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QORBAN Institute of
Technology Training
and Assessment
Center, Inc.
Training
BOOKKEEPING
for NC
 SECTOR :
HEALTH, SOCIAL AND OTHER
COMMUNITY DEVELOPMENT

COMPETENCY STANDARDS
 Basic Competencies 20 hours
 Common Competencies 24 hours
• Core Competencies 248 hours Training Duration
292 hours
The BOOKKEEPING NC III Qualification consists of
competencies that a person must achieve to enable
him/her to journalize transactions, post transactions,
prepare trial balance, prepare financial reports and
review internal control system.

A person who has achieved this Qualification

is competent to be
Bookkeeper
Accounting Clerk
 TRAINING STANDARDS
This set of standards provides Technical and Vocational
Education and Training (TVET) providers with information
and other important requirements to consider when
designing training programs for Bookkeeping NC III.
This includes information on curriculum design, training
delivery, trainee entry requirements, tools and equipment,
training facilities, and trainers qualification.
 TRAINEE ENTRY REQUIREMENTS

Trainees or students wishing to gain entry into these

qualifications should possess the following requirements:

 Must be able to communicate effectively both orally and in

written form
 Must be physically, emotionally, psychologically and mentally fit
 Must be able to perform basic mathematical computations
Course Description:
This course is designed to enhance the
knowledge, skills and attitude of Bookkeepers in
accordance with industry standards. It covers
the basic, common and core competencies on
journalizing transactions, posting transactions,
preparing trial balance, preparing financial
reports and reviewing internal control system.
 BASIC COMPETENCIES
Units of Competency
 Lead workplace communication
 Lead small team
 Develop and practice negotiation skills
 Solve problems related to work activities
 Use mathematical concepts and techniques
 Use relevant technologies
 COMMON COMPETENCIES
Units of Competency
 Apply quality standards
 Perform computer operations
 Maintain an effective relationship with clients and
customers
 Manage own performance
 CORE COMPETENCIES
Units of Competency
 Journalize transactions
 Post transactions
 Prepare trial balance
 Prepare financial reports
 Review internal control system
JOURNALIZE TRANSACTIONS
This unit covers the knowledge, skills, and attitudes in
logging/recording business transactions in an accounting journal.

1. Prepare chart of accounts

2. Analyze documents
3. Prepare journal entry

POST TRANSACTIONS
This unit covers the knowledge, skills, and attitudes in posting
transactions manually.
1. Prepare ledger
2. Transfer journal entries
3. Summarize ledger
PREPARE TRIAL BALANCE
This unit covers the knowledge, skills, and attitudes in listing accounts, transferring and summarizing
trial balances from a ledger.
1. List account titles
2. Transfer balances from the ledger
3. Summarize trial balance

PREPARE FINANCIAL REPORTS

This unit covers the knowledge, skills, and attitudes in preparing financial reports manually.

1. Prepare financial statements

2. Analyze financial statements

REVIEW INTERNAL CONTROL SYSTEM

This unit covers the knowledge, skills, and attitudes in reviewing and determining extent of compliance
with a firm’s internal control manual.
1. Check policy compliance
2. Prepare policy compliance report
 DEFINITION OF TERMS
Account is a formal record that represents, in words, money or other unit of
measurement, certain resources, claims to such resources, transactions or
other events that result in changes to those resources and claims

Accounting is the recording and reporting of financial transactions, including

the origination of the transaction, its recognition, processing, and
summarization in the FINANCIAL STATEMENTS

Accounting equation is assets equals liabilities plus equity. (A = L + E)

Accounting period/year is a period of 12 consecutive months chosen by an

entity as its ACCOUNTING period which may or may not be a calendar year.
Accounts Payable is the amount owed to a CREDITOR for delivered goods
or completed services

Accounts receivable are amounts collectible from its customers. It is the

claim against a DEBTOR for an uncollected amount, generally from a
completed transaction of sales or services rendered.

Adjusting journal entries are accounting entries to account for a periods

changes, omissions or other financial data required to be reported "in the
books"

Adjusted Trial Balance reflects totals after the adjusting entries are posted to
the general ledger.

Asset represents future benefit to the company with reliable measurement

Accounting Manual is a document prepared to provide bookkeepers with direction
and guidance in connection with those bookkeeping requirements of entities

Balance is the Sum of DEBIT entries minus the SUM of CREDIT entries in an
ACCOUNT. If positive, the difference is called a DEBIT BALANCE; if negative, a
CREDIT BALANCE

Balance Sheet reports the financial position at a point in time (end of the quarter or
year).

Bookkeeping is the recording of all financial transactions undertaken by a business

(or an individual). A bookkeeper (or book-keeper), sometimes called an accounting
clerk in the is a person who keeps the books of an organization. The organization
might be a business, a charity or even a local sports club

Business is the social science of managing people to organize and maintain collective
productivity toward accomplishing particular productive goals, which is usually to
generate profit
Capital is called equity.

Cash usually refers to money in the form of liquid currency, such as banknotes
or coins.

Cash Payments Journal is a book used to record all payments made in cash
such as for accounts payable, merchandise purchases, and operating
expenses; also termed cash disbursements journal

Cash Receipts Journals is a book used to record all collections made in

cash such as for accounts receivable , merchandise sold, and interest income.

Chart of Accounts is a systematic listing of all accounts used by an entity.

Closing entries are prepared after the financial statements have been
completed.
Corporation - is a form of doing business pursuant to a charter granted by
government.

Credit (CR) - means an entry to the right hand side of an account. Entry on
the right side of a DOUBLE-ENTRY BOOKKEEPING system that represents
the reduction of an ASSET or expense or the addition to a LIABILITY or
REVENUE. (See DEBIT.)

Debit (DR) - means an entry to the left hand side of an account. Entry on the
left side of a DOUBLE-ENTRY BOOKKEEPING system that represents the
addition of an ASSET or expense or the reduction to a LIABILITY or
REVENUE. (See CREDIT.)

Depreciation is the process of allocating the cost of property, plant and

equipment assets to the periods that will benefit from its use
Documents are bases of recording transactions in bookkeeping. This may
include but not limited to sales invoice and official receipts.

Drawing is when a business proprietor draws money for personal needs

Equity represents the residual claims of owners

Expenses represent the outflow of assets (or increases in liabilities) due to a

company’s operating activities.

Financial statements report the business activities during the year and the
financial condition at the end of the year. It is also the presentation of financial
data including BALANCE SHEETS, INCOME STATEMENTS and
STATEMENTS OF CASH FLOW, or any supporting statement that is intended
to communicate an entity's financial position at a point in time and its results of
operations for a period then ended.
Generally accepted accounting standards (GAAP) determine what to
record, when to record, and amount to record. It is also the rules, and
procedures necessary to define accepted accounting practice at a particular
time.

General Journal is the most basic of journals. It is a chronological list of

transactions.

General Ledger is the collection of all ASSET, LIABILITY, owners EQUITY,

REVENUE, and expense accounts. This is a book of accounts in which data
from transactions recorded in journals are posted and thereby classified and
summarized. Also called ledger.

Income is the inflow of REVENUE during a period of time. This also money
received by a person or organization because of effort (work), or from return
on investments.
Income Statement shows the components of net income in detail. It is the
summary of the effect of REVENUES and expenses over a period of time.

Income Taxes Payable is income taxes due including current portion of

deferred taxes.

Interest Income includes amounts from interest on all interest-bearing

deposits and accounts.

Internal Control is the process designed to provide reasonable assurance

regarding achievement of various management objectives such as the
reliability of financial reports.

Inventories are products on hand for sale to customers.

Journal is a book where all transactions are initially recorded.

Journal entry are the logging of business transactions and their monetary
value into the t-accounts of the accounting journal as either debits or
credits. A journal entry is usually backed up with a piece of paper; a receipt,
a bill, an invoice, or some other direct record of the transaction; making
them easy to record and to maintain traceability for each transaction.

Journalize transactions is the process of recording a business transaction

in a journal.

Ledger is a tool used for classifying and summarizing information about

increases, decreases, and balances of items in the chart of accounts.
Liability represents obligations, payables or debts owed. DEBTS or
obligations owed by one entity (DEBTOR) to another entity (CREDITOR)
payable in money, goods, or services

Loans Payable is the account title used to record amounts to be paid for
borrowed money. This is also called Notes Payable.

Notes Payable is the account title used to record amounts to be paid for
borrowed money and evidenced by a promissory note. This is also called
Loans Payable.

Official receipts is a document issued to acknowledge receipt of cash.

Partnership is a form of entity with two or more owners. Relationship

between two or more persons based on a written, oral, or implied
agreement whereby they agree to carry on a trade or business for profit
and share the resulting profits.
Philippine Financial Reporting Standards often known as PFRS are a set
of accounting standards. They are issued by the Financial Reporting
Standards Council. [FRSC].

Post Closing Trial Balance is balance sheet in trial balance form.

Preliminary Trial Balance is a listing of the accounts in the general ledger

and their balances as of a specified date. A trial balance is usually prepared at
the end of an accounting period and is used to see if additional adjustments
are required to any of the balances.

Posting is the process of transferring figures from the journal to the ledger
accounts
Property Plant and Equipment are assets used in the production of goods and
services

Purchase invoice is a bill from a vendor for specific materials or supplies

furnished or services rendered. It is called sales invoice from the point of view of
the seller.

Purchases Journal. This is a payable system involves a Purchases Journal -- in

which all incoming merchandise invoices are recorded.

Ratio Analysis is the comparison of actual or projected data for a particular

company to other data for that company or industry in order to analyze trends or
relationships

Receivables are amounts of money due from customers or other DEBTORS

Rent expense is the expenditure made to cover the rental for the premises.
Rent income is money received by a person or organization from rental of
premises and/or other assets.

Retained Earnings are profits of the business that have not been paid out
to the owners as of the balance sheet date.

Revenue represents the inflow of assets (or decrease in liabilities) due

operating activities. This may include sales of products, merchandise, and
services; and earnings from INTEREST, DIVIDEND, rents.

Routine journal entries Recurring financial activities reflected in the

accounting records in the normal course of business.

Salaries/wages expense is an account title used to record salaries,

wages, and benefits an employee receives from an employer.
Sales Journal This is a receivables system involves a Sales Journal -- in
which all invoices outgoing to customers are recorded.

Sales invoice is a document issued by a vendor for specific materials or

supplies furnished or services rendered. It is called purchase invoice from the
point of view of the seller.

Sole Proprietorship is a form of entity with one owner and the simplest
possible form of business.

Statement of Cash Flow reports sources and uses of cash. This is one of the
basic financial statements that are required as part of a complete set of
financial statements prepared in conformity with generally accepted accounting
principles. It categorizes net cash provided or used during a period as
operating, investing and financing activities, and reconciles beginning and
ending cash and cash equivalents
Statement of Changes in Equity explains the changes in contributed capital
and retained earnings during the period.

Subsidiary Ledger is a group of subsidiary accounts the sum of the balances of

which is equal to the balance of the related control account in the general ledger

Transactions and events are recorded as they occur, recorded even if cash is
not received or paid and affects the accounting equation.

Trial balance confirms that accounts are still in balance.

Utilities expense is an account title used to record amount incurred on heat,

light, water, and power.

Vouchers is a written record of expenditure, disbursement, or completed

transaction.

Worksheet is a document or schedule in which a bookkeeper uses to gather

information to substantiate an account balance.
 DIFFERENCE
BETWEEN
BOOKKEEPING AND
ACCOUNTING
 More often, bookkeeping and accounting are
mistaken as one and the same. We should clarify this
early on. In terms of scope, accounting is broader as
includes the bookkeeping function.

 Bookkeeping, on the other hand, is just confined

with the recording of monetary transactions,
which is one part of the accounting process.
 OBJECTIVES
OF
FINANCIAL STATEMENT
 The objective of Financial Statements is to provide information
about the financial position, financial performance, and cash
flows of a business that is useful to key personalities who are
making economic decisions.

 To meet this objective, financial statements provide information

about a business’ assets, liabilities, equity, income and expenses,
contributions by and contributions to owners in their capacity as
owners, and cash flows.
 4 COMMON TYPES OF SPECIAL
JOURNALS
 SALES JOURNAL – USED TO RECORD SALE OF
MERCHANDISE ON ACCOUNT

 PURCHASES JOURNAL – USED TO RECORD

PURCHASE MERCHANDISE ON
ACCOUNT
 CASH RECEIPTS JOURNAL – USED TO RECORD OF
RECEIPTS OF CASH FROM WHATEVER
SOURCE. (REF OR#)

 CASH DISBURSEMENTS JOURNAL – USED TO RECORD

PAYMENTS OF CASH FOR
WHATEVER SOURCE. (REF CV#)
 GENERAL JOURNAL – TRANSACTIONS WHICH

CANNOT BE RECORDED IN THE SPECIAL JOURNALS.

 BASIC ACCOUNTING EQUATION

ASSETS = LIABILITIES + OWNER’S EQUITY

(OR CAPITAL)
NORMAL DEBIT BALANCE NORMAL CREDIT BALANCE
o ASSETS o CONTRA-ASSETS
o CONTRA-LIABILITIES o LIABILITIES
o OWNER’S DRAWING o OWNER’S CAPITAL
o CONTRA-REVENUES o REVENUES
o COSTS AND EXPENSES o CONTRA-COST
Types of business according to activities:
1. Service business
2. Merchandising business
3. Manufacturing business
 3 types of business organizations:

• Service Business This type of business offers professional skills, advice and
consultations.
Examples: barber shops and beauty parlors, repair shops, banks, accounting and law firms

• Merchandising Business This type of business buys at wholesale and later sells the
products at retail. They make a profit by selling the merchandise or products at prices that
are higher than their purchase costs. This type of business is also known as "buy and sell".
Examples are: book stores, sari-sari stores, hardware stores

• Manufacturing Business This type of business buys raw materials and uses them in
making a new product, therefore combining raw materials, labor and expenses into a product
for sale later on.
Additional information:
There are businesses that may be classified under more than
one type of business. A bakery, for example, combines raw
materials in making loaves of bread (manufacturing), sells hot
pan de sal (merchandising), and caters customers’ orders in
small coffee table servings of ensaymada and hot coffee
(service).
 SERVICE BUSINESS MERCHANDISING BUSINESS

Revenues XX Net Sales XX

Less: Cost of goods sold XX
LESS: Operating Expenses XX Gross Profit XX
Less: Operating expenses XX
NET INCOME XX Net Income (Loss) XX
 2 types of inventory System (merchandising only)
 Periodic Invetory
 Perpetual Inventory

Periodic Inventory System

Perpetual Inventory System
Merchandise Inventory, beginning XX
Purchases are recorded in either
Add: Net cost of purchases XX
Cost of goods available for sale XX raw materials inventory
. or
Less: Merchandise Inventory, end XX merchandise inventory
Cost of good sold XX There are continual updates of
cost of goods sold
 Assets invested by the owner
January 8 – Valentin Day started a delivery service on January 8, 2018. The following
transactions occurred during the month of January. He invested PHP500,000 cash and
Cars amounting to PHP150,000
Journal Entry:
Cash
500,000
Property Plant and Equipment 150,000
Day, Capital
650,000
ASSETS To record= ValentinLIABILITIES
Day’s initial investments.
+
OWNER’S EQUITY
_______________________________________________________________
Cash 500,000.00
Day, Capital 650,000.00
Borrowings from the bank
January 10 – Valentin Day borrowed PHP200,000 cash from MBTC for the use in
his business.
Journal Entry:
Cash 200,000
Loans Payable 200,000
To record Valentin Day’s loan from MBTC.

ASSETS = LIABILITIES + OWNER’S

EQUITY
_________________________________________________________________
Cash 700,000.00 Loans Payable 200,000 Day, Capital 650,000
Cars 150,000.00
Asset purchased for cash
January 20 – Bought tables and chairs from Heart Company and paid P30,000.00 cash.
Journal Entry:
Furniture 30,000
Cash 30,000
To record tables and chairs bought from Heart Company.

ASSETS = LIABILITIES + OWNER’S EQUITY

______________________________________________________________
Cash 670,000 Loans Payable 200,000 Day, Capital 650,000
Cars 150,000
Furniture 30,000
 Received cash for revenue earned
January 21 – A customer hired the services of Day. Cash of PHP15,000 was received from the
customers.

Journal Entry:
Cash 15,000
Service Revenue 15,000
To record service revenue.

ASSETS = LIABILITIES + OWNER’S

EQUITY
_________________________________________________________________
Cash 15,000
Service Revenue 15,000
Paid cash for expenses incurred
January 22 – Cash was paid for the following : gas and oil, PHP500 and car repairs,
PHP1000.

Journal Entry:
Gas and Oil 500
Repairs Expense 1,000
Cash
1,500
To record expenses incurred.
ASSETS = LIABILITIES + OWNER’S
EQUITY
___________________________________________________________________
Cash ( 1,500 ) Gas
and Oil ( 500 )
 CASH
Jan-08 500,000.00 Jan-20 30,000.00
Jan-10 200,000.00 Jan-22 1,500.00
Jan-21 15,000.00

715,000.00 31,500.00
683,500.00
 CASH Account No. _____________
Date Explanation Ref Debit Credit Balance
Jan-08 Initial investment 500,000.00 500,000.00
Jan-10 Loans 200,000.00 700,000.00
Jan-20 Purchase tables and chairs 30,000.00 670,000.00
Jan-21 Service Revenue 15,000.00 685,000.00
Jan-22 Gas and Oil 1,500.00 683,500.00
 CASH Account No. _____________
Date Explanation Ref Debit Credit Balance
Jan-08 Initial investment 500,000.00 500,000.00
Jan-10 Loans 200,000.00 700,000.00
Jan-20 Purchase tables and chairs 30,000.00 670,000.00
Jan-21 Service Revenue 15,000.00 685,000.00
Jan-22 Gas and Oil 1,500.00 683,500.00

715,000.00 31,500.00
683,500.00
 Valentin Day Services
Trial Balance
For the month of January 31,

Debit Credit
Cash 683,500.00
Furniture 30,000.00
Property Plant and Equipment 150,000.00
Loans Payable 200,000.00
Day, Capital 650,000.00
Service Revenue 15,000.00
Gas and Oil 500.00
Repairs Expense 1,000.00
865,000.00 865,000.00
-
 Valentin Day Services
Income Statement
For the month of January 31

Revenue
Service Revenue 15,000.00

Less: Operating Expenses 1,500.00

Gas and Oil 500.00
Repairs Expense 1,000.00

Net Income/Revenue 13,500.00

 Valentin Day Services
Balance Sheet
For the month of January 31
ASSETS
CURRENT ASSETS
Cash 683,500.00
Furniture 30,000.00
Total Current Asset 713,500.00

NON-CURRENT ASSETS
Property Plant and Equipment 150,000.00

TOTAL ASSETS 863,500.00

LIABILITIES AND OWNER'S EQUITY

LIABILITIES
Loans Payable 200,000.00

OWNER'S EQUITY
DAY, Capital 650,000.00
Income 13,500.00
663,500.00

TOTAL LIABILITIES AND OWNER'S EQUIITY 863,500.00

 GSW Company
Statements of Cash Flows
For the month of January 31

Cash Flow from operating activties

Cash infl ow
From customers xx
Dividends fon stock investments xx
Interest Income xx xx

Cash outflow
Operating expenses xx
Taxes and licenses xx
Interest on bank loan paid xx xx
Net Cash fl ow from operating activities xx

Cash Flow from investing activties

Cash infl ow
Proceeds from sale of equipment xx xx
Cash outflow
Purchase of furniture xx xx
Net Cash fl ow from investing activities xx

Cash Flow from financing activties

Cash infl ow
Proceeds from bank loan xx
Additional Investment xx xx
Cash outflow
Principal of Bank Loan xx xx
Net Cash fl ow from investing activities xx
Net Increase/decrease of cash xx
Add: Cash Balance, beginning xx
Cash Balance, End xx
For each transaction, tell whether the assets, liabilities and equity will increase (I),
decrease (D) or is not affected (NE).

A L E
1. The owner invest personal cash in the business ___ ___
___
2. The owner withdraws business asset for personal use ___ ___
___
3. The company purchase land on account
___ ___ ___
4. The company repays the supplier
___ ___ ___
5. The owner contributes her personal truck to the business ___ ___
 A L E
1. The owner invest personal cash in the business _I__ _NE_
__I__

2. The owner withdraws business asset for personal use _D_ __NE_ __D_
3. The company purchase land on account _I__
___I__ _NE_
4. The company repays the supplier
D__ __D____NE_
5. The owner contributes her personal truck to the business __I__ __NE_ __I__