CBLM Bookkeeping

HOW TO USE THIS COMPETENCY-BASED LEARNING MATERIAL
Welcome to the module in Journalizing Transactions for Single

Proprietorship. This module contains training materials and activities for
you to complete.
The
unit
of
competency
Journalize
Transaction
for
Single
Proprietorship covers the knowledge, skills, and attitudes required to

complete so as to qualify you in the National Certification in Bookkeeping NC
III.
You are required to go through a series of learning activities in order
to complete each learning outcome of the module. Each of the learning
outcomes is provided with Information Sheets. Follow these activities on
your own and answer the self-check at the end of each learning outcome.
You may remove a blank answer sheet at the end of each module (or get the
answer sheets from the facilitator) to write the answers for each self-check. If
you have questions, dont hesitate to ask your facilitator for assistance.
RECOGNITION OF PRIOR LEARNING (RPL)
You may already have some or most of the knowledge and skills
covered in this learners guide because you have:
Been working for some time.
Already completed training in this area.
If you can demonstrate to your trainer that you are competent in a
particular skill or skills, talk to the facilitator about having them formally
recognized so you do not have to do the same training again. If you have
Competency-based Learning
Material for
BOOKKEEPING
NC III
Module Title: Journalize
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 1 of 39
qualification or Certificate of Competency from the previous trainings, show

it to the facilitator. If the skills you acquired are still current and relevant to
the unit/s of competency they may become part of the evidence you can
present for RPL. If you are not sure about the currency of your skills,
discuss this with your facilitator.
At the end of this module is a Learners Diary. Use the diary to record
important dates, jobs undertaken and other workplace events that will
assist you in providing further details to your facilitator/ assessor. A Record
of Achievement is also provided by your facilitator to complete once you
complete the module.
This module was prepared to help you achieve the required competency
in Bookkeeping NC III. This will be the source of information for you to
acquire knowledge and skills in this particular trade independently and at
your own pace, with minimum supervision or help from your instructor.
Talk to your facilitator and agree on how you will both organize the
Training of this unit. Read through the module carefully. It is divided
into sections, which cover all the skills and knowledge you need to
successfully complete this module.
Work through all the information and complete the activities in each
section. Read information sheets and complete self check. Suggested
references are included to supplement the materials provided in this
module.
Most probably your facilitator will be your supervisor or manager. Your
facilitator will support and correct you.
Your facilitator will tell you about the important things you need to
consider when you are completing activities and it is important that
you listen and take notes.
You will be given plenty of opportunity to ask questions and practice
on the job. Make sure you practice new skills during regular work
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 2 of 39
shifts. This way you will improve both your speed and memory and
also your confidence.
Talk to more experience work-mates and ask for their guidance.
Use the self-check questions at the end of each section to test your
own progress.
When you are ready, ask your facilitator to watch you perform the
activities outlined in this module.
Ask you work through the activities; ask for written feedback on your
progress. Your facilitator keeps feedback/ pre-assessment reports for
this reason. When you have successfully completed each element, ask
the facilitator to mark on the reports that you are ready for
assessment.
When you have completed this module, and feel confident that you
have
had
sufficient
practice,
your
facilitator
will
arrange
an
appointment with registered assessors to assess you. The results of

your assessment will be recorded in your competency Achievement
Record.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 3 of 39
TABLE OF CONTENTS
How To Use This Competency-Based Learning Material1
Table of Contents .
Qualification Title
Module Content.
Learning Outcome No.3 Prepare Journal.
Learning Experiences..
Information Sheet No.1.3-1 Generally Accepted Accounting
Principles..
Self- Check No.1.3-1...........
Answer for Self-Check No.1.3-1..........
Information Sheet No.1.3-2 Accounting Equation .....
Self- Check No.1.3-2..
Answer for Self-Check No.1.3-2....
Information Sheet No.1.3-3 Journalizing of Proprietor
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
4
.
6
7
8
9-11
12
13
14-17
18
19
Document No.
Issued by:
Revision No.
Page 4 of 39
Account Titles
....
20-24
Self- Check No.1.3-3..
25
Answer for Self-Check No.1.3-3....
26
Job Sheet 1.3-1 Prepare Journal Entry. .
27-29
Answer Key Job Sheet .
30-31
Performance Criteria Checklist 1.3-1 .
32
QUALIFICATION TITLE
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 5 of 39
COMPETENCY BASED LEARNING MATERIALS

List of Competencies
No.
Unit of
Module Title
Code
Competency
CORE
COMPETENCIES
Units
of
Competency
Journalize
transactions
CODE NO.
Journalizing
HCS412301
transactions for
single
proprietorship
Journalizing
transactions for
partnership
Journalizing
transactions for
2
3
4
Post transactions
Prepare
trial
balance
corporation
Posting transactions
Preparing trial
Prepare financial
reports
balance
Preparing financial
HCS412302
HCS412303
HCS412304
reports for single
proprietorship
Preparing financial
reports for
partnership
Preparing financial
reports for
Review
internal
control system
Material for
BOOKKEEPING
NC III
Transactions
corporation
Reviewing internal
HCS412305
control system
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 6 of 39
MODULE CONTENT
Qualification Title:
Book Keeping NC III
Unit of Competency:
Journalize Transactions
Module Title:
Journalizing Transactions for

Single Proprietorship
Introduction: This unit covers the knowledge, skills, and attitudes in

logging/recording business transactions in an accounting journal.
Learning Outcome:
Upon completion of this module, you must be able to:
1. Prepare chart of accounts
2. Analyze documents
3. Prepare journal entry
Assessment Criteria:
1. List of asset, liability, equity, income, and expense account titles
are prepared in accordance with Generally Accepted Accounting
Principles.
2. Chart of Accounts is coded according to industry practice.
3. Documents are gathered, checked and verified in accordance with
verification and validation processes.
4. Account titles are selected in accordance with standard selection
processes.
5. Journal entries are prepared in accordance with generally accepted
accounting principles.
6. Debit and credit account titles are determined in accordance with
chart of accounts.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 7 of 39
7. Explanation to journal entry is prepared in accordance with the

nature of transaction.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 8 of 39
LEARNING OUTCOME NO. 3
PREPARE JOURNAL ENTRY
CONTENTS:
1. Generally Accepted Accounting Principles
2. Accounting Equation
3. Journalizing of Proprietor Account Titles
ASSESSMENT CRITERIA:
1. Journal entries are prepared in accordance with generally accepted
accounting principles.
2. Debit and credit account titles are determined in accordance with
chart of accounts.
3. Explanation to journal entry is prepared in accordance with the
CONDITIONS:
The students/trainees must be provided with the following:
1. Calculator
2. Journal Paper
3. Learning Materials
4. Pencil
5. Eraser
6. Philippine Financial Reporting Standards
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 9 of 39
ASSESSMENT METHOD:
1.
Written test
2.
Practical/performance test
3.
Interview
4.
Practical exercises
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 10 of
39
LEARNING EXPERIENCES
Learning Outcome No.3 PREPARE JOURNAL ENTRY
1. Read Information Sheet 1. 3-1
On Generally Accepted
Accounting Principles
2. Answer Self-Check 1. 3-1
Compare your answers with
In this lesson, you need to learn that

Journals are prepared in accordance
with industry practice and
Answer Key 1.3-1

generally accepted accounting
on Accounting Equation
Reporting Standards for
Answer Key 1.3-2

on Journalizing of Proprietor
Account Titles
principles/Philippine Financial
transactions and events.

Debit account titles are determined in
accordance with chart of accounts
Credit account titles are determined in
accordance with chart of accounts
Answer Key 1.3-3

7. Perform Job Sheet 1. 3-1 on
how to prepare Journal entry
with 100% accuracy
Go through the Information Sheets

and answer the self-checks to ensure
the knowledge you have learned in
Journalizing Transactions
Show your output to your trainer for
the feedback/evaluation.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 11 of
39
INFORMATION SHEET No.1.3-1

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Learning Objectives:
After reading this information sheet, you should be able to:
1. Identify the Generally Accepted Accounting Principles.
2. Explain the importance of Generally Accepted Accounting Principles
(GAAP)
GENERALLY ACCEPTED ACCOUNT PRINCIPLES
GAAP is an international convention of good accounting practices. It is

based on the following core principles. In certain instances particular types
of accountants that deviate from these principles can be held liable.
The Business Entity Concept
The business entity concept provides that the accounting for a
business or organization be kept separate from the personal affairs of its
owner, or from any other business or organization. This means that the
owner of a business should not place any personal assets on the business
balance sheet. The balance sheet of the business must reflect the financial
position of the business alone. Also, when transactions of the business are
recorded, any personal expenditures of the owner are charged to the owner
and are not allowed to affect the operating results of the business.
The Continuing Concern Concept
The continuing concern concept assumes that a business will
continue to operate, unless it is known that such is not the case. The values
of the assets belonging to a business that is alive and well are
straightforward. For example, a supply of envelopes with the company's
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 12 of
39
name printed on them would be valued at their cost. This would not be the
case if the company were going out of business. In that case, the envelopes
would be difficult to sell because the company's name is on them. When a
company is going out of business, the values of the assets usually suffer
because they have to be sold under unfavourable circumstances. The values
of such assets often cannot be determined until they are actually sold.
The Principle of Conservatism
The principle of conservatism provides that accounting for a business
should be fair and reasonable. Accountants are required in their work to
make evaluations and estimates, to deliver opinions, and to select
procedures. They should do so in a way that neither overstates nor
understates the affairs of the business or the results of operation.
The Objectivity Principle
The objectivity principle states that accounting will be recorded on the
basis of objective evidence. Objective evidence means that different people
looking at the evidence will arrive at the same values for the transaction.
Simply put, this means that accounting entries will be based on fact and not
on personal opinion or feelings.
The source document for a transaction is almost always the best
objective evidence available. The source document shows the amount agreed
to by the buyer and the seller, who are usually independent and unrelated to
each other.
The Time Period Concept
The time period concept provides that accounting take place over
specific time periods known as fiscal periods. These fiscal periods are of
equal length, and are used when measuring the financial progress of a
business.
The Revenue Recognition Convention
The revenue recognition convention provides that revenue be taken
into the accounts (recognized) at the time the transaction is completed.
Usually, this just means recording revenue when the bill for it is sent to the
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 13 of
39
customer. If it is a cash transaction, the revenue is recorded when the sale is

completed and the cash received.
It is not always quite so simple. Think of the building of a large project
such as a dam. It takes a construction company a number of years to
complete such a project. The company does not wait until the project is
entirely completed before it sends its bill. Periodically, it bills for the amount
of work completed and receives payments as the work progresses. Revenue is
taken into the accounts on this periodic basis.
It is important to take revenue into the accounts properly. If this is not
done, the earnings statements of the company will be incorrect and the
readers of the financial statement misinformed.
The Matching Principle
The matching principle is an extension of the revenue recognition
convention. The matching principle states that each expense item related to
revenue earned must be recorded in the same accounting period as the
revenue it helped to earn. If this is not done, the financial statements will
not measure the results of operations fairly.
The Cost Principle
The cost principle states that the accounting for purchases must be at
their cost price. This is the figure that appears on the source document for
the transaction in almost all cases. There is no place for guesswork or
wishful thinking when accounting for purchases.
The value recorded in the accounts for an asset is not changed until
later if the market value of the asset changes. It would take an entirely new
transaction based on new objective evidence to change the original value of
an asset.
There are times when the above type of objective evidence is not
available. For example, a building could be received as a gift. In such a case,
the transaction would be recorded at fair market value which must be
determined by some independent means.
The Consistency Principle
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 14 of
39
The consistency principle requires accountants to apply the same

methods and procedures from period to period. When they change a method
from one period to another they must explain the change clearly on the
financial statements. The readers of financial statements have the right to
assume that consistency has been applied if there is no statement to the
contrary.
The consistency principle prevents people from changing methods for
the sole purpose of manipulating figures on the financial statements
SELF-CHECK No.1.3-1
Identify the following.
_______________1.This is an international convention of good accounting
practices.
_______________2. It provides that the accounting for a business or
organization be kept separate from the personal affairs of
its owner or from any other business or organization.
_________________3. This states that accounting will be recorded on the
basis of objective evidence.
_________________4. This provides that accounting for a business should be
fair and reasonable.
_________________5. It states that the accounting for purchases must be at
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 15 of
39
their cost price.

_________________6. It requires accountants to apply the same methods and
procedures from period to period.
_________________7. This is an extension of the revenue recognition
convention.
_________________8. This provides that revenue be taken into the accounts at
the time the transaction is completed.
_________________9. This provides that accounting take place over specific
time periods known as fiscal periods.
________________10. This assumes that a business will continue to operate
unless it is known that such is not the case.
Answer Key for Self-Check No. 1.3-2

1.
2.
3.
4.
5.
6.
Generally Accepted Accounting Principles (GAAP)

The Business Entity Concept
The Objectivity Principle
The Principles of Conservatism
The Cost Principle
The Consistency Principle
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 16 of
39
7. The Matching Principle

8. The Revenue Recognition Convention
9. The Time Period Concept
10. The Continuing Concern Concept
ACCOUNTING EQUATION
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 17 of
39

1. Familiarize the accounting equation.
2.Differentiate assets, liabilities and equities.
ACCOUNTING EQUATION
Business transactions affect the assets, liabilities, and proprietorship

of the business. These effects can be in the accounting equation.
ASSETS = EQUITIES
Assets include anything owned or possessed by the business which is
capable of being expressed in terms of money or possessing monetary
values, and which, consequently is available for the payment of the debts of
the business.
Equity include all the vested rights of person in the assets of the business.
It is classified into the following:
1 Equity of outsiders or amounts owing to persons other than the owners
of the business, technically known as liabilities
2 Equity of owner, known in the accountants language as capital
LIABILITIES
EQUITIES
CAPITAL
Since there are two sources of equities, one from the creditors and the other
from the owner, then we can express the accounting equation as:
ASSETS = LIABILITIES + CAPITAL
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 18 of
39
Every transaction must be analyzed with respect to its effects on the assets,
liabilities and capital of the business. A transaction involves at least two of
the elements appearing on the accounting equation.
To illustrate, assume the following transactions:
Oct. 1- Mr. Juan Dela Cruz opened a motor repair shop and invested P100
000 cash.
A
=
L
Cash
=
P100 000
=
0
P100 000
=
P100 000
Effect: Increase in asset, increase in capital
+
+
+
C
Gil, capital
P100 000
Oct. 3- He purchased repair supplies worth P25 000 on credit from Rosario
Trading.
A
=
L
+
C
Cash+Repair Supplies
=
Accounts Payable +
Gil, capital
P100 000+P25 000
=
P25 000
+100 000
P 125 000
=
P 125 000
Effect: Increase in asset, increase in liabilities
Oct. 5- He bought a table and chairs for the business, P 6 000 in cash.
A
=
L
+
C
Cash+Repair Supplies+Furniture
=
Accounts payable +
Gil,
capital
P100 000+P25 000+P6 000
=
P25 000
+
P100 000
(6 000)_____________________ =
__0_________________0_____
P94 000+P25 000+P6 000
=
P25 000
+
P100
000
P 125 000
=
P125 000
Effect: Increase in one form of asset, decrease in another form of asset
Oct. 12- Issued a promissory note to Rosario Trading to apply on his
account in Oct. 3.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 19 of
39
A
=
L
+
C
=Accounts payable+Notes payable+Gil,
capital
P94 000+P25 000+P6 000
=
P25 000
+
P100 000
0
=
(25 000)
+ P25 000 +
0
P94 000+P25 000+P6 000
=
0
+P25 000 +
P100 000
P 125 000
=
P125 000
Effect: Decrease in one form of liabilities, increase in another form of
liabilities.
Oct. 15- Paid the salary of the assistant, P 2 000.
A
=
L
+
C
=Accounts payable+Notes payable+Gil,
capital
P94 000+P25 000+P6 000
=
0
+ P 25 000
+P100 000
( 2 000)
=
0
+(
2 000)
P92 000+P25 000+P6 000
=
0
+ P 25 000+P 98
000
P 123 000
=
P 123 000
Effect: Decrease in asset, decrease in capital
Oct. 20- Paid the note issued to Rosario Trading in Oct. 12.
A
=
L
+
C
=Accounts payable+Notes payable+
Gil, capital
P92 000+P25 000+P6 000
=
0
+ P 25 000+ P
98 000
(25 000)
=
(25 000) +
0________
P67 000+P25 000+P6 000
=
0
+
P98 000
P 98 000
=
P 98 000
Effect: Decrease in asset, decrease in liabilities
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 20 of
39
To illustrate the whole transaction using accounting equation:

A
=
L
+
C
=Accounts payable+Notes
payable+Gil, capital
Oct. 1 P100 000
=
0
+P100
000
Oct. 3
_____ P 25 000
=
P25 000
+
0_______
P100 000+P25 000
=
P25 000
+100 000
P 125 000
= P 125 000
Oct. 5
(6 000)
P6 000
=
0
+
0
P94 000+P25 000+P6 000
=
P25 000
+P100 000
P 125 000 = P125 000
Oct. 12 _______0
=
(25 000)
+ P25 000 +P100
000
P94 000+P25 000+P6 000
=
0
+P25 000
+P100 000
P 125 000
= P125 000
Oct. 15( 2 000)
=
0
+(
2
000)
P92 000+P25 000+P6 000
=
0
+ P 25
000+P 98 000
P 123 000 = P 123 000
Oct. 20 (25 000)
=
(25
000+0________
P67 000+P25 000+P6 000
=
0
+
P98 000
P 98 000 =
P 98 000
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 21 of
39
Self Check No. 1.3-2
State the effects of the following transactions on the assets, liabilities and
capital by putting a check if there is an increase or decrease on them.
Transactions
Assets
Inc
Dec.
Liabilities
Inc.
Dec.
Capital
Inc.
Dec.
1.Purchased supplies for

cash
2.Purchased equipment
on account
3.The owner invested cash
in the business
4.Paid the equipment
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 22 of
39
purchased in no. 2
5.Borrowed money from
the bank to be used in
the business
6.The owner withdraw
cash for his personal
use
7.Purchased furniture and
fixture on account
8.Purchased defective
furniture purchased in
no. 7
9.Purchased additional
supplies on account
10. Paid half of the loan in
no. 5
Answer Key for Self-Check No. 1.3-2
Transactions
Assets
Inc
Dec.
Liabilities
Inc.
Dec.
Capital
Inc.
Dec.
1.Purchased supplies for

Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 23 of
39
cash
2.Purchased equipment
on account
3.The owner invested cash
in the business
4.Paid the equipment
purchased in no. 2
5.Borrowed money from
the bank to be used in
the business
6.The owner withdraw
cash for his personal
use
7.Purchased furniture and
fixture on account
8.Returned defective
furniture purchased in
no. 7
9.Purchased additional
supplies on account
10. Paid half of the loan in
no. 5
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 24 of
39

JOURNALIZING OF PROPRIETOR ACCOUNT TITLES
1. Define journalizing.
2. Determine the accounting cycle.
3.Journalize transactions
JOURNALIZING
Journalizing is the first step in the accounting cycle. It is the process

of recording business transactions in a journal. In order to have a
permanent record of an entire transaction, the accountant uses a book or
record known as a journal. A journal entry is the recording of a business
transaction in a journal. A journal entry shows all of the effects of a
transaction as expressed in terms of debit and credit and may include an
explanation of the transaction. A transaction is entered in a ledger accounts.
Because each transaction is initially recorded in a journal rather than
directly in the ledger, a journal is called the book of original entry. The
journal contains chronological or date wise record of business transactions,
the account debited and credited their respective amounts. Each entry is
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 25 of
39
recorded so that the duality or equilibrium or recording is maintained in

equation form:
Assets = Liabilities + Owner's Equity
and
Debits = Credits
Steps for the Process of Journalizing:
Following are the steps involved in the process of journalizing a transaction:
(i) Determine the titles of the accounts involved.
(ii) Understand nature of the accounts.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 26 of
39
(iii) Apply the rule of Debit & Credit described above.
(iv) And make the necessary journal entry.
JOURNAL EXAMPLE
The following illustration draws upon the facts for the Xao Corporation.
Specifically it shows the journalizing process for Xaos transactions. Review
it carefully, specifically noting that it is in chronological order with each
transaction of the business being reduced to the short-hand description of
its debit/credit effects. For instance, the first transaction increases both
cash and equity. Cash, an asset account, is increased via a debit. Capital
Stock, an equity account, is increased via a credit. The next transaction
increases Advertising Expense "with a debit" and decreases Cash "with a
credit."
Note that each transaction is followed by a brief narrative description;
this is a good practice to provide further documentation. For each
transaction, it is customary to list "debits" first (flush left), then the credits
(indented right). Finally, notice that a transaction may involve more than two
accounts (as in the January 28 transaction); the corresponding journal
entry for these complex transactions is called a "compound" entry.
In reviewing the general journal for Xao, note that it is only two pages
long. An actual journal for a business might consume hundreds and
thousands of pages to document its many transactions. As a result, some
businesses may maintain the journal in electronic form only.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 27 of
39
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 28 of
39
SPECIAL JOURNALS
The illustrated journal was referred to as a "general" journal. Most

businesses will maintain a general journal. All transactions can be recorded
in the general journal. However, a business may sometimes find it beneficial
to employ optional "special journals." Special journals are deployed for
highly redundant transactions.
For example, a business may have huge volumes of redundant
transactions that involve cash receipts. Thus, the company might have a
special cash receipts journal. Any transaction entailing a cash receipt would
be recorded therein. Indeed, the summary total of all transactions in this
journal could correspond to the debits to the Cash account, further
simplifying the accounting process. Other special journals might be used for
cash payments, sales, purchases, payroll, and so forth.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 29 of
39
The special journals do not replace the general journal. Instead, they
just strip out recurring type transactions and place them in their own
separate journal. The transaction descriptions associated with each
transaction found in the general journal are not normally needed in a
special journal, given that each transaction is redundant in nature. Without
special journals, a general journal can become quite voluminous.
PAGE NUMBERING
Second, notice that the illustrated journal consisted of two pages
(labeled Page 1 and Page 2). Although the journal is chronological, it is
helpful to have the page number indexing for transaction cross-referencing
and working backward from financial statement amounts to individual
transactions. The benefits of this type of indexing will become apparent in
the general ledger exhibits within the following section of the chapter. As an
alternative, some companies will assign a unique index number to each
transaction, further facilitating the ability to trace transactions throughout
the entire accounting system.
RECAP
The general journal does nothing to tell a company about the balance
in each specific account. For instance, how much cash does Xao
Corporation have at the end of January? One could go through the journal
and net the debits and credits to Cash (P25,000 - P2,000 + P4,000 - P500 +
P4,800 - P5,000 = P26,300). But, this is tedious and highly susceptible to
error. It would become virtually impossible if the journal were hundreds of
pages long. A better way is needed. This is where the general ledger comes
into play.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 30 of
39
Self Check No. 1.3-3

Comprehension: Following are the steps involved in the process of
journalizing a transaction, analyze the following transactions. Write in the
blank the proper account titles.
Mr. Jon invests $5000 cash in the business. Let us analyze this transaction.
(i) Title of relevant accounts : 1.)________________ and 2.)________________
(ii) Nature of account : 3.)_______________________and 4.)________________
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 31 of
39
(iii) Apply the rule : 5.)_____________________ Debit and 6.) ____________Credit
(iv) Journal entry : 7.)___________ Debit. and 8.)___________________9.)Credit

P_____________
10.The transaction above is also called as__________________________
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 32 of
39
Answer Key for Self Check 1.3-3
11.
12.
13.
14.
15.
16.
17.
18.
19.
Cash
Capital
Assets
Equity
Cash
Capital
Cash
Capital
5000
10. Journalizing
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 33 of
39
JOB SHEET No. 1.3-1

Title: Prepare Journal Entry
Given one Learning Outcome on Preparing
Performance Objective:
Journal Entry, you should be able to

journalize transactions.
Supplies and Materials:
Calculator
Paper
Learning Materials
Pencil
Eraser
Steps and Procedure:

1. Based on first months operation of Mr.
Rose (refer to transactions below) determine
the titles of the accounts involved.
2. Apply the rule of debit and credit .
3. Supply an explanation of each

Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 34 of
39
transaction whenever necessary.
4. Make the necessary journal entry for

each transaction.
Assessment Method:
Written test
Practical/performance test
Interview
JOURNALIZE TRANSACTIONS
The following transactions relate to the first month's operation of Mr. Rose:
(January 1) He invested a total amount of P70000 in the form of cash,
P45000 land valued at P5000 and building valued at P20000.
(January 2) Deposited P15000 cash into the bank.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 35 of
39
(....3) Purchased merchandise for cash P3000.

(....4) Merchandise purchased on account from ABC and Company P10000.
(....5) Purchase a Delivery Truck from XYZ Autos P20000 and issued a
Promissory note.
(....6) Cash sales P5500.
(....9) Sold merchandise to MS & Co. P7500 on account.
(....12) Purchased two plots of land for cash P15000.
(....14) Purchased merchandise from NS & Co. for P15000.
(....15) Cash sales P7500.
(....16) Mr. Rose withdrew merchandise-costing P500 for personal use.
(....18) Made full payment to ABC & Co. by cheque for merchandise
purchased on credit.
(....20) Paid through cheque P1800 for a television advertisement.
(....25) Mr. Rose made an additional investment of P25000, which is
deposited into bank.
(....26) Received cheque of P5000 from MS & Co. and deposited the same
into the bank.
(....27) Withdrew cash from bank for office use P5000.
(.....28) Paid electricity bills for the month P500.
(....29) Issued a cheque of P6000 to NS & Co.
(....30) Paid salaries to staff P3000.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 36 of
39
(....31) Owner withdrew from bank P2500 for personal use.
Required: Journalize the above transactions.
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 37 of
39
PERFORMANCE CRITERIA CHECKLIST NO.1.3-1

Did you.
YES
NO
-prepare journals in accordance with industry practice and

generally accepted accounting principles/Philippine
Financial Reporting Standards for transactions and events.
-determine debit account titles in accordance with chart o
accounts.
-determine credit account titles in accordance with chart of
accounts
-prepare explanation to journal entry in accordance with the
-prepare journal entries with 100% accuracy
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 38 of
39
Comments/Suggestions:
Trainer:_____________________________________Date:____________________
Material for
BOOKKEEPING
NC III
Transactions
Date Developed:
April 2016
Developed by:
Maria Cecilia P.
Pagana
Document No.
Issued by:
Revision No.
Page 39 of
39

CBLM Bookkeeping

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

CBLM Bookkeeping

Diunggah oleh

Hak Cipta:

Format Tersedia

HOW TO USE THIS COMPETENCY-BASED LEARNING MATERIAL

Welcome to the module in Journalizing Transactions for Single

Proprietorship covers the knowledge, skills, and attitudes required to

RECOGNITION OF PRIOR LEARNING (RPL)

qualification or Certificate of Competency from the previous trainings, show

appointment with registered assessors to assess you. The results of

COMPETENCY BASED LEARNING MATERIALS

reports for single

Book Keeping NC III

Journalizing Transactions for

Introduction: This unit covers the knowledge, skills, and attitudes in

7. Explanation to journal entry is prepared in accordance with the

LEARNING OUTCOME NO. 3

PREPARE JOURNAL ENTRY

In this lesson, you need to learn that

Answer Key 1.3-1

generally accepted accounting

Reporting Standards for

Answer Key 1.3-2

transactions and events.

Answer Key 1.3-3

Go through the Information Sheets

INFORMATION SHEET No.1.3-1

GAAP is an international convention of good accounting practices. It is

customer. If it is a cash transaction, the revenue is recorded when the sale is

The consistency principle requires accountants to apply the same

their cost price.

Answer Key for Self-Check No. 1.3-2

Generally Accepted Accounting Principles (GAAP)

7. The Matching Principle

INFORMATION SHEET No.1.3-2

After reading this information sheet, you should be able to:

Business transactions affect the assets, liabilities, and proprietorship

To illustrate the whole transaction using accounting equation:

Self Check No. 1.3-2

1.Purchased supplies for

Answer Key for Self-Check No. 1.3-2

1.Purchased supplies for

INFORMATION SHEET No.1.3-3

Journalizing is the first step in the accounting cycle. It is the process

recorded so that the duality or equilibrium or recording is maintained in

Assets = Liabilities + Owner's Equity

Steps for the Process of Journalizing:

Following are the steps involved in the process of journalizing a transaction:

(i) Determine the titles of the accounts involved.

(ii) Understand nature of the accounts.

(iii) Apply the rule of Debit & Credit described above.

(iv) And make the necessary journal entry.

The illustrated journal was referred to as a "general" journal. Most

Self Check No. 1.3-3

(i) Title of relevant accounts : 1.)________________ and 2.)________________

(ii) Nature of account : 3.)_______________________and 4.)________________

(iii) Apply the rule : 5.)_____________________ Debit and 6.) ____________Credit

(iv) Journal entry : 7.)___________ Debit. and 8.)___________________9.)Credit

10.The transaction above is also called as__________________________

Answer Key for Self Check 1.3-3

JOB SHEET No. 1.3-1

Journal Entry, you should be able to

Supplies and Materials:

Steps and Procedure:

2. Apply the rule of debit and credit .

3. Supply an explanation of each

(i) Title of relevant accounts : 1.) and 2.)

(ii) Nature of account : 3.)_______and 4.)

(iii) Apply the rule : 5.)_________ Debit and 6.) Credit

(iv) Journal entry : 7.)_ Debit. and 8.)_________9.)Credit