2 ndGrading

st
1 Semester
REVIEW
 What is a journal?
Why is it called the
“book of original entry?”
N
What is a general ledger? O
Why is it called the H
“book of final entry?” S
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 JOURNAL
- is a chronological record (day-by-day) of
business transactions.
N
- It is called the book of original entry O
because it is the accounting record in H
which financial transactions are first S
recorded.
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 LEDGER
- refers to the accounting book in which the accounts
and their related amounts as recorded in the journal
are posted to periodically.
N
- “book of final entry” because all the balances in the
ledger are used in the preparation of financial O
statements. H
- referred to as the T-Account because the basic form
of a ledger is like the letter “T”.
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
Many businesses maintain several types of
journals. The simplest type of journal is called the

The General Journal

general journal.

and
The process of recording a transaction is called
N
journalizing the transactions.
O
This type Special
of journal is Journal
unique among journals
H
because it may be used to record any type of
business transactions. S
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
Recording all transactions in the general
journal is not cost effective and time
consuming. To speed up and simplify the
recording process, most businesses make use
N
of special journals.
O
Each special journal is designed to record a
H
particular type of transaction efficiently and
quickly.
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 Examples of special N
journals and their use O
H
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
a.Cash Receipts Journal
– is used to record all cash that had
been received.
N
b. Cash Disbursements Journal
O
– is used to record all transactions
involving cash payments. H
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 Sales Journal (Sales on Account Journal)
c.

– is used to record all sales on credit on

account)
N
d. Purchase Journal (Purchase on Account Journal) O
– is used to record all purchases of H
inventory n credit (or on account) S
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 NORMAL BALANCE OF ACCOUNTS N
O
H
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 CASH
MERCHANDISE INVENTORY
UNEARNED REVENUE
RENT EXPENSE
N
PURCHASE RETURNS AND ALLOWANCES
SALES O
OWNER’S, CAPITAL H
COST OF GOODS SOLD S
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 ACCRUED INCOME
FREIGHT IN
SALARIES EXPENSE
OWNER’S DRAWING N
PURCHASE DISCOUNT O
NOTES PAYABLE H
INTEREST EXPENSE S
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 Practice Set No. 1 N
O
H
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
(Dayana Merchandising) Dayana Company had
the following transactions during December,
2018:
a.On Dec. 5, sold merchandise on credit for
Php5,000, terms 3/10, n/30. The items N
sold had a cost of Php3,500. O
H
b.Purchased merchandise for cash, Php720,
on Dec. 13. S
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
c. On Dec. 17, purchased merchandise on
credit for Php2,600, terms 1/20, n/30.

d. Issued a credit memorandum for Php300 N

to a customer who returned O
merchandise purchased last Dec. 5. The
H
returned items had a cost of Php210.
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
i. On Dec. 24, sold merchandise on credit for
Php7,000, terms 2/10, n/30. The items had a cost
of Php4,900.
j. On Dec. 31, received payment for merchandise
sold on December 24.

Required: Prepare the general journal entries to record these

transactions using a perpetual inventory system. (Record all
purchases initially at the gross invoice amount.)
ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)
 -end- N
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ACCOUNTANCY, BUSINESS AND MANAGEMENT (ABM)