Common

Business
Transactions

Joy Anne Vicente

COMMON ACCOUNTING TRANSACTIONS
•Investment of the owner.
•Purchasing assets on cash or credit/on account.
•Selling of goods or performance of services.
•Payment of expenses
•Collection of accounts receivable
•Payment of accounts payable
 Investment of the owner.
Any “personal” asset brought by an owner to his business is considered as
investment.
Examples:

Clariz Sabado deposited P250,000 in a bank under the name of her business, “Crown Paper
Corporation”.
Cash P250,000
Sabado, Capital P250,000

Ranz Dungca brought in his business his set of personal computer in the amount of P50,000.
Computer Equipment P50,000
Dungca, Capital P50,000

Mhiko Sayson paid his business liabilities of P130,000 with his personal money.
Accounts Payable P130,000
Sayson, Capital
P130,000
Purchasing assets on cash or credit (on account).
Examples:

Purchased office table and chairs for P37,500.

Furniture & Fixtures 37,500
Cash 37,500
Purchased printer and scanner for P20,000 on account.
Office Equipment 20,000
Accounts Payable 20,000
Acquired supplies for P15,000, paying 50% down payment and the rest on account.
Supplies 15,000
Accounts Payable 7,500
Cash 7,500
Acquired a small building by issuing a 7% note for P500,000
Building 500,000
Notes Payable 500,000
Selling of goods or services.
PERFORMANCE/SALES = INCOME/REVENUE regardless if paid or not
Example:
Sold merchandise amounting to P7,200 for cash.
Cash P7,200
Sales Revenue P7,200

Performed services for P12,000.

Cash P12,000
Service Revenue P12,000

Billed customer for services performed, P3,500.

Accounts Receivable P3,500
Service Revenue P3,500

Performed services to a client on account, P5,000

Accounts Receivable P5,000
Services P5,000
 Payment of expenses
EXPENSES are recorded upon use/consumption REGARDLESS if paid or not

Example:

Paid electricity for P2,000.

Utilities Expense P2,000
Cash P2,000

Received a bill from Hermosa Water District amounting to P650.

Utilities Expense P650
Utilities Payable P650

Supplies on hand amounted to P200, the original amount of supplies is P1,000.

Supplies Expense P800
Supplies P800
Collection of accounts receivable

Collected P19,000 from credit customers.

Cash P19,000
Accounts Receivable P19,000

Received P5,000 from customers on account.

Cash P5,000
Accounts Receivable P5,000
Payment of accounts payable

Accounts Payable P12,000

Cash
P12,000