SERVICE BUSINESS
▰
provides a needed service for a fee.
▰
no physical product sold to clients.
THE ACCOUNTING CYCLE
TRANSACTIONS
JOURNAL
ENTRIES
T-ACCOUNTS
TRIAL BALANCE
CLOSING THE
BOOKS
FINANCIAL
STATEMENTS
ADJUSTING
JOURNAL
ENTRIES
WORKSHEET
JOURNALIZING
1.
2.
3.
4.
5.
Label the parts of the general journal.
Record the date of the transaction.
Record the debit account followed by the
amount debited.
Record the credit account followed by the
amount credited.
Write a brief explanation about the transaction.
RULES OF DEBIT AND CREDIT
EXAMPLE
August 1 – Mr.
Ran invested
P250,000 cash to
start the business.
DATE
2019
Aug.
PARTICULARS
1 Cash
+ Cash
+ Mr. Ran, Capital
P/R
DEBIT
CREDIT
P250,000
Mr. Ran, Capital
Owner’s initial investment
P250,000
EXAMPLE
August 1 – Mr. Ran invested P250,000
cash to start the business.
3 – Purchased delivery truck
P80,000 in cash.
DATE
2019
Aug.
PARTICULARS
1 Cash
P/R
DEBIT
CREDIT
P250,000
Mr. Ran, Capitail
P250,000
Owner’s initial investment
3
PPE
80,000
Cash
Bought delivery truck in cash
80,000
EXAMPLE
August 8 – Purchased computer unit on
account, P25,000.
DATE
2019
Aug.
PARTICULARS
8 PPE
P/R
DEBIT
CREDIT
P25,000
Accounts Payable
Bought computer on account
P25,000
EXAMPLE
August 11 – Received cash P10,000 for
delivery services rendered to
customer.
DATE
2019
Aug.
PARTICULARS
11 Cash
P/R
DEBIT
CREDIT
P10,000
Service Revenue
Rendered service in cash
P10,000
EXAMPLE
August 15 – Borrowed P10,000 from a
friend signing a promissory
note.
DATE
2019
Aug.
PARTICULARS
15 Cash
P/R
DEBIT
CREDIT
P10,000
Notes Payable
Borrowed cash from a friend
P10,000
EXAMPLE
August 22 – Paid creditors on account of
August 8 account, P5,000.
DATE
2019
Aug.
PARTICULARS
22 Accounts Payable
Cash
Payment of debt
P/R
DEBIT
CREDIT
P5,000
P5,000
EXAMPLE
August 25 – Paid half of the notes payable.
DATE
2019
Aug.
PARTICULARS
25 Notes Payable
Cash
Payment of debt
P/R
DEBIT
CREDIT
P5,000
P5,000
EXAMPLE
August 30 – The owner withdrew cash for
his personal use, P3,000.
DATE
2019
Aug.
PARTICULARS
30 Mr. Ran, Drawing
Cash
Owner’s withdrawal in cash
P/R
DEBIT
CREDIT
P3,000
P3,000