ACC111 Week1-3 ULOe - FINANCIAL ACCOUNTING AND REPORTING PDF (SIM)- LESSON 3 ABOUT FUNDAMENTAL CONCEPTS PDF

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FINANCIAL ACCOUNTING AND REPORTING PDF (SIM)- LESSON 3 ABOUT FUNDAMENTAL CONCEPTS AND BASIC PRINCIPLES IN ACCOUNTING


Several fundamental concepts underlie in the accounting process and the accountants should consider the following :...

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Department of Accounting Education Mabini Street, Tagum City Davao del Norte Telefax: (084) 655-9591, Local 116

Big Picture in Focus: ULOe. Describe, analyze and distiguish the effect of business transactions to the financial transaction worksheet.

Metalanguage For you to demonstrate ULOe, you will need operational understanding of the terms enumerated below. Financial Transaction Worksheet a report that helps the accountant to understand the effects of the transactions in the elements of financial statements.

Essential Knowledge To perform the aforesaid big picture (unit learning outcomes), you need to fully understand the following essential knowledge laid down in the succeeding pages. Please note that you are not limited to exclusively refer to these resources. Thus, you are expected to utilize other books, research articles and other resources that are available in the university’s library e.g. ebrary, search.proquest.com etc., and even online tutorial websites. Financial Transaction Worksheet The accounting equation is used to analyze and expresses in term of effects in the accounting equation. Illustrations: Nelosencio Dagantino formed a business named Lamyon Ramen Restaurant on January 2020. During the month the following transactions occurred. Jan. 1 He deposited P 390,000 amount to Moi Money Bank. 2 Acquired a service vehicle for P 195,000 on account. 3 Acquired office supplies for cash P 65,000. 9 Received P 95,000 cash for Ramyon orders. 10 Paid the month rental, P 30,000. 11 Deliver the catering order to UMYUN Co. on account, P199,000. 12 Paid the 50% of the account on Jan. 2 transaction. 19 Collected P 100,000 from UMYUN Co. account. 24 Withdrew P 27,000 cash for personal use 28 Pay the salaries for the month P 66,000. 30 Pay utilities in the amount of P 29,600. 31 Receive bill from Ad Ad Ver Co. P 36,500 for advertising. Prepare Financial Transaction worksheet.

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Department of Accounting Education Mabini Street, Tagum City Davao del Norte Telefax: (084) 655-9591, Local 116

Solution: Date

Type

1 2

SA SA

390,000

3

EA

-65,000

9

SA

95,000

10

UA

-30,000

11

SA

12

UA

-97,500

19

EA

100,000

24

UA

28

UA

30

UA

-29,600

31

EC

TOTAL

Cash

Accounts Receivables

Supplies

Service Vehicle

Accounts Payable

195,000

195,000

Dagantino, Capital 390,000

Remarks on Capital Initial Capital

65,000 95,000

Income

- 30,000

Expenses

199,000

Income

-27,000

-27,000

Withdrawal

-66,000

-66,000

Expenses

199,000

269,900

-97,500 -100,000

99,000

65,000

-29,600

Expenses

36,500

-36,500

Expenses

195,000

134,000

494,900

628,900

628,900

Self-Help: You can also refer to the sources below to help you further understand the lesson. You can also refer to the sources below to help you further understand the lesson: Ballada, W. and Ballada, S. (2018). Basic finacial accounting and repoting (21st ed.). Manila: DomDane Publishers. Ballada, W .and Ballada, S. (2015). Basic accounting: made easy (2015 ed.). Manila: DomDane Publishers. Lopez, R. M. (2016). Basic accounting for non-accountants: simplified approach.(2016 ed., Vol. 1). Ma-a, Davao City: MS Lopez Printing & Pub. Note: The content of this manual is based on the textbook for ACC 111 titled “Basic Financial Accounting and Reporting” by Ballada, Win, CPA, CBE, MBA and Ballada, Susan, CPA

Let’s Check! I. Questions: 1. What is financial transaction worksheet? ________________________________________________________ ________________________________________________________ ________________________________________________________ 2

Department of Accounting Education Mabini Street, Tagum City Davao del Norte Telefax: (084) 655-9591, Local 116

2. What is asset? ________________________________________________________ ________________________________________________________ ________________________________________________________ 3. What is liability and equity? ________________________________________________________ ________________________________________________________ ________________________________________________________ II.

True or False 1. Assets are normally had debit balance. 2. Assets when increases it would be debited. 3. When cash is received, it is always recorded as increase in cash and a decrease in an expense accounts. 4. Every transaction is recorded in terms of increase and/or decrease in two or more accounts. 5. Both sides of the fundamental accounting equation must always be equal.

III.

Multiple Choice 1. The entity borrows P3,000 and deposit it in to the account of the entity’s bank account. Which of the following is correct? a. The asset of the company will increase by 3,000 b. The asset of the company will decrease by 3,000 c. The liability of the company will decrease by 3,000 d. The withdrawals of the company will increase by 3,000 2. Which of the following will transaction will affect the liabilities of the entity? a. Purchases from supplier by cash b. Interest received from bank c. Office equipment purchased on account d. Goods sold to customers on credit 3. The business repays his debt P 50,000.00 by transferring money into the bank account of the creditor. The effect of this transaction to the accounting equation would be: a. Both assets and liabilities increase by 50,000 b. Both assets and liabilities decrease by 50,000 c. Only assets will decrease by 50,000 d. Assets and liabilities remain unchanged. 4. The company opens on September 1, 2020, the owner transfer offices equipment of 50,000 and bought inventory 30,000 to the business. The owner put 180,000 cash deposited to the bank. The bank get a 100,000 loan from a bank and lend 50,000 to sister company. What is the total amount of the Owner’s Capital? a. 260,000 b. 210,000 c. 360,000 d. 310,000 5. The entity purchase 10,000 furniture and fixture for entity use on credit, which of the following will be affected? a. Assets and Liabilities c. Liabilities and Owner’s Equity 3

Department of Accounting Education Mabini Street, Tagum City Davao del Norte Telefax: (084) 655-9591, Local 116

b. Assets and Owner’s Equity Equity

d.

Assets, liabilities and Owner’s

Let’s Analyze! Problem 1. Peraltino De Gracia Realtors opened up a business and the following transactions occurred during the month of September 2020. a. Deposited 320,000 cash to the bank in the name of the business b. Bought office equipment on account, 175,000 c. Invested his personal car in the business amounted to 450,000 d. Paid rent for the month 9,000 e. Bought office supplies for cash 95,000. f. Paid fire insurance policy for 1 year 24,000 for the equipment. g. Received professional fee for services rendered 65,000. h. Paid the landline bill 17,500. i. Paid salaries for the month 36,000 j. Paid advertising 8,000. k. Render services on account for 120,000 l. Paid ½ of the account in transaction b. m. Withdrew cash for personal use 32,000 Required: 1. Indicate what type of transaction. 2. Prepare financial transaction worksheet using the following accounts: Cash, Accounts Receivable, Office Supplies, Office Equipment, Service Vehicle, Accounts Payable, De Gracia, Capital. 3. Indicate every transaction reflected in the capital account. (investment, withdrawal, Revenue or Expenses)

In a Nutshell Activity 1. Indeed, the financial transaction worksheet help us to analyze the business transactions in terms of increase and decrease in accounts. Based from the discussion and the learning exercises that you have done, please feel free to write your arguments or lessons learned below. I have indicated my arguments or lessons learned. 1. ________________________________________________________________ ________________________________________________________________ __________________________________________________________ 2. ________________________________________________________________ ________________________________________________________________ __________________________________________________________

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Department of Accounting Education Mabini Street, Tagum City Davao del Norte Telefax: (084) 655-9591, Local 116

3. ________________________________________________________________ ________________________________________________________________ __________________________________________________________ 4. _______________________________________________________________ ________________________________________________________________ __________________________________________________________ 5. ________________________________________________________________ ________________________________________________________________ __________________________________________________________ 6. ________________________________________________________________ ________________________________________________________________ __________________________________________________________ 7. ________________________________________________________________ ________________________________________________________________ __________________________________________________________ 8. ________________________________________________________________ ________________________________________________________________ _________________________________________________________ 9. ________________________________________________________________ ________________________________________________________________ __________________________________________________________ 10. ________________________________________________________________ ________________________________________________________________ __________________________________________________________

Q&A List Do you have any question for clarification? Questions/Issues 1. 2. 3. 4. 5.

Answers

Keywords index Financial Transaction Worksheet

Accounting Equation

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