
• Individuals who derived income generated out from

employer-employee relationship are called
compensation income earners.
• Personal Exemption
• 50,000
• Single, widow/widower, married
• Additional Exemption
• 25,000 for each dependent child not to exceed 4

QUALIFIED DEPENDENT CHILD
• Legitimate, illegitimate or legally adopted, who is:

• chiefly dependent upon and living with the
taxpayer
• Not more than 21 years of age, not married and
not gainfully employed
• Incapable of self-support because of mental or
physical defect regardless of age

ON TAXABLE INCOME
Basic Salary xx
Add: 13th month pay and other
bonuses (82,000 is exempt) xx
Gross Compensation Income xx
Deductions:
PHIC (xx)
Personal Exemption (xx)
Additional Exemptions (xx)
Taxable Income xx
ON TAX DUE
Taxable Income xx
x Schedular Tax Rates %
Income Tax Due xx

ON INCOME TAX PAYABLE
Income Tax Due xx

Less: Withholding Tax on
Compensation (xx)
Income Tax Due xx

Fundamentals of Accountancy, Business and Management 2 (Second Quarter)

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Fundamentals of Accountancy, Business and Management 2 (Second Quarter)

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Fundamentals of Accountancy,

Business and Management 2

Bureau of Curriculum Development

DEPARTMENT OF EDUCATION – BUREAU OF CURRICULUM DEVELOPMENT