Republic of the Philippines
Department of Education
Region X- Northern Mindanao
DIVISION OF CAGAYAN DE ORO
ANGELES SISTERS NATIONAL HIGH SCHOOL
Consolacion, Cagayan de Oro City
School ID: 304113
Detailed Lesson Plan – Business Transactions and Their Analysis as Applied to
the Accounting Cycle of a Service Business
School
Angeles Sisters National
Grade Level
11-ABM
High School
Teacher
Angelie T. Padilla
Learning
Fundamentals
Area
of
Accountancy,
Business and
Management I
Time & Dates
Quarter
First
I.Objectives
A. Content
Standards
B. Performance
Standards
C. Learning
Competencies
/ Objectives.
Write the LC
code for each
II. Content
III. Learning
Resources
A. References
1. Teacher’s
Guide pages
2. Learner’s
Materials
pages
3. Textbook
pages
4. Additional
Materials from
Learning
Resource (LR)
portal
B. Other
Learning
Resources
IV. Procedures
Introductory Activity
The learners demonstrate an understanding of the accounting
cycle of a service business.
The learners shall be able to identify business and nonbusiness transactions, enumerate the types of business
documents, recite the rules of debit and credit, and apply
these to simple cases.
• describe the nature of transactions in a service business
ABM_FABM11-Iva-d-29
• prepare adjusting entries ABM_FABM11-IVa-d-33
Business Transactions and Their Analysis as Applied to the
Accounting Cycle of a Service Business
97 – 118
None
None
None
None
Classroom Preliminaries
a. Prayer
b. Review of previous topics
(The teacher will ask the learner to arrange the accounting
cycle by posting it on the board. If necessary, correct the
sequence.)
The teacher will give the following.
Objectives:
• I will be able to give examples of transactions in a service
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0
business.
• I will be able to prepare adjusting entries.
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Motivation
Activity / Strategy
Analysis
Quote of the Day
The teacher will post a barcode using
the
projector and using the learner’s
barcode
scanner, they will determine the quote
of the
day which is:
“Life is like riding a bicycle. To keep your balance, you must
keep moving”. The teacher will relate today’s quote from a
concept in physical education and health subject on changing
physical activity behavior to progress along a continuum
known as stages of change.
Ask a learner to give examples of a service business.
Acknowledge all possible answers and correct
them if necessary. Get one example of a service business
from those enumerated by the learner. Ask the learners to
imagine the possible transactions that may occur in that
particular business.
Relate the answers of the learners to the subject matter of this
chapter. To illustrate, the teacher will project a one-piece 12column worksheet The teacher will then let student simply
copy the column headings onto the worksheet. The teacher
also distributed handouts for today’s lesson.
Discuss Steps 5 to 6 of the Accounting Cycle
Step 5 - Worksheet
This step is simply about plotting the items in the unadjusted
trial balance on the worksheet. The students try to analyze the
connection between the worksheet and unadjusted trial
balance(the first 2 columns in the worksheet is the unadjusted
trial balance). The teacher then introduced the parts of the
worksheet. (before proceeding in the next step, the teacher
asks for any questions)
Step 6 – Adjusting Entries
At the end of the accounting period, some accounts in the
general ledger would require updating. The teacher introduces
the matching principle- cost should be matched with the
revenue generated.
One student reads and explains the principle of Revenue
Recognition – accounting standards require that revenue is
recognized when it is earned.

Example 1. Assume that you are preparing the financial
statements for Feb 2016. Matapang Computer Repairs
rendered services amounting to PHP25,000 for the
repair of the computer units of Mr. Tamad on Feb 26,
2016. However, the payment for these services of
Matapang will be made on Mar 15, 2016.

Question: when should you recognize the PHP25,000
as revenue or income, in February or March?

Example 2. Assume that you are preparing the financial
statements for February 2016. On February 28, 2016,
Matapang Repairs received payment from Mr. Tamad
amounting to PHP25,000. This payment is for the
repair of the computer units of Mr. Tamad on March 5,
2016.
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Question: when should you recognize the PHP25,000
as revenue or income, in February or March?

Assume that you are preparing the financial
statements for February 2016. On February 28, 2016,
M t
R
i
i d
tf
M T
d
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0
amounting

to PHP25,000. This payment is for the repair of the
computer units of Mr. Tamad on March 5, 2016.

Question: when should you recognize the PHP25,000
as revenue or income, in February or March?
Students debate on their answers. Teacher clarifies the
correct answer.
One student reads and explains the principle of Matching
Principle - this principle directs a business to report an
expense on its income statement within the same period as its
related income.

Assume that you are preparing the financial statements
for February 2016. The business gives a commission
of10% service income to its employees. The
commission is paid the following month. On February
2016, the total service income for the month is
PHP100,000. Thus, the employees are entitled to a
commission of PHP10,000. This amount will be paid on
March 12, 2016.

Question: when should the commission expense be
recorded in the book of accounts of the business, in
March or in February?
Teacher asks for a volunteer. All adjusting entries affect at
least one income statement account and one statement of
financial position account.
1. Depreciation expense

Store, Office, Building, and Transportation equipment

Recall that Matapang acquired office equipment on
February 15, 2016 for his repair shop business. The
cost of the equipment is PHP25,000. It was estimated
to have a useful life of five years. It is estimated that
after five years, the office equipment can be sold at a
scrap value of PHP1,000.

Depreciation is a means of allocating the cost of an
asset to an expense over the accounting period that will
benefit the use of the asset. In the exercise above, the
equipment will be used by Matapang for five years.
Proper accounting procedures dictates that the cost of
PHP25,000 should be spread over five years.

Straight line method (Acquisition Cost – Salvage or
Residual Value) / Useful Life.

Example: If the accounting period being reported by
Matapang is for the month ending February 29, 2016,
the adjusting entry to record this depreciation in the
books of Matapang is
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2. Deferred expenses or prepaid expenses

Example: Recall that on February 19, 2016 Matapang
purchased PHP5,000 worth of office supplies on
account.
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
By the end of the month, PHP2,000 worth of these
supplies are still unused.

The February 19, 2016 entry to record the purchase on
the account of office supplies was already posted to the
general ledger and included in the balances, as shown
in the unadjusted trial balance above.
3. Deferred Income or unearned income

Example: On February 15, 2016 Matapang entered into
a contract with Makisig to maintain the computers of
Makisig for two months starting on February 15, 2016
up to April 15, 2016. On the same date, Makisig paid
the total contract amount of PHP40,000 in full. In the
February 29, 2016 entry above, as of end of February
2016, Matapang has already earned the service
revenue for the first 15 days, thus an adjusting entry is
recorded.
4. Accrued expenses or accrued liabilities

Example: On February 29, 2016, Matapang received
the electric bill for the month of February amounting to
PHP3,800. Matapang will pay this bill on March 2016.

The electric bill represents the cost of electricity used
(or incurred) for February. Although the said bill is still
unpaid and thus was not recorded, the matching
principle and accrual basis of accounting dictates that
the same should be recorded in February.
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