Fundamentals of
Accountancy, Business
and Management 1
Quarter 3 – Module 7:
Journalizing
Fundamentals of Accountancy, Business and Management – Grade 11
Alternative Delivery Mode
Quarter 3 – Module 7: Journalizing
First Edition, 2020
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Fundamentals of
Accountancy, Business
and Management 1
Quarter 3 – Module 7:
Journalizing
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-bystep as you discover and understand the lesson prepared for you.
Pre-tests are provided to measure your prior knowledge on lessons in each
SLM. This will tell you if you need to proceed on completing this module or if you
need to ask your facilitator or your teacher’s assistance for better understanding of
the lesson. At the end of each module, you need to answer the post-test to self-check
your learning. Answer keys are provided for each activity and test. We trust that you
will be honest in using these.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
i
What I Need to Know
This module was designed and written with you in mind. It is here to help you
identify business and nonbusiness transactions, enumerate the types of business
documents, recite the rules of debit and credit, and apply these concepts in simple
cases.
At the end of this module, you are expected to learn how to record transactions
of a service business in the general journal (ABM_FABM11-IVa-d-30).
Specifically, you are expected to:
a. describe the nature of transactions in a service business;
b. identify the parts of a journal; and
c. record transactions of a service business in the general journal.
1
What I Know
Directions: Write TRUE if the statement is correct and FALSE if it is not. Write your
answers on a separate sheet of paper.
1. The journal is called the book of original entry where transactions are first
recorded.
2. Source documents are important in journalizing.
3. If the accountant mistakenly analyzed the transaction, it would result to a
wrong journal entry.
4. The peso sign is always written before every amount in a money column to
avoid confusion.
5. Journal entries require an explanation.
6. Transactions are journalized based on analysis as to their effects on assets,
liabilities, owner’s equity, revenue, and expense.
7. Only the two-column journal is being used in accounting.
8. Accountants must record the transaction with supporting documents such as
the official receipts, sales invoice, and payroll registers.
9. A compound entry has two or more debits and credits.
10.A transaction may be recorded on the day of recording and not on the day
when the transaction occurred.
2
Lesson
1
Journalizing
During your previous lessons in FABM1, you learned the different types of
businesses from the activities you accomplished. Those are service, merchandising
and manufacturing. Each type of business requires different accounting procedures.
In this module, you will start to apply accounting concepts and principles in
a service type of business. A service business offers intangible products to customers,
which means that there is no physical product involved. The owner earns income by
providing services that may benefit and satisfy the clients. Examples of these are
funeral services, nail salons, hospitals, and barbershops. It also includes the
rendering of services of professionals like doctors, lawyers, and accountants.
The succeeding parts of the lesson will cover the recording of business
transactions for a service business, which is called journalizing. This is just one of
the steps included in the accounting cycle given on the next page. These are the steps
in the accounting cycle that will be repeated once the accounting period ends:
1. Analyzing business transactions from source documents
2. Journalizing the business transactions
3. Posting journal entries to the ledger
4. Preparing trial balance
5. Journalizing and posting adjusting journal entries
6. Preparing adjusted trial balance
7. Preparing financial statements
8. Journalizing and posting closing entries
9. Preparing post-closing trial balance
10. Journalizing and posting reversing journal entries
3
What’s In
Directions: Record each transaction in the T-account. Write your answers on a
separate sheet of paper.
a.
The owner deposited P150,000 in his business.
b.
He bought office furniture for P12,300 in cash.
c.
He paid electricity bill for the month amounting to P1,080.
d.
He billed customers P13,000 for services on account.
4
e.
He paid P15,000 for the salaries of employees.
f.
He received P20,0000 for services rendered.
g.
He paid P8,400 for the monthly rental of the place.
h.
He withdrew P8,500 for personal use.
i.
He received P5,500
previously billed.
on
5
account
from customers
who were
j.
He paid P599 for telecommunications expense for the month.
Notes to the Teacher/Facilitator
This module prepares students to record transactions
in the general journal. The students will learn the parts of a journal
and apply the rules of debit and credit in recording in a journal.
What’s New
After analyzing business transactions using the rules of debit and credit, you
are now ready to take it to another level.
In this activity, accountants will analyze business documents whether they
have a financial impact or none in the business. The transactions which are only
financial in nature and have an economic benefit to the business and those which
may change assets, liabilities, and equity will be recorded.
6
Examples of financial transactions:
•
•
•
•
•
Payment of salaries of employees
Payment of electric, water, and telecommunication bills
Received payment from customers
Received payment from customers on account
Payment for purchasing furniture, equipment, and supplies
Examples of non-financial transactions:
•
•
•
•
Orientation of newly-hired employees
Posting of advertisements in the city
Awarding of recognition to the business
Hiring and terminating of employees
The following are examples of source documents:
1.
2.
3.
4.
Official receipt or cash receipt
Charge invoice or Sales invoice
Check or Cash voucher
Deposit slips
What Is It
The journal is the accountant’s tool in recording the day-to-day transactions.
It is called the book of original entry, where the accountant records first the business
transactions that occurred in the business. The recording of business transactions
is in sequential form.
Format
The journal consists of the following information:
1. Date. Enter the date when the transaction occurred. The year and month may
be omitted if the transaction occurred in the same year and month.
2. Account Titles and Explanation. First, enter the account to be debited. It
must be located at the extreme left of the first line, while the account to be
credited must be located at the next line which is slightly indented. A brief
description of the transaction is usually made on the line below the credit.
Generally, skip the line after each entry.
7
3. P.R. (Posting Reference). The chart of accounts provides account numbers
for each account title. The accountant will enter those account numbers in
this column once the account titles are used in a journal entry.
4. Debit. The amount to be debited is entered in this column.
5. Credit. The amount to be credited is entered in this column.
The example below shows a journal entry.
GENERAL JOURNAL
Date
2019
Dec.1
Account Titles and Explanation
Cash
Padilla, Capital
P.R.
Debit
101
P100,000
301
Credit
P100,000
To record initial Investment
A simple journal entry is a journal entry which has one debit account and
one credit account. The example below shows a simple journal entry.
GENERAL JOURNAL
Date
2019
Dec.1
Account Titles and Explanation
Accounts Payable
P.R.
Debit
Credit
201 P50,000
Cash
101
P50,000
To record payment of loans
A compound journal entry is a journal entry with more than one debit
account or more than one credit account, or both. The example below is a compound
journal entry.
GENERAL JOURNAL
Date
Particulars (Account Titles and
Explanation)
2019
Dec.1 Equipment
P.R.
Debit
Credit
105 P50,000
Cash
Notes Payable
To record acquisition of
equipment, 50% downpayment, 50% cash
8
101
P25,000
202
25,000
After the identification and measurement of the transactions or events, the
next step is to record them in a journal. The chart of accounts will be provided for
reference in P.R. portion of the journal. For you to better understand the lesson, an
analysis is provided below.
Pamilya Services
Chart of Accounts
Account
No.
Permanent Accounts
101
102
103
ASSETS
Cash
Accounts Receivable
Supplies
104
Service Equipment
201
202
LIABILITIES
Accounts Payable
Loans Payable
301
302
Account No.
Temporary
Accounts
401
INCOME
Service Revenue
501
502
503
504
EXPENSES
Taxes and Licenses
Expense
Salaries Expense
Utilities Expense
Rent Expense
OWNER'S EQUITY
Pamilya, Capital
Pamilya, Drawings
Always remember that for each journal entry, two or more accounts are always
affected by each transaction. The sum of the debits must be equal to the sum of the
credits for each transaction and the equality of the accounting equation must always
be maintained.
9
For better understanding, look at these examples:
The transaction covered the month of July 2019 of Pamilya Services, a
photocopying business by Mahal K. Pamilya.
July 1
Mr. Pamilya invested P30,000 cash and service equipment worth
P30,000 in the business.
GENERAL JOURNAL
Date
Account Titles and Explanation
Jul-1 Cash
Service Equipment
Pamilya, Capital
Page 1
P.R.
Debit
101
P 30,000
104
30,000
301
Credit
P 60,000
To record initial investment
Analysis:
Increase in Asset:
Increase in Asset:
Increase in Owner’s Equity:
July 1
Cash
Service Equipment
Pamilya, Capital
P30,000
P30,000
P60,000
The business obtained a loan from RDS Bank worth P50,000.
GENERAL JOURNAL
Date
Debit
Debit
Credit
Account Titles and Explanation
Jul-1 Cash
Loans Payable
Page 1
P.R.
Debit
101
P 50,000
202
Credit
P 50,000
To record loan from RDS Bank
Analysis:
Increase in Asset:
Increase in Liability:
July 2
Cash
Loans Payable
P50,000
P50,000
He bought office supplies for P10,000 cash.
GENERAL JOURNAL
Date
Debit
Credit
Particulars (Account Titles and
Explanation)
Jul-2 Supplies
Cash
Page 1
P.R.
Debit
103
P 10,000
101
To record purchased of supplies
10
Credit
P 10,000
Analysis:
Increase in Asset:
Decrease in Asset:
July 3
Supplies
Cash
P10,000
P10,000
He paid P2,000 for business permits and licenses.
GENERAL JOURNAL
Date
Debit
Credit
Account Titles and Explanation
Jul-3 Taxes and Licenses Expense
Page 1
P.R.
Debit
501
Cash
Credit
P 2,000
101
P 2,000
To record payment for taxes
and licenses
Analysis:
Decrease in Owner’s Equity:
Decrease in asset:
Taxes and Licenses
Cash
P2,000
P2,000
Debit
Credit
July 10
Mr. Pamilya hired one personnel with a weekly salary of P1,000 to
look after the business.
There is no need to journalize this transaction since this is a non-business
transaction. It does not have an effect on assets, liabilities, equity, revenues or on
expenses.
July 10
The business paid P1,000 for the weekly salary of the employee.
GENERAL JOURNAL
Date
Account Titles and Explanation
Jul-10 Salaries Expense
Cash
Page 1
P.R.
Debit
502
P 1,000
101
Credit
P1,000
To record payment of salary
Analysis:
Decrease in Owner’s Equity:
Decrease in Asset:
Salaries Expense
Cash
11
P1,000
P1,000
Debit
Credit
July 16
He received P8,000 cash for services rendered.
GENERAL JOURNAL
Date
Account Titles and Explanation
Jul-16 Cash
Page 2
P.R.
101
Service Revenue
Debit
Credit
P8,000
401
P8,000
To record cash received for
services rendered
Analysis:
Increase in Asset:
Increase in Owner’s Equity:
July 17
Cash
Service Revenue
P8,000
P8,000
Debit
Credit
The business paid P1,000 for the weekly salary of the employee.
GENERAL JOURNAL
Date
Account Titles and Explanation
Jul-17 Salaries Expense
Page 2
P.R.
502
Cash
Debit
Credit
P1,000
101
P1,000
To record payment of salary
Analysis:
Decrease in Owner’s Equity:
Decrease in Asset:
July 21
Salaries Expense
Cash
P1,000
P1,000
He billed a customer P2,000 for services rendered on account.
GENERAL JOURNAL
Date
Debit
Credit
Account Titles and Explanation
Jul-21 Accounts Receivable
Service Revenue
Page 3
P.R.
Debit
102
P 2,000
401
Credit
P 2,000
To record customers billed for
services rendered
Analysis:
Increase in Asset:
Increase in Owner’s Equity:
Accounts Receivable
Service Revenue
12
P2,000
P2,000
Debit
Credit
July 24
The business paid P1,000 for the weekly salary of an employee.
GENERAL JOURNAL
Date
Page 3
Account Titles and Explanation
P.R.
Jul-24 Salaries Expense
Debit
502
Cash
Credit
P1,000
101
P1,000
To record payment of salary
Analysis:
Decrease in Owner’s Equity:
Decrease in Asset:
July 27
Salaries Expense
Cash
P1,000
P1,000
Mr. Pamilya withdrew P500 from the business.
GENERAL JOURNAL
Date
Debit
Credit
Account Titles and Explanation
Page 3
P.R.
Jul-27 Pamilya, Drawings
302
Cash
Debit
Credit
P 500
101
P 500
To record owner's withdrawal
Analysis:
Decrease in Owner’s Equity:
Decrease in Asset:
July 28
Pamilya, Drawings
Cash
P500
P500
He collected P2,000 which is the amount billed to a customer.
GENERAL JOURNAL
Date
Debit
Credit
Account Titles and Explanation
Jul-28 Cash
Accounts Receivable
Page 3
P.R.
Debit
101
P 2,000
102
Credit
P 2,000
To record collection of
customer's account
Analysis:
Increase in asset:
Decrease in asset:
Cash
Accounts Receivable
13
P2,000
P2,000
Debit
Credit
July 29
He paid P10,000 for the monthly rent of the place.
GENERAL JOURNAL
Date
Particulars (Account Titles and
Explanation)
Jul-29 Rent Expense
Cash
Page 3
P.R.
Debit
504
P 10,000
101
Credit
P10,000
To record payment of rent
Analysis:
Decrease in Owner’s Equity:
Decrease in Asset:
July 30
Rent Expense
Cash
P10,000
P10,000
He had to pay P2,500 for the electric bill.
GENERAL JOURNAL
Date
Account Titles and Explanation
Jul-30 Utilities Expense
bill
Accounts Payable
To record receipt of electricity
Analysis:
Decrease in Owner’s Equity:
Increase in Liability:
July 31
Utilities Expense
Accounts Payable
Page 3
P.R.
Debit
503
P 2,500
201
Credit
P 2,500
P2,500
P2,500
Debit
Credit
The business paid P1,000 for the weekly salary of the employee.
GENERAL JOURNAL
Date
Debit
Credit
Account Titles and Explanation
Jul-31 Salaries Expense
Cash
Page 3
P.R.
Debit
502
P 1,000
101
Credit
P 1,000
To record payment of salary
Analysis:
Decrease in Owner’s Equity:
Decrease in Asset:
Salaries Expense
Cash
14
P1,000
P1,000
Debit
Credit
What’s More
Directions: Write FINANCIAL if the transaction is a financial transaction. Write NONFINANCIAL if the transaction is not. Write your answers on a separate
sheet of paper.
1. The owner paid the salaries of the employees.
2. The owner conducted an orientation to newly hired employees.
3. The owner paid electric, water, and telecommunication bills.
4. The owner received payment from customers.
5. The owner post advertisements in the city.
6. The owner awarded Employee of the Month to a deserving employee.
7. The owner purchased a furniture and paid it in cash.
8. The owner received payment from customers on account.
9. The owner signed the contract to new supplier.
10. The owner withdrew cash from the business.
What I Have Learned
Directions: TRUE or FALSE: Write TRUE if the statement is correct and FALSE if it
is not. Write your answers on a separate sheet of paper.
1. The business transactions are analyzed using the rules of debit and credit.
2. The documents used by the business may not be analyzed if it has financial
impact or effect.
3. The journal is a chronological record of the entity’s transactions.
4. The journal is the book of final entry.
5. Journalizing is the recording phase of accounting.
15
What I Can Do
Directions: Record the following transactions in the general journal. Use the following
numbers for posting reference. Write your answers on a separate answer
sheet.
101
Cash
201
Accounts Payable
102
Accounts Receivable
301
Makabayan, Capital
103
Supplies
302
Makabayan, Drawings
104
Furniture and Fixtures
401
Service Revenue
December 1, 2019
Rey Makabayan invested P100,000 cash in the business.
GENERAL JOURNAL
Date
Account Titles and Explanation
December 7, 2019
Page
P.R.
Debit
He bought office supplies worth P2,500.
GENERAL JOURNAL
Date
Account Titles and Explanation
December 10, 2019
He purchased furniture
amounting to P25,000.
Page
P.R.
and
Debit
Account Titles and Explanation
16
Credit
fixtures on
GENERAL JOURNAL
Date
Credit
account
Page
P.R.
Debit
Credit
December 18, 2019
He billed customers P40,000 for services rendered.
GENERAL JOURNAL
Date
Account Titles and Explanation
December 23, 2019
Page
P.R.
Debit
He withdrew P10,000 cash in the business.
GENERAL JOURNAL
Date
Account Titles and Explanation
December 25, 2019
Page
P.R.
Debit
Account Titles and Explanation
December 28, 2019
Page
P.R.
Debit
Credit
He made additional investment of P15,000 cash.
GENERAL JOURNAL
Date
Credit
He received P5,000 for services rendered.
GENERAL JOURNAL
Date
Credit
Account Titles and Explanation
17
Page
P.R.
Debit
Credit
Assessment
Directions: Prepare the journal entry for each transaction. Use the following account
numbers for posting reference. Write your answers on a separate sheet
of paper.
Assets
Revenue
101
Cash
401
102
Accounts Receivable Expenses
103
Supplies
501
Salaries Expense
104
Service Vehicle
502
Rent Expense
503
Utilities Expense
504
Advertising Expense
505
Miscellaneous Expense
Liability
201
Accounts Payable
Owner’s Equity
301
Angelie, Capital
302
Angelie, Drawings
Service Revenue
Michelle Angelie established Angelie’s Advertising Business. The following are
the transactions for the whole month of October 2019.
Oct.
1
2
Michele Angelie deposited P250,000 under the name of the business.
She acquired a service vehicle in the amount of P195,000 on account.
3
She acquired supplies for cash worth P57,000.
9
She received P87,500 cash for painted signs.
10
She paid the month’s rent amounting to P25,000.
11
She painted signs for Mundo Mobile on account for P170,000.
12
She paid P55,000 on account from October 2.
16
She withdrew P25,000 for personal use.
23
She collected P35,000 from Mundo Mobile.
27
She paid salaries amounting to P57,000 for the month.
30
She paid PH Telecom P7,500 for communication services for the
month.
31
She paid the bill amounting to P5,500 to AdLamao for advertising for
the month.
18
Additional Activities
Directions: Record the transactions of Jinky Estrada in the general journal. Use the
following account code for posting reference. Write your answers on a
separate sheet of paper.
Account Titles
101
Cash
301
Estrada, Capital
102
Accounts Receivable
401
Consulting Revenues
103
Office Furniture
501
Salaries Expense
104
Office Equipment
502
Rent Expense
201
Accounts Payable
Jinky Estrada is an experienced event planner. The transactions for December
2018 are the following:
Dec.
1
Jinky invested P100,000 in cash to start her own business.
3
She paid 5,000 for one month’s rent.
4
She bought office furniture for P15,000 in cash.
4
She received a laptop computer worth P54,000. She paid 50% as
downpayment for it with a balance due in 30 days.
6
She performed services for P12,000 in cash.
7
She did services for P11,000 on credit.
9
She acquired a fax machine for P8,500; paid P4,000 in cash, balance
due in 10 days.
11
She received P5,400 from clients on account.
14
She paid P12,000 for salaries.
15
She settled in full the balance for the fax machine.
19
WHAT I KNOW
1. TRUE
6. TRUE
2. TRUE
7. FALSE
3. TRUE
8. TRUE
4. FALSE
9. TRUE
5. TRUE
10. FALSE
WHAT'S IN
a
Cash
₱150,000.00
Owner's Equity
₱150,000.00
f
b
Office Furniture
₱12,300.00
Cash
₱12,300.00
g
c
Utilities Expense
₱1,080.00
Cash
₱1,080.00
h
d
Accounts Receivable
₱13,000.00
e
Salaries Expense
₱15,000.00
Service Revenue
Rent Expense
₱8,400.00
Owner's Withdrawals
₱8,500.00
i
₱13,000.00
Cash
₱15,000.00
Cash
₱20,000.00
Cash
₱5,500.00
j
Utilities Expense
₱599.00
Service Revenue
₱20,000.00
Cash
₱8,400.00
Cash
₱8,500.00
Accounts Receivable
₱5,500.00
Cash
₱599.00
WHAT I HAVE LEARNED
1. TRUE
2. FALSE
3. TRUE
4. FALSE
5. TRUE
WHAT I CAN DO
GENERAL JOURNAL
Date
Account Titles and Explanation
2019
Dec-01 Cash
Makabayan, Capital
To record initial investment
Page 1
P.R.
Debit
101 ₱100,000
301
7 Supplies
Cash
To record supplies bought
103
101
2,500
10 Furniture and Fixtures
Cash
To record furniture bought
104
101
25,000
18 Cash
Service Revenue
To record services rendered
101
401
40,000
23 Makabayan, Drawings
Cash
To record withdrawals
302
101
10,000
25 Cash
Service Revenue
To record services rendered
101
401
5,000
28 Makabayan, Capital
Cash
To record investment
301
101
15,000
Credit
₱100,000
2,500
25,000
40,000
10,000
5,000
15,000
ASSESSMENT
GENERAL JOURNAL
Date Account Titles and Explanation
2019
Oct-01 Cash
Angelie, Capital
Page 1
P.R.
Debit
Credit
101 ₱250,000
301
₱250,000
104 195,000
201
195,000
To record investment
2 Service Vehicle
Accounts Payable
To record the acquisition of
service vehicle
3 Supplies
Cash
To record supplies bought
103
101
57,000
9 Cash
Service Revenue
101
401
87,500
10 Rent Expense
Cash
To record payment of rent
502
101
25,000
11 Accounts Receivable
Service Revenue
102 170,000
401
57,000
87,500
To record services rendered
To record services rendered
25,000
170,000
ASSESSMENT
GENERAL JOURNAL
Date Account Titles and Explanation
2019
Oct-12 Accounts Payable
Cash
To record payment of debt
Page 2
P.R.
Debit
201 ₱55,000
101
16 Angelie, Drawings
Cash
To record withdrawals
302
101
25,000
23 Cash
Accounts Receivable
To record collections
101
102
35,000
27 Salaries Expense
Cash
To record payment of salaries
501
101
57,000
30 Utilities Expense
Cash
To record payment of
communication services
503
101
7,500
31 Advertising Expense
Cash
To record payment for
advertising
504
101
5,500
Credit
₱55,000
25,000
35,000
57,000
7,500
5,500
ADDITIONAL ACTIVITIES
GENERAL JOURNAL
Date Account Titles and Explanation
2019
Dec-01 Cash
Estrada, Capital
Page 1
P.R.
Debit
101 ₱100,000
301
Credit
₱100,000
To record investment
3 Rent Expense
Cash
To record payment of rent
502
101
5,000
4 Office Furniture
Cash
To record purchase of office
furniture
103
101
15,000
4 Office Equipment
Cash
104
101
201
54,000
101
401
12,000
Accounts Payable
5,000
15,000
27,000
27,000
To record purchase of office
equipment
6 Cash
Service Revenue
To record services rendered
12,000.00
ADDITIONAL ACTIVITIES
GENERAL JOURNAL
Date Account Titles and Explanation
2019
Dec-07 Accounts Receivable
Service Revenue
Page 2
P.R.
Debit
102
401
₱11,000
104
101
201
8,500
11 Cash
Accounts Receivable
To record collections
101
102
5,400
14 Salaries Expense
501
101
12,000
201
101
4,500
Credit
₱11,000
To record services rendered
9 Office Equipment
Cash
Accounts Payable
To record purchase of fax
machine
Cash
4,000
4,500
5,400
12,000
To record payment of
salaries
15 Accounts Payable
Cash
To record payment of
accounts
4,500
26
References
Ballada, Win. 2018. "Basic Financial Accounting and Reporting 21st Edition."
Fundamentals of Accountancy Business and Management 1. 2016. DepEd K to 12
Curriculum Guide.
Fundamentals of Accountancy Business and Management 1. 2016. DepEd K to 12
Teacher’s Guide.
Tugas, Florence C., Herminigilda E. Salendrez, and Joy S. Rabo.
2016. Fundamentals of Accountancy Business and Management 1. Vibal
Group Inc. Quezon City Phils.
Valencia, Edwin G., Roxas, Gregorio, F.2014. Basic Accounting Concepts, Principles,
Procedures, and Applications. Valencia Educational Supply. Philippines
27
For inquiries or feedback, please write or call:
Department of Education – Region III,
Schools Division of Bataan - Curriculum Implementation Division
Learning Resources Management and Development Section (LRMDS)
Provincial Capitol Compound, Balanga City, Bataan
Telefax: (047) 237-2102
Email Address: bataan@deped.gov.ph