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TRANSACTIONS
COC1
Prepare Chart Of Accounts
 Nature of business is determined based
on client information
 List of asset, liability, equity, income,
and expense account titles are prepared
in accordance with industry practices
 Accounting manual is prepared in
accordance with industry practice
 Business
May include but are not limited to:

A. Nature of Business:
• Manufacturing
• Trading
• Services

B. Forms of Organization:
• Single proprietorship
• Partnership
• Corporation
CHART OF ACCOUNTS
The accounts in the chart are usually
arranged in the following order: Assets,
Liabilities, Equity, Revenue, Gains, Expenses,
and Losses. An example of account Coding
follows:
Accounts Account
Number
Assets and Contra-Asset Accounts 001-399

Liabilities 400-499

Equity, Drawing and Summary Accounts 500-599

Income and contra revenue accounts 600-699

Expenses 700-899
 REVIEW YOUR
ACCOUNTING ELEMENTS
Account Titles/Names
 ASSETS
CURRENT ASSETS
• Cash NON-CURRENT ASSETS

• Accounts Receivable • Land

• Notes Receivable • Building
• Accrued Interest • Furniture and
Receivable Fixtures
• Inventories • Equipment
• Prepaid • Machineries
Supplies/Supplies
 CONTRA-ASSET VALUATION
• Allowance for Doubtful Accounts
- the amount estimated uncollectible o
receivables in compliance with the principle of
conservatism.

• Accumulated Depreciation
- the aggregated periodic costs of using a
depreciable plant asset.
 OTHER ASSET ACCOUNTS
• Purchase Returns and Allowances
- This account title is used to record returned
goods by the business to the supplier.

• Purchase Discounts
- This account title is used to record discounts
on purchases of the business from the supplier.
 LIABILITIES
CURRENT LIABILITIES
• Accounts Payable NON-CURRENT
LIABILITIES
• Notes Payable
• It comprises those
• Accrued Interest Payable
that does not meet
• SSS Premium Payable
the criteria of a
• PhilHealth Contribution current long-term
Payable liability. Generally,
• Pag-ibig Contribution it comprises the
Payable portion payable
• Withholding Tax Payable beyond one year of
• Expanded Withholding Tax a long-term liability.
Payable
 EQUITY
• OWNER’S CAPITAL
- for Sole Proprietorship
• PARTNER’S CAPITAL
- for Partnership
• SHAREHOLDERS’ CAPITAL
- for Corporation

***OWNER’S DRAWING – To record taken

amount by the owner for personal use.
 TAKE NOTE:
• Always specify the name of the owner/
partner for the equity account title.
Jesusa, Capital
Jesusa, Partner Kura, Partner

• Follow your Chart of Accounts for the

Account Titles and Code/Number.
 REVENUE ACCOUNTS
• Sales
• Service Income
• Professional Fees
• Interest Income
• Rent Income/ Rent
• Gain on Sale of Other Assets
 EXPENSE ACCOUNTS
• Cost Of Sales/ Cost of Goods Sold
• Supplies Expense
• Salaries and Wages Expense
• Insurance Expense
• Taxes and Licenses Expense
 ESTIMATED EXPENSES
• Doubtful Accounts Expense
The estimated amount of losses from
uncollectible accounts arising from credit
sales of the current period. Also called: Bad
Debts Expense/ Uncollectible Account
Expense.
• Depreciation Expense
Represents the current periodic cost for
using depreciable plan assets.
 OTHER ACCOUNTS (Partnership
And Corporation)

• Dividends
• Retained Earnings
• Partners, Capital (Partner, Capital)
• Shareholders’ Equity
Analyze Documents

 Documents are gathered, checked and

verified in accordance with verification
and validation processes

 Account titles are selected in

accordance with standard selection
processes
 SOURCE DOCUMENTS
These are evidential matters, forms, or
legal/official papers that serve to support
the underlying economic transactions
recorded in the accounting books. They
ensure faithful representation of financial
information.

Note: No data must be recorded in the

accounting books of accounts without
supporting documents and approval of
recording by authorized officer of an entity.
 Information below should be present
before recording the transaction:
• Date
• Document and number
• Name and address of the business firm
• Name of the other party involved in the
transaction
• Amounts in words
• Amounts in figures
• Signature of the person who prepared and/or
approved the business transactions
• Signature of the other party involved.
 Official Receipt
This is a document which gives
evidence to a transaction involving
the receipt of cash. The documents
gives information on the amount of
cash received, the person or party
from whom cash was received, the
date of receipt and the reason of such
receipt.
 Sample: OFFICIAL RECEIPT
OFFICIAL RECEIPT
Official Receipt No.: 1005 Date of Issue: September 13, 2020

Name of Customer: JOJO CORPORATION

Paid P40, 800.00 in settlement of the following:

Items Amount Paid In:

VATable Purchases 40, 000.00
Ò Cash
Add: VAT 800.00 Ò Cheque

Total Amount Due 40, 800.00

Issued By: BABA FIRM Received By: JOJO CORPORATION

 Checks
This is a written order to bank
(drawee) by a depositor (drawer) to
pay the amount specified from the
checking account to the person
named in the check (payee). This is
prepared whenever payment is to be
made from cash in bank.
 Sample: CHECK/CHEQUE
Check No.: 00000001
JOJO CORPORATION
JL253-D, Lili Street, Layne City Date: September 04, 2020
VAT Reg. TIN: 023-123-250-0000

Pay to the Order of: LL LEASING l 10, 000.00

Ten Thousand Only l In Php

BB BANK
Single Street, Gapan City
Tel. No.: (001)-2502-45456
____
Authorized Signature
 Statement of Account
A bill presented to a client or a
customer by a creditor requesting
payment of service rendered or goods
sold on account. It may also
represent a bill sent by utility,
telecommunications, and credit card
companies to inform customers of
the amount due to them for services.
 Sample: STATEMENT OF ACCOUNT
STATEMENT OF ACCOUNT
No. 305

Billed to: JOJO CORPORATION Statement For: August 15- September 15, 2020
Date Issued: September 17, 2020
Particulars Amount
P5, 000.00
Water
Inclusive of VAT: P535.00
P500.00
Electricity
Inclusive of VAT: P535.00
Total Amount Due P10, 000.00

Issued By: LL LEASING

 Sales Invoice/ Purchase Invoice
After a sale has taken place, the seller issues a
business form called the invoice. The invoice
shows information about the seller and the
buyer, terms of sale, list of articles sold, their unit
price and the total amount due including the
Value-Added-Tax (VAT) if applicable. The
invoice serves as the evidence of the sale
transactions that has taken place. From the
standpoint of then seller, the invoice is a sales
invoice. The same document from the point of
view of the buyer is called the purchase invoice.
Sample: PURCHASE INVOICE
PURCHASE INVOICE
Invoice Number: 004 Date Issued: September 27, 2020

Name of Customer: JOJO CORPORATION

Items Amount
Issued By: JANJAN STORE
VATable Supplies 4, 500.00
Received By: JOJO CORPORATION
Add: VAT 100.00
Total Amount Due 4, 600.00
Sample: SALES INVOICE
SALES INVOICE
Invoice Number: 021 Date Issued: September 03, 2020

Name of Customer: ANA

Items Amount
Issued By: JOJO CORPORATION
VATable Sales 50, 000.00
Received By: ANA
Add: VAT 1, 200.00
Total Amount Due 51, 200.00
 Check Voucher
This is a document which serves to
recognize a liability and authorize the
disbursement of cash through the use of
check.
 Sample: CHECK VOUCHER
JOJO CORPORATION
JL253-D, Lili Street, Layne City
VAT Reg. TIN: 023-123-250-0000

CHECK VOUCHER
Check Voucher No. 303
Check Number: 00000003
Date: September 06, 2020
Pay to: BIR OFFICE 2
Description Amount
Withholding Tax Payable from Last Month P500.00
 Cash Voucher
This is a document which serves to
recognize a liability and authorize
the disbursement of cash in payment
thereof.
Sample: CASH VOUCHER
 Promissory note
Is a written promise made by a
maker (debtor) promising to pay the
payee (creditor) or a certain sum in
money at a fixed or determinable
future time.
 Sample: PROMISSORY NOTE

PROMISSORY NOTE

I, Jeny Fur promise to pay Mari Mar the sum of Two Pesos (PHP2.00) on or
before July 1, 2025 in payment for the puto sold to me on account on July 1,
2021.

Made by:

JENY FUR (sgd)

Acknowledged by:

MARI MAR (sgd)

 Bank Deposit Slip
When money is deposited with the
bank, the bank deposit slip is filled
up showing the date, account
number, name of the depositor,
nature of the deposit (cash or check)
and amount.
Sample: BANK DEPOSIT SLIP
 Return Report for returned
items. Sample:
RETURN REPORT

To: JOJO CORPORATION From: BA SUPPLIES

Credit Note No.: 0401

Invoice Number: 003

We credit your account for the following:

Particulars Amount
Returned merchandises purchased on September
P500.00
21, 2020.
Inclusive Of VAT: 60
(Reason for returns: Defective)
Total P500.00

Date of Return: March 24, 2020

Prepare Journal Entry
• Journals are prepared in accordance with industry
practice and generally accepted accounting
principles/Philippine Financial Reporting Standards for
transactions and events.
• Debit account titles are determined in accordance with
chart of accounts
• Credit account titles are determined in accordance with
chart of accounts
• Explanation to journal entry is prepared in accordance
with the nature of transaction
• Journal entries are prepared with 100% accuracy
 RULES OF DEBIT AND CREDIT
Transactions are exchanges of values. For
every value received, there is a value parted
with. Therefore, in every transaction, there is a
dual or double effect- receiving (debit) and
giving (credit) of value – that effects at least
two accounts which would either increase or
decrease. This method is known as Double
Entry Bookkeeping System.
 To Summarize the Concept of
Double Entry Bookkeeping:

Value Received = Value Parted With

Left Side = Right Side
Debit = Credit

Debit (DR) – Debit Record

Credit (CR) – Credit Record
 NORMAL BALANCES
ASSETS = LIABILITIES + CAPITAL
( Debit ) = ( Credit )

Note: The increase on the value of the

account follows the normal balance.
The decrease is on the abnormal
balance (opposite of normal balance).
DEBIT an Amount CREDIT and Amount
 To increase and asset • To decrease a asset
 To decrease a liability • To increase a liability
 To decrease a capital • To increase a capital
 To increase drawings • To decrease a drawing
 To decrease and • To increase an
income income
 To increase an • To decrease an
expense expense
 To decrease a contra- • To increase a contra-
asset account asset
 To increase a contra- • To decrease a contra-
revenue revenue
 On Merchandising, there are two inventory
Accounting Systems:

Perpetual Periodic
A company maintains A company does not
a continuous record maintain a
of the changes of the continuous record of
physical quantities in the physical
its inventory. quantities (or costs)
of inventory on hand.
   Periodic Perpetual
 
Inventory System Inventory System
Dr: Purchases Dr: Merchandise
Recording Cr: Cash Inventory
Purchases Exp: To record Cr: Cash
on cash purchase of Exp: To record
goods. purchase of goods.

Dr: Purchases Dr: Merchandise

Recording Cr: Accounts Inventory
Purchases Payable Cr: Accounts
on account Exp: To record Payable
purchase of Exp: To record
goods. purchase of goods.
 Dr: Merchandise
Dr: Freight In
Inventory
To record Cr: Cash
Cr: Cash
freight on Exp: To record Exp: To record
purchases payment of payment of
freight.
freight.

To record Dr: Freight Out Dr: Freight Out

Cr: Cash Cr: Cash
payment
Exp: To record Exp: To record
of Freight payment of payment of
on sales freight. freight.
To record Dr: Cash Dr: Cash
received Cr: Purchase Cr: Merchandise
refund Return Inventory
from Exp: To record Exp: To record
supplier received refund. received refund.

Dr: Sales Returns Dr: Sales Returns

To record Cr: Cash Cr: Cash
refund to Exp: To record Exp: To record
customers refund to refund to
customer. customer.
 Dr: Accounts Dr: Accounts
To record Payable Payable
received Cr: Purchase Cr: Merchandise
Credit Return Inventory
from Exp: To record Exp: To record
supplies returns on returns on
purchases. purchases.

To record Dr: Sales Returns Dr: Sales Returns

Cr: Accounts Cr: Accounts
issued
Receivable Receivable
credit to Exp: To record Exp: To record
customers returns on sales. returns on sales.
 Dr: Cash
Cr: Sales
Exp: To record cash
sales.
Dr: Cash
 
To record Cr: Sales
Dr: Cost of Goods
cash sales Exp: To record Sold
cash sales.
Cr: Merchandise
Inventory
Exp: To record cost
of sales.
To record
physical
Dr: Merchandise
count of
Inventory, End
inventory Cr: Income
NO ENTRY
by the end Summary
of the
month
 PERPETUAL INVENTORY SYSTEM
(APRIL, 2018) 
1 The business, AUROM MART, was registered as a
single proprietorship with the Department of Trade and
Industry. Susan Chi invested P39, 000.00
2 Bought computer equipment for P10, 000.00 cash.
2 Bought merchandise on account from PURE Supply Co.,
P15, 900.00, terms 2/10, n/30.
3 Bought office supplies on cash basis for P700.00
4 Paid P200.00 freight on April 4 sale.
5 Sold Merchandise on account P15, 200. FOB
Destination, terms 2/10, n/30. The cost of sold
merchandises on account was P12, 200.00
 Chart of Accounts
Cash 101 Salaries Expense 450
Accounts Receivable 102 Advertising Expense 451
Office Supplies 103 Utilities Expense 452
Merchandise Inventory 104 Rent Expense 453
Merchandise Inventory, End 110 Freight Out 454
Office Equipment 120 Purchases 501
Accounts Payable 201 Purchase Returns 502
Notes Payable 203 Purchase Discounts 503
Chi, Capital 301 Freight In 504
Chi, Drawings 302 Cost of Goods Sold 550
Sales 401 Income Summary 551
Sales Returns 402 Inventory Shortage 601
Sales Discount 403 Inventory Overage 602
Date
April Particulars PR Debit Credit
2018
01 Cash 101 P39, 000.00  
301 P39, 000.00
Chi, Capital
To record initial
investment of Susan Chi.
02 Office Equipment 120 P10, 000.00  
101 P10, 000.00
Cash
To record purchase of
equipment.
02 Merchandise Inventory 104 P15, 900.00  
Accounts Payable 201 P15, 900.00
To record purchases,
terms 2/10, n/30.
03 Office Supplies 103 P700.00  
Cash 101 P700.00
To record purchase of
supplies.
04 Freight Out 454 P200.00  
Cash 101 P200.00
To record payment of
freight on sales.
04 Accounts Receivable 102 P15, 200.00  
Sales 401   P15, 200.00
To record sales, terms      
2/10. n/30.
       
Cost of Goods Sold 550 P12, 200.00  
Merchandise Inventory 103 P12, 200.00
To record cost of
sales.
 PERIODIC INVENTORY SYSTEM
(APRIL, 2018) 
1 The business, AUROM MART, was registered as a
single proprietorship with the Department of Trade and
Industry. Susan Chi invested P39, 000.00
2 Bought computer equipment for P10, 000.00 cash.
2 Bought merchandise on account from PURE Supply Co.,
P15, 900.00, terms 2/10, n/30.
3 Bought office supplies on cash basis for P700.00
4 Paid P200.00 freight on April 4 sale.
5 Sold Merchandise on account P15, 200. FOB
Destination, terms 2/10, n/30.
 Chart of Accounts
Cash 101 Salaries Expense 450
Accounts Receivable 102 Advertising Expense 451
Office Supplies 103 Utilities Expense 452
Merchandise Inventory 104 Rent Expense 453
Merchandise Inventory, End 110 Freight Out 454
Office Equipment 120 Purchases 501
Accounts Payable 201 Purchase Returns 502
Notes Payable 203 Purchase Discounts 503
Chi, Capital 301 Freight In 504
Chi, Drawings 302 Cost of Goods Sold 550
Sales 401 Income Summary 551
Sales Returns 402 Inventory Shortage 601
Sales Discount 403 Inventory Overage 602
Date
April Particulars PR Debit Credit
2018
01 Cash 101 P39, 000.00  
301 P39, 000.00
Chi, Capital
To record initial
investment of Susan Chi.

02 Office Equipment 120 P10, 000.00  

101 P10, 000.00
Cash
To record purchase of
equipment.
02 Purchases 104 P15, 900.00  
Accounts Payable 201 P15, 900.00
To record purchases,
terms 2/10, n/30.
03 Office Supplies 103 P700.00  
Cash 101 P700.00
To record purchase of
supplies.
04 Freight Out 454 P200.00  
Cash 101 P200.00
To record payment of
freight on sales.
04 Accounts Receivable 102 P15, 200.00  
Sales 401   P15, 200.00
To record sales, terms      
2/10. n/30.
     
 
 For SERVICING:
• There’s no inventory system applied.
• Recording of all transactions except for
income with different account title is
just the same with merchandising. Not
Sales but Service Income/Revenue or
Professional Income.
 ILLUSTRATION
January 1, 2020 : Jana received P10, 000.00
for laundry services rendered.

Dr: Service Income Php10, 000.00

Cr: Cash Php10, 000
Explanation: To record payment received
from service rendered.
 ILLUSTRATION
January 1, 2020 : Jana catered a laundry
services worth Php10, 000.00

Dr: Service Income Php10, 000.00

Cr: Accounts Receivable Php10, 000
Explanation: To record payment received
from service rendered.
 BOOKS OF ACCOUNTS
JOURNAL LEDGER
- Book of Original - Book of Final
Entry. Entry.

Types: Types:
• General Journal • General Ledger
• Special Journal • Subsidiary Ledger
 SPECIAL JOURNAL
MERCHANDISING SERVICING
• Sales Journal • Revenue Journal
• Purchase Journal • Cash Receipt
• Cash Receipt Journal Journal
• Cash Payment • Cash Payment
Journal Journal
• Etc.
• Etc.
 Sample: Purchase Journal
Date Input Accounts
Invoice Accounts P Purchases
  VAT Payable
No. Credited R Debit
2020 Debit (Credit)
             
             
             
             
             
             
  Total:          
    ( )   ( ) ( (
) )
 Sample: Sales Journal
Output Accounts
Date Invoi Sales
Accounts VAT Receivable
  ce PR  
Debited    
2020 No. Credit
Credit Debit
             
             
             
             
             
             
             
             
  Total:          
    ( )   ( ) ( ) ( )
  
 
 
 
 

 
 
Date 
2020

 
 
 
 
 
Official Receipt

 
 
No.

 
 
 
 
 
Invoice

 
Total:
No.

 
 
 
 
 

(
Accounts Credited

 
 
 
 
 
 

)  
 
PR

 
 
 
 
 

(
Accounts Receivable

 
Credit

)
 
 
 
 
 

(
 

)
Sales 
Credit
 
 
 
 
 

(
Output VAT 
 

)
Credit
 
 
 
 
 

Sales Discount
 
 

Debit
 
 
 
 
 

) (
Sample: Cash Receipt Journal

Cash  
 
 

Debit
)
  
 
 
 
Date 

 
 
2020

 
 
 
 

 
Check Voucher No.

 
 
 
 

 
l:
Check No.

  Tota
 
 
 
 

(
 
Accounts Debited

)
 
 
 
 

 
 
PR

 
 
 
 

(
Sundry

 
Debit/(Credit)

 
 
 
 

) (
 

)
Salaries Expenses
Debit
 
 
 
 

(
SSS, PH, Pag-IBIG Payable
  Debit/(Credit

)
 
 
 
 

(
 

) W. Tax Payable
Debit/(Credit
 
 
 
 

(
 

Accounts Payable
)

Debit
 
 
 
 

Purchase Discount
 

Credit
)
 
 
 
 

Cash 
Sample: Cash Disbursement Journal

( )

Credit
 Sample: Revenue Journal

Service Output Accounts

Date Invoice Accounts P
Income VAT Receivable
2020 No. Debited R
Credit Credit Debit
 
       
    ( )   ( ) ( ) ( )
JOURNALIZING TRANSACTIONS FOR
MERCHANDISING BUSINESS:

• If the two types of Journal is being used,

the General Ledger will be used to
record transactions that can’t be
recorded in the Special Journals.
• Special Journal should be used for
specific transactions on credit sales,
credit purchases, cash receipts, and cash
payments.
 JOURNALIZING TRANSACTIONS FOR
SERVICING BUSINESS:
• If the two types of Journal is being used, the
General Ledger will be used to record
transactions that can’t be recorded in the
Special Journals.
• Special Journal should be used for specific
transactions on service rendered on
account, cash receipts, and cash payments.
COC 1: JOURNALIZE TRANSACTION
Institutional Assessment
 Now, ARE YOU READY
TO PERFORM?
If YES: Prepare your Materials

If No: Read your NOTES send on Edmodo

(For extended lecture, you should be the one
asking about what’s not yet clear to you)