Fundamentals of Accountancy, Business and Management 1
Fundamentals of Accountancy, Business and Management 1
Fundamentals of Accountancy, Business and Management 1
Fundamentals of Accountancy,
Business and Management 1
Module 6
i
ABM • Fundamentals of Accountancy, Business and Management I
Module 6
First Edition, 2021
Copyright © 2021
La Union Schools Division
Region I
All rights reserved. No part of this module may be reproduced in any form
without written permission from the copyright owners.
Management Team:
After reading these learning materials, the learner must analyze common
business transactions applying the rules of debit and credit and its significance to
ensure a balanced accounting equation in a business's life.
Subtasks
1. Discuss the concept of a double-entry bookkeeping system
2. Analyze the rules of debit and credit in business transactions
3. Apply the rules of debit and credit in solving business transactions
Jumpstart
Pretest Activity:
Directions: From the keywords inside the main boxes, recall some basic business
transactions or personal experiences that best describe them. Put your answers
inside the connecting boxes. Use a separate sheet. (20 points)
DEBIT
(value received)
CREDIT
(value given out)
Situation: Supposed your parents or guardians give you P150 as your allowance for
the day and had the following transactions:
Allowance: P150
3. From each of the transactions you had for the day, what did you exchange
with to get it?
4. Do you think you get the value of each transaction every time there are
exchanges of values? Support your answer.
Exchange of values
This part summarizes the rules of debit and credit in the accounting equation.
2. Ben bought some supplies that he will use to answer all the activities in the
modules while studying at home that cost him P300 for July 2020. July 31,
2020 School Supplies P300
Cash P300
:. To record the expenses paid by Ben.
3. Maria paid his miscellaneous for the School Year 2020 – 2021, amounting to
P560 on August 31, 2020.
August 30, 2020 Miscellaneous P560
Cash P560
:. To record the payment of miscellaneous (tuition fees).
Applying the Rules of Debit and Credit in Business Transactions
A financial report is usually prepared and submitted to help management in
decision-making in a typical business setting. It is a prerequisite to analyze first the
business transactions and then apply the rules of debit and credit entries. In the
succeeding modules, the structures and significance of the different financial reports
will discuss.
Let us carefully examine how debit and credit rules shall apply in a service
type of business.
Given Case: Based on the Balance Sheet (BS) date as of November 2020 of Growee,
it appeared the following financial information:
P925,000.00 P925,000.00
Applying the rules of debit and credit entries for the foregoing transactions of
Growee for December 2020, the General Journal (GL) has the following account titles
with their corresponding balances.
2020
8 Cash 8,000.00
Cash 8,000.00
Cash 20,000.00
20 Cash 7,500.00
25 Cash 5,000.00
Cash 750.00
Cash 19,000.00
Cash 5,000.00
To record owner's cash withdrawals.
P 88,250.00 P 88,250.00
*Omitted Posting Reference (PR)
Let us summarize the effects of debit and credit entries based on the foregoing
transactions in the accounting equation of Growee for December 2020.
Explore
Activity:
Directions: Interview one (1) Sari-sari store owner (attach a photo) in your barangay
and indicate all the possible transactions which involve value receives (debt) and
value is given out (credit). Use a separate sheet and present your outputs following
the format below. (10 points)
1. 6.
2. 7.
3. 8.
4. 9.
5. 10.
Insert photo
Deepen
Carbs Computer and Cellphone Shop was opened by Carbs on November 01,
2020, with a cash investment of P200,000.00 and furniture worth P5,000.00.
Additional transactions for the month following;
November 2020
3 Signed Contract of Lease and deposited P15,000.00.
4 Paid for the construction of display counters, P25,000.00.
5 Bought repair supplies for cash, P7,500.00.
6 Bought and paid for furniture and fixture, P45,000.00.
8 Bought repair equipment worth P15,000.00 from XYO Co. for use in the store.
Paid 50% with the balance to be paid within 30 days.
9 Collected P1,500.00 for cellphone repair services.
10 Billed Madison Corp. P3,500.00 for computer repair services rendered.
13 Paid for salaries of clerks, P5,000.00.
14 Summary of cash received P4,000.00 and a promissory note for
P2,000.00 for computer repair services.
15 Signed a contract with Telecom System for the repair work to be done on their
computers, P15,000.00.
16 Paid for telephone, light and water, P3,800.00.
17 Collected P1,500.00 from Madison.
18 Sent a bill to Telecom System for repair work done.
22 Total Cellphone repair work collected in cash, P8,500.00.
25 Repair supplies used amounted to P2,200.00.
29 Payments for; Salaries, P5,000.00; Rent, P5,000.00.
30 Carbs made a personal cash payment of P2,500.00 to XYO Co.
Carbs used the following account titles: Cash; Accounts Receivable; Notes
Receivable; Repair Supplies; Office Furniture; Repair Equipment; Deposit for Rent;
Accounts Payable; Carbs, Capital; Carbs, Personal; Repair Fees Revenue; Repairs
and Maintenance; Repair Supplies Used; Rent Expense; Salaries Expense; and
Utilities Expense.
Ballada, Win Lu (2010). Basic Accounting Made Easy. 15 th Edition. ISBN: 978-971-944938-6. Chapters
1-15 DomDane Publishers and Made Easy Books. Sampaloc, Manila
Martin, Narciso Jr., A. and Nieva, Jimena Veronica T. (2019). Fundamentals of Accountancy,
Business and Management I. Specialized Subject. Department of Education ROI. La Union Schools
Division Office. Don Eulogio de Guzman Memorial National High School. Senior High School
Department. Accountancy, Business and Management Strand. Document Seq No 001. s, November
2019. Pp 1-68.
Website
https://phlconnect.ched.gov.ph/search/category/businessrelated
Key Answer