Aklan Catholic College

Roxas Avenue Extension, Andagao

Kalibo, Aklan

LEARNING ACTIVITY SHEET

GRADE 12
FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT 2
FIRST QUARTER
Learning Activity No: 1 Date:
Topic: Journalizing, Posting and Trial Balance Week: 1 & 2 Session/s: 4
Learning Intent: At the end of the Week 1 & 2, the students can have an in depth understanding of the accounting
cycle by:
1. Journalizing business transactions in the General Journal;
2. Posting journal entries to the General Ledger; and
3. Preparing an Unadjusted Trial Balance.
Value: Accountability - Responsibility.

I. Concept Notes
For Non-Wired

THE ACCOUNTING CYCLE

1. Identification of Events to be Recorded

2. Transactions are Recorded in the Journal
3. Journal Entries are Posted to the Ledger
4. Preparation of a Trial Balance
5. Preparation of the Worksheet Including Adjusting Entries
6. Preparation of the Financial Statements
7. Adjusting Entries are Journalized and Posted
8. Closing Journal Entries are Journalized and Posted
9. Preparation of a Post-Closing Trial Balance
10. Reversing Journal Entries are Journalized and Posted

RELATED ACCOUNTING CONCEPTS AND PRINCIPLES

Entity Concept - the entity is separate from the owners, managers, and employees who constitute the
entity. Accordingly, the transactions of the entity shall not be merged with the transactions of the owners.

Double-entry System – in every transaction, at least two (2) accounts are affected, and each entry has at
least one (1) debit and one (2) credit.

For instance, consider this transaction (from Activity No. 1):

“Feliciano invested cash by making a deposit in a bank account for the business, P150,000.”

We can identify that the two accounts affected are: (1) Cash and (2) Feliciano, Capital. Considering the
amount of Cash, the Cash of the business increased, while the Cash of the owner decreased. For
accounting purposes, since we are accounting in the point of view of the business we consider that Cash
increased and Feliciano, Capital also increased.
Revenue Recognition Principle – revenue is to be recognized in the accounting period when goods are
delivered or services are rendered or performed.

For instance, consider this transaction (from Activity No. 3):

“March 1, performed landscaping services on account for Urior University, P25,600.”

Here, we can already consider that the business already earned the income because in already performed
the service, even though no payment has been received yet. Therefore we consider that the two accounts
affected are: (1) Accounts Receivable (increase) and (2) Landscaping Revenues (increase).

Also, consider this transaction (frpm Activity No. 7):

“October 11, received P8,750 in advance from Ledonio Company for a delivery work to be performed in the future.”

In this case, we cannot recognize the revenue, even though we already received payment for the future
service, because we are not yet able to perform the service. Therefore the two accounts affected are: (1)
Cash (increase – as we received the payment) and (2) Unearned Delivery Revenues (increase) which is a
Liability account.

Expense Recognition Principle – expenses should be recognized in the accounting period in which goods
and services are used up to produce revenue and not when the entity pays for those goods and services.

Consider this situation (from Activity No. 3):

“March 10, bought insurance for one year, P9,000.”

Though we paid cash amounting to P9,000, this amount paid to insurance is still not considered expense for
our accounting because the amount is good for the next 12-months (one year) and not yet expired or
consumed. Therefor instead of considering an Insurance Expense, we use (1) Prepaid insurance (increase)
which is an Asset account, and (2) Cash (decrease).

Revenue Recognition and Expense Recognition Principle are the very essence of the Accrual Basis of
accounting.

Accrual accounting depicts the effects of transactions and other events and circumstances on an entity’s
economic resources and claims in the period in which those effects occur even if the resulting cash receipts
and payments occur in a different period.

THE RULES OF DEBIT AND CREDIT

ELEMENTS OF FINANCIAL INCREASE (NORMAL

DECREASE
STATEMENTS BALANCE)
ASSET Debit Credit
LIABILITY Credit Debit
EQUITY Credit Debit
INCOME Credit Debit
EXPENSE Debit Credit
Consider the following transactions and their corresponding analysis in applying the rules of debit and credit
(from Activity No. 4):

Increase/ Debit/
Transactions Accounts Affected Amount
Decrease Credit
Invested P150,000 in cash to Cash Increase Debit 150,000
start the business.
Huerto, Capital Increase Credit 150,000
Paid P7,500 for one month’s Rent Expense Increase Debit 7,500
rent.
Cash Decrease Credit 7,500
Performed services for P10,500 Cash Increase Debit 10,500
in cash.
Consulting Revenues Increase Credi 10,500
Performed services for P12,750 Accounts Receivable Increase Debit 12,750
on credit.
Consulting Revenues Increase Credit 12,750
Acquired a personal copier for Office Equipment Increase Debit 39,500
P39,500 on credit, paid P9,500
Cash Decrease Credit 9,500
cash, balance due in 30 days.
Accounts Payable Increase Credit 30,000
Collected P6,000 on accounts Cash Increase Debit 6,000
receivable.
Accounts Receivable Decrease Credit 6,000
Issued a check for P4,000 in Accounts Payable Decrease Debit 4,000
partial payment of the amount
owed for office chairs. Cash Decrease Credit 4,000

PREPARATION OF JOURNAL ENTRIES

The Journal is a chronological record of the entity’s transactions. A journal entry shows all the effects of a
business transaction in terms of debits and credits. The General Journal is the simplest journal.

Format
a. Date. The year and month are not rewritten for every entry unless the year of month changes or a
new page is needed.
b. Account Titles and Explanation. The account to be debited is entered at the extreme left of the first
line while the account to be credited is entered slightly indented on the next line. A brief description
of the transaction is usually made on the line below the credit. Generally, skip a line after each
entry.
c. P.R. (posting reference). This will be used when the entries are posted, that is, until the amounts
are transferred to the related ledger accounts.
d. Debut. The debit amount for each account is entered in this column.
e. Credit. The credit amount for each account is entered in this column.
Consider this transaction: “September 1, 2020, Mr. Huerto invested P150,000 in cash to start the business.”

Date Account Titles and Explanation P.R. Debit Credit

2020
Sept 1 Cash 150,000
Huerto, Capital 150,000
Initial investment

POSTING JOURNAL ENTRIES

Posting means transferring the amounts from the journal to the appropriate accounts in the ledger. Debits
in the Journal are posted as debits in the ledger, and credits in the journal as credits in the ledger. The
Ledger provides for a running balance every time that there are postings.

The Journal

Date Account Titles and Explanation P.R. Debit Credit

2020
Sept 1 Cash 110 150,000
Huerto, Capital 310 150,000
Initial investment

The Ledger

Account: Cash Account No: 110

Date Explanation J.R. Debit Credit Balance
2020
Sept 1 Initial Investment J-1 150,000 150,000

Account: Huerto, Capital Account No: 310

Date Explanation J.R. Debit Credit Balance
2020
Sept 1 Initial Investment J-1 150,000 150,000

TRIAL BALANCE

The trial balance is a list of all accounts with their respective debit or credit balances. It is prepared to verify
the equality of debits and credits in the ledger at the end of each accounting period or at any time the
postings are updated.

The procedures in the preparation of a trial balance follow:

1. List the account titles in numerical order (based on the account numbers).
2. Obtain the account balance of each account from the ledger and enter the debit balances in the
debit column and the credit balances in the credit column.
3. Add the debit and credit columns.
4. Compare the totals.
 Here is a sample trial balance:

Weddings “R” Us
Trial Balance
December 31, 2020

Cash P 22,200
Accounts Receivable 12,000
Supplies 18,000
Prepaid Rent 8,000
Prepaid Insurance 14,400
Service Vehicle 420,000
Office Equipment 60,000
Notes Payable P210,000
Accounts Payable 53,000
Utilities Payable 1,400
Unearned Referral Revenues 10,000
Diaz, Capital 250,000
Diaz, Withdrawals 14,000
Consulting Revenues 62,400
Salaries Expense 13,800
Utilities Expebnse 4,400
P586,800 P586,000

II. Checking for Understanding

You are given the following transactions, fill the table provided with the accounts affected for each
transaction, whether it will increase or decrease, and debit or credit entry. Use the following accounts in your
answer: Cash; Accounts Receivable; Office Supplies; Computer Equipment; Accounts Payable; Sabio, Capital;
Consulting Revenues; Rent Expense; Salaries Expense; and Utilities Expense.

Maurice Sabio is a financial planning consultant. She completed the following transactions during the month of
March 2020.

Increase/ Debit/
Transactions Accounts Affected
Decrease Credit
Sabio invested cash in the business,
P200,000.
Paid March office rent, P10,000

Bought computer equipment worth

P50,000, paid 20,000 in cash and the
balance of P30,000 on account.
Bought office supplies on account, P2,800.

Received P25,000 from a client for services

rendered.
Billed a client for P12,500 for services
rendered on account.
 Paid salaries amounting to P27,250.
Paid telephone bills, P3,450.

Made partial payment on supplies

purchased on account, P1,500.
Collected P7,500 in cash for services
rendered on March 12.

III. ANALYSIS

Directions: Answer the following questions below, but limit your answer to three sentences only.
1. How would you determine if an account balance in the ledger would appear as debit or credit in the trial
balance?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
________________________________________________________

2. If you prepared a trial balance having an unbalanced total debit and total credit, what would you do to
resolve the unbalanced trial balance issue?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
________________________________________________________

3. Give one (1) way you can do to decrease the likelihood of preparing an unbalanced trial balance?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
______________________________________________________________________

IV. INTERGRATION

Directions: Using the 3 – 2 – 1 chart below, supply your answers in the space provided.

1. Give 3 most significant learnings about the topic.

a.
b.
c.
2. Give 2 things you would like to clarify regarding the topic.
a.
b.
.
3. Give 1 question you would like to be enlightened.
a.
V. INDEPENDENT PRACTICE

Vincent Fabella owns the Jose Rizal Heavy Bombers, a collegiate basketball team in the PhilAm Basketball
Association. Presented below is the November 30, 2020 trial balance representing activities from January 1, 2020 to
November 30, 2020, together with the account numbers and titles:

Jose Rizal Heavy Bombers

Trial Balance
November 30, 2020

Acct. No. Account Titles Debit Credit

110 Cash P 1,129,800
120 Accounts Receivable 3,712,500
130 Uniform Supplies 31,050
140 Prepaid Insurance -0-
150 Land 2,025,000
160 Training Facilities 12,750,000
170 Training Equipment 2,625,000
180 Player Contracts 11,250,000
210 Notes Payable P 1,800,000
220 Accounts Payable 4,725,000
230 Mortgage Payable 10,500,000
310 Fabella, Capital 17,643,750
320 Fabella, Withdrawals 1,875,000
410 Game Attendance Revenues 10,125,000
510 Salaries Expense 4,875,000
520 Advertising Expense 400,950
530 Travel Expense 1,532,400
540 Laundry Expense 528,000
550 Medical Expense 194,550
560 Utilities Expense 1,734,000
570 Miscellaneous Expense 130,500 .
Totals P 44,793,750 P 44,793,750

During the month of December 2020, the Bombers were participating in the 2020 playoffs and the following
transactions took place:
Dec 1 Acquired the contract of Agustin Tiongco (player) from the Negros Navigators (team)
for P1,875,000; paying P225,000 in cash and financing the P1,650,000 by issuing a note
payable.
2 Collected P2,809,500 on accounts receivable from season-ticket holders.
3 Settled accounts payable, P1,657,500.
4 Paid for TV advertising, P78,600.
5 Acquired on account additional uniforms for the upcoming series with the San Alcantara
Padres, P30,750.
9 Billed season-ticket holders for the last five games, P320,250.
10 Paid the amount due on this date on the note payable, P600,000.
11 Acquired insurance for the months of December to June, P215,250. Recorded as prepaid
Insurance.
12 Acquired additional training equipment on account, P319,500.
15 Paid players’ salaries, P1,136,250.
17 Received P3,316,050 cash for tickets to playoff games.
 19 Paid travel expenses to San Alcantara, P558,000.
20 Paid laundry expenses, P12,600.
23 Paid creditors, P941,850.
25 Paid miscellaneous expenses, P26,850.
26 Paid medical expenses, P18,900.
27 Paid utilities expenses, P210,450.
28 Paid players’ salaries, P1,240,650.
30 Vincent Fabella withdrew P250,000.

Required:
a. Enter the amounts from the November 2020 trial balance into the appropriate ledger accounts.
b. Prepare the journal entries for the December transactions.
c. Post the entries to the ledger.
d. Prepare a trial balance as of December 31, 2020.

VI. RESOURCES

Ballada, W. and Ballada S., (2015). Accounting Fundamentals. Domdane Publishers

Valix C.T., Peralta F.J, Valix C.A.M. (2019). Conceptual Framework and Accounting Standards. GIC
Enterprises & Co., Inc.

Prepared by: Checked by: Approved by:

AURELIO C. LOPEZ JR. NIMFA M. TAYCO REY V. DE LOS REYES

Fund. of ABM Teacher Asst. Principal SHS Principal
09387770402
[email protected]