Fundamentals of Accountancy, Business and Management – 1
Grade Level/Section: Grade 11- ABM
MODULE 1 – FABM-1
Subject Teacher: TZAZTINE A. MABUTI
SUMMARY OF THE ACCOUNTING PROCESS
A. IDENTIFYING
1. Identifying Business Transactions.
2. Measuring Business Transactions.
B. RECORDING
1. Journalizing Business Transactions.
C. CLASSIFYING
1. Posting the accounts to their respective ledgers.
D. SUMMARIZING
1. Preparation of Unadjusted Trial Balance.
2. Identifying and correcting errors.
3. Preparing adjusting entries.
4. Preparation of Adjusted Trial Balance.
5. Preparation of Worksheet.
E. COMMUNICATING
1. Preparation of Financial Statements.
2. Preparation of Closing Entries.
3. Preparation of Post-closing Trial Balance.
JOURNALIZING
Journalizing is the process of chronologically recording business transactions in the appropriate
book of original entry (journal). This step enforces the double-entry system (Debits must
equal Credits).
 The General Journal (GJ)
The General Journal is used for any transaction that cannot be recorded in the four Special
Journals.
PROFORMA ENTRIES FOR JOURNALIZING
1. Investment/Capital
Proforma Entry:
Dr. Cash / Asset Account
Cr. Owner’s Capital
Example:
June 1 – The owner invested ₱100,000 cash to start the business.
> Dr. Cash …………………………………. ₱100,000
> Cr. Juan Dela Cruz, Capital ……………. ₱100,000
Fundamentals of Accountancy, Business and Management – 1
Grade Level/Section: Grade 11- ABM
MODULE 1 – FABM-1
Subject Teacher: TZAZTINE A. MABUTI
2. Withdrawal by Owner (Drawing)
Proforma Entry:
Dr. Owner’s Drawing
Cr. Cash / Asset Account
Example:
June 10 – The owner withdrew ₱5,000 for personal use.
> Dr. Juan Dela Cruz, Drawing …………….. ₱5,000
> Cr. Cash …………………………………. ₱5,000
3. Purchase of Assets for Cash
Proforma Entry:
Dr. Asset Account
Cr. Cash
Example:
June 2 – Purchased equipment for ₱25,000 in cash.
> Dr. Equipment ………………………….. ₱25,000
> Cr. Cash …………………………………. ₱25,000
4. Purchase of Assets on Account (Credit Purchase)
Proforma Entry:
Dr. Asset Account
Cr. Accounts Payable
Example:
June 4 – Bought office supplies on account, ₱3,000.
> Dr. Office Supplies ……………………. ₱3,000
> Cr. Accounts Payable ……………. ₱3,000
5. Payment of Accounts Payable
Proforma Entry:
Dr. Accounts Payable
Cr. Cash
Example:
June 8 – Paid ₱2,000 to a supplier for an account payable.
> Dr. Accounts Payable ……………….. ₱2,000
> Cr. Cash …………………………………. ₱2,000
6. Sale of Goods/Services for Cash
Proforma Entry:
Dr. Cash
Cr. Service Revenue / Sales
Example:
June 5 – Rendered services and received ₱8,000 cash.
> Dr. Cash …………………………………. ₱8,000
> Cr. Service Revenue ………………. ₱8,000
7. Sale of Goods/Services on Account
Proforma Entry:
Dr. Accounts Receivable
Cr. Service Revenue / Sales
Fundamentals of Accountancy, Business and Management – 1
Grade Level/Section: Grade 11- ABM
MODULE 1 – FABM-1
Subject Teacher: TZAZTINE A. MABUTI
Example:
June 6 – Rendered services on account, ₱10,000.
> Dr. Accounts Receivable ………….. ₱10,000
> Cr. Service Revenue ………………. ₱10,000
8. Collection of Accounts Receivable
Proforma Entry:
Dr. Cash
Cr. Accounts Receivable
Example:
June 12 – Collected ₱5,000 from a customer on account.
> Dr. Cash …………………………………. ₱5,000
> Cr. Accounts Receivable ………… ₱5,000
9. Payment of Expenses
Proforma Entry:
Dr. Expense Account
Cr. Cash
Example:
June 15 – Paid ₱2,500 for electricity expense.
> Dr. Utilities Expense ……………….. ₱2,500
> Cr. Cash …………………………………. ₱2,500
10. Incurred Expenses on Account
Proforma Entry:
Dr. Expense Account
Cr. Accounts Payable
Example:
June 16 – Incurred ₱1,000 advertising expense on account.
> Dr. Advertising Expense ………….. ₱1,000
> Cr. Accounts Payable ……………. ₱1,000
11. Purchase of Supplies for Cash
Proforma Entry:
Dr. Supplies
Cr. Cash
Example:
June 7 – Bought supplies for ₱2,000 cash.
> Dr. Office Supplies ……………………. ₱2,000
> Cr. Cash …………………………………. ₱2,000
12. Payment of Rent
Proforma Entry:
Dr. Rent Expense
Cr. Cash
Example:
June 9 – Paid ₱4,000 for office rent.
> Dr. Rent Expense ……………………. ₱4,000
> Cr. Cash …………………………………. ₱4,000
Fundamentals of Accountancy, Business and Management – 1
Grade Level/Section: Grade 11- ABM
MODULE 1 – FABM-1
Subject Teacher: TZAZTINE A. MABUTI
13. Prepaid Expense (Advance Payment)
Proforma Entry:
Dr. Prepaid Expense Account
Cr. Cash
Example:
June 11 – Paid ₱6,000 for six months’ insurance.
> Dr. Prepaid Insurance ……………. ₱6,000
> Cr. Cash …………………………………. ₱6,000
14. Borrowing from the Bank
Proforma Entry:
Dr. Cash
Cr. Notes Payable
Example:
June 13 – Borrowed ₱20,000 from the bank.
> Dr. Cash …………………………………. ₱20,000
> Cr. Notes Payable …………………. ₱20,000
15. Payment of Loan
Proforma Entry:
Dr. Notes Payable
Cr. Cash
Example:
June 20 – Paid ₱5,000 of the bank loan.
> Dr. Notes Payable …………………. ₱5,000
> Cr. Cash …………………………………. ₱5,000
Accounting Tip:
When journalizing, always remember the Rule of Debit and Credit:
- Debit increases Assets and Expenses.
- Credit increases Liabilities, Capital, and Revenues.
SPECIAL JOURNALS
Special Journals are used to simplify the recording of high-volume, repetitive transactions.
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.
c. Sales Journal (Sales on Account Journal) - is used to record all sales on credit (on
account)
d. Purchase Journal (Purchase on Account Journal) - is used to record all purchases of
inventory on credit (or on account)
Fundamentals of Accountancy, Business and Management – 1
Grade Level/Section: Grade 11- ABM
MODULE 1 – FABM-1
Subject Teacher: TZAZTINE A. MABUTI
CLASSIFYING
Ledger
A ledger is a means of accumulating in one place all the information about changes in an asset,
liability, equity, income, and expense accounts.
A sample of the general ledger is shown below:
A general ledger is often called a T-Account because of its resemblance to the letter
T. A T-Account is a simplified form of general ledger. A sample of a T-account is shown
below:
General Ledger
The General Ledger is the complete collection of all the accounts (Assets, Liabilities,
Equity, Revenue, Expense) used by the company.
Subsidiary Ledgers
These ledgers contain the detail for individual customers or creditors, which collectively
support the balance of a single Control Account in the General Ledger.
Accounts Receivable Subsidiary Ledger (ARSL): Tracks the balance due from each specific
customer. Its total must equal the Accounts Receivable balance in the GL.
Accounts Payable Subsidiary Ledger (APSL): Tracks the amount owed to each specific
creditor/supplier. Its total must equal the Accounts Payable balance in the GL.
PREPARATION OF TRIAL BALANCE
A Trial Balance is a list of all ledger accounts and their balances (debit or credit) at a given
date. It is prepared to check the mathematical accuracy of the ledger. The total debit must
always equal the total credit.
Fundamentals of Accountancy, Business and Management – 1
Grade Level/Section: Grade 11- ABM
MODULE 1 – FABM-1
Subject Teacher: TZAZTINE A. MABUTI
Objective: To verify the equality of the total debit balances and the total credit balances in
the ledger
PROFORMA / FORMAT
TRIAL BALANCE
As of _____________
Account Title
Debit (₱)
Credit (₱)
Cash
Accounts Receivable
Office Supplies
Equipment
Accounts Payable
Notes Payable
Juan Dela Cruz, Capital
Juan Dela Cruz, Drawing
Service Revenue
Rent Expense
Utilities Expense
Salaries Expense
TOTAL
₱_________ ₱_________
✅ Rule: Total Debits = Credits
Fundamentals of Accountancy, Business and Management – 1
Grade Level/Section: Grade 11- ABM
Subject Teacher: TZAZTINE A. MABUTI
MODULE 1 – FABM-1
EXAMPLE OF A TRIAL BALANCE
TRIAL BALANCE
As of June 30, 2025
Account Title
Debit (₱) Credit (₱)
Cash
50,000
Accounts Receivable
15,000
Office Supplies
5,000
Equipment
30,000
Accounts Payable
10,000
Notes Payable
20,000
Juan Dela Cruz, Capital
60,000
Juan Dela Cruz, Drawing 5,000
Service Revenue
35,000
Rent Expense
3,000
Utilities Expense
2,000
TOTAL
₱110,000 ₱110,000