nd
2
Grading
st
1 Semester
REVIEW
What is a journal?
Why is it called the
“book of original entry?”
What is a general ledger?
Why is it called the
“book of final entry?”
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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JOURNAL
- is a chronological record (day-by-day) of
business transactions.
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- It is called the book of original entry O
because it is the accounting record in H
which financial transactions are first S
recorded.
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
LEDGER
- refers to the accounting book in which the accounts
and their related amounts as recorded in the journal
are posted to periodically.
- “book of final entry” because all the balances in the
ledger are used in the preparation of financial
statements.
- referred to as the T-Account because the basic form
of a ledger is like the letter “T”.
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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Many businesses maintain several types of
journals. The simplest type of journal is called the
general journal.
The General Journal
The process of recording a transaction is called
and
journalizing the transactions.
This type Special
of journal is Journal
unique among journals
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because it may be used to record any type of
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business transactions.
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
Recording all transactions in the general
journal is not cost effective and time
consuming. To speed up and simplify the
recording process, most businesses make use
N
of special journals.
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Each special journal is designed to record a
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particular type of transaction efficiently and
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quickly.
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
Examples of special N
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journals and their use
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
a.Cash Receipts Journal
– is used to record all cash that had
been received.
b. Cash Disbursements Journal
– is used to record all transactions
involving cash payments.
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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Sales Journal (Sales on Account Journal)
– is used to record all sales on credit on
account)
c.
d. Purchase Journal (Purchase on Account Journal)
– is used to record all purchases of
inventory n credit (or on account)
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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NORMAL BALANCE OF ACCOUNTS
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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CASH
MERCHANDISE INVENTORY
UNEARNED REVENUE
RENT EXPENSE
PURCHASE RETURNS AND ALLOWANCES
SALES
OWNER’S, CAPITAL
COST OF GOODS SOLD
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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ACCRUED INCOME
FREIGHT IN
SALARIES EXPENSE
OWNER’S DRAWING
PURCHASE DISCOUNT
NOTES PAYABLE
INTEREST EXPENSE
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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Practice Set No. 1
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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(Dayana Merchandising) Dayana Company had
the following transactions during December,
2018:
a.On Dec. 5, sold merchandise on credit for
Php5,000, terms 3/10, n/30. The items N
O
sold had a cost of Php3,500.
H
b.Purchased merchandise for cash, Php720,
S
on Dec. 13.
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
c. On Dec. 17, purchased merchandise on
credit for Php2,600, terms 1/20, n/30.
d. Issued a credit memorandum for Php300 N
to
a
customer
who
returned O
merchandise purchased last Dec. 5. The
H
returned items had a cost of Php210.
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
i. On Dec. 24, sold merchandise on credit for
Php7,000, terms 2/10, n/30. The items had a cost
of Php4,900.
j. On Dec. 31, received payment for merchandise
sold on December 24.
Required: Prepare the general journal entries to record these
transactions using a perpetual inventory system. (Record all
purchases initially at the gross invoice amount.)
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
-end-
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
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