JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL

FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 1
 Introduction

This is an introductory course in accounting, business, and management data analysis that will develop
students’ appreciation of accounting as a language of business and an understanding of basic accounting concepts and
principles that will help them analyze business transactions.

This will highlight key concepts and identify the essential questions, show the big picture, connect and/or
review prerequisite knowledge, clearly communicate learning competencies and objectives and motivate through
applications and connections to real-life.

Welcome! You are now part of the class taking up Fundamentals of Accountancy, Business and Management
(ABM) 1. Since accounting is the “language of business”, every individual who aspires to be a businessman, accountant,
or manager, must understand these basic concepts including the different forms and type of businesses.

The primary concern of this module is to be able to teach Fundamentals of ABM1 effectively using
developmentally appropriate classroom practices. This module will help you understand and interpret certain issues
affecting business transactions. It covers important topics and activities that will enhance your analytical thinking skills.

This module presents a systematic program of study intended for Senior High School (SHS) students of
Fundamentals of ABM1 in the K to 12 program. It maintains a consistent link between theory and practice by providing
learning activities to illustrate and test theoretical ideas. As you go through the different lessons, you will be able to
analyze the different business transactions, users of financial information, branches of accounting, types of major
accounts, etc.

At the end of this subject, you are expected to:

1. Discuss the nature, function, and history of accounting.

2. Discuss the external and internal users of financial information.
3. Discuss the accounting concepts and principles and the accounting equation.
4. Understand the five major accounts and two major types of books of accounts.
5. Discuss the nature of business transactions, types of source or business documents, and the rules of debits and
credits.
6. Discuss the accounting cycle of a service and merchandising business.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 2
 Table of Contents

Introduction

Table of Contents

Post-Test (Module 4)

Module 5: The Two Major Types of Books of Accounts

Introduction ……………………………………………………………………………………………..……………….1

Description of Module …………………………………………………………………………….…….……………1

Objectives …………………………………………………………………………………………..……………………..2

General Instructions ………………………………………………………………………………………………….2

Pre-Test ………………………………………………………………………………………………………………………………..3

Activity 1.1 ……………………………………………………………………………………………………………………………4

Discussion

The Journal ………………………………………………………………..……………………………………………..5

General Journal……………………………...……..…………………………………………………………….……..5-7

Special Journal……………….………………..………………………………………………………………….……..8-10

General Ledger……………………………………………..…..……………………………………………….…..…..11

Subsidiary Ledger ……………………………………………..…………………………………….………….……..12

Self-Check 1.1 ……………………………………..……..…………………………………………………………………………13

Self-Check 1.2 ……………………………………..……..…………………………………………………………………………14

Activity 1.2 …………………………………………………………….……………………………………………………………..15

Points to Remember …………………………………………………………………………………..………………………..16

References …………………………………………………………………………………………………………………………...16

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 3
 Post-Test (Module 4)

Directions: Read and analyze each question about the types of major accounts. Choose the letter of the correct answer.
Write your answers on a one-fourth sheet of paper.

1. What account title refers to the long-term debts secured by a collateral?

A. Mortgage Payable C. Notes Payable
B. Loans Payable D. Accounts Payable
2. What account title refers to the expenses paid by the business in advance?
A. Prepaid Expenses C. Accrued Expenses
B. Unearned Income D. Accrued Income
3. A medium of exchange that a bank will accept at face value. This statement is referring to what account title?
A. Cash C. Supplies
B. Accounts Receivable D. Prepaid Expenses
4. The claims against debtors or customers arising from services rendered on account and sale of merchandise
on account denotes what account title?
A. Accounts Receivable C. Supplies
B. Accounts Payable D. Prepaid Expenses
5. The words, names, symbols, or other devices used in trade to indicate the source of a product and to
distinguish it from the products of others. This statement is referring to what account title?
A. Trademark C. Intangibles
B. Patent D. Copyright
6. What account title refers to the amounts due to creditors for assets acquired on account?
A. Accounts Receivable C. Notes Receivable
B. Accounts Payable D. Notes Payable
7. What is the general term primarily used for digitally stored data such as computer programs and other kinds
of information read and written by computers?
A. Hardware C. Documents
B. Software D. Internal storage
8. The amounts due to creditors evidenced by written promise to pay is refers to what account title?
A. Accounts Receivable C. Notes Receivable
B. Accounts Payable D. Notes Payable
9. What account title refers to supplies being used by the business.
A. Inventories C. Prepaid Expenses
B. Supplies Expense D. Supplies
10. What is the exclusive right or protection granted to an author for literary, musical or artistic work?
A. Trademark C. Intangibles
B. Patent D. Copyright

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 4
 Module 5
THE TWO MAJOR TYPES OF BOOKS OF ACCOUNTS

Introduction

Accounting helps you track who owes you what, what you owe to who, manage payroll records, track loan and
interest repayments, attract potential investors, maintain a budget, and perhaps most importantly, sets you up with the
financial data you need when it comes time to file and pay your company's taxes. You need good records to monitor the
progress of your business. Records can show whether your business is improving, which items are selling, or what
changes you need to make. Good records can increase the likelihood of business success.

Description of Module

Lesson 5 deals with the differentiation of a journal from a ledger and identification of the types of journals and
ledger.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 1
 Objectives

At the end of this module, you are expected to:

1. Identify the uses of the two books of accounts (journal and ledger) to record business transactions.
2. Explain the use of general and special journals to record business transactions.
3. Discuss the use of general and subsidiary ledgers to record business transactions.

General Instructions

At the start of the module, you are to take the pre-test to see how much background information and knowledge
you have about the topics to be discussed.

This module is self-instructional. You can read, analyze concepts and ideas presented, and reflect on them. The
Activities and Self-Check will help you assess how you progress as you go through the module.

Your answers to the Self-Check and Activities will be evaluated by your teacher. These will be part of your
formative evaluation.

The post test will be given in a separate booklet upon completion of this module. It will serve as the summative
evaluation of your performance.

Work on this module independently. Your teacher will not be around to supervise you as you go through each
lesson. It is expected that you will make the most of it.

This module shall be passed on ______________________.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 2
 Pre-Test

Directions: Read and analyze each question about the books of accounts. Choose the letter of the correct answer. Write
your answers on a one-fourth sheet of paper.
1. Cyrel sends back 100 of faulty goods to Patrick. In which book of prime entry would Patrick record this
transaction?
A. General Journal C. Sales Journal
B. Purchase Return Journal D. Sales Return Journal
2. A bookkeeper discovers that an amount to a supplier has been wrongly entered in another supplier’s account.
Which book of original entry will the bookkeeper use when correcting this error?
A. Cash Book C. Sales day book
B. Purchase day book D. General Journal
3. Which of the following books are books of prime entry?
A. Sales day book and trial balance
B. Petty cash book and accounts receivable ledger
C. Cash book and assets register
D. Petty cash book and journal
4. In what book transactions are initially recorded?
A. Book of prime C. Journal
B. Book of original entry D. All of the choices
5. In what type of journal corrected balance of prepaid insurance at the end of the month should be recorded?
A. Cash Payments Journal C. Purchases Journal
B. Cash Receipts Journal D. General Journal
6. What type of book is a bill payable book?
A. Journal C. Ledger
B. Principal book D. Memorandum book
7. What account title should be debited when a customer returns goods?
A. Return inward account C. Goods account
B. Return outward D. Accounts Receivable
8. What is the alternative name for a sales journal?
A. Sales day book C. Sales ledger
B. Sales invoice D. Daily sales
9. Which of the following is not a book of prime or original entry?
A. Debtor’s account C. Purchase daybook
B. Sales daybook D. Cashbook
10. What are the two books of account?
A. Journal and ledger C. Trial balance and ledger
B. Journal and trial balance D. None of the choices

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 3
 Activity 1.1

“Accounting is the process of IDENTIFYING, RECORDING, and COMMUNICATING

economic events of an organization to interested users.” (Weygandt et.al.)

From the definition above, answer the following questions:

1. Where do we record the transactions that we have identified?

2. What are the tools that we use to document these transactions?
3. How important are these records in accounting?

Write your answers on a one whole sheet of paper. Write three sentences only per number.
15pts

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 4
 Discussion

THE JOURNAL

Companies initially record transactions and events in

chronological order (the order in which they occur). Thus, the journal is
referred to as the book of original entry. For each transaction the journal
shows the debit and credit effects on specific accounts.

There are two types of journals, the general journal and the special journal.

General Journal
The general journal is the most basic journal. Typically, a general journal has spaces for dates, account titles
and explanations, references, and two amount columns.

The journal makes several significant contributions to the recording process:

 It discloses in one place the complete effects of a transaction.

 It provides a chronological record of transactions.
 It helps to prevent or locate errors because the debit and credit amounts for each entry can be easily
compared.

Shown below is an example of a general journal:

General Journal
Date Account Title and Explanation Ref Debit Credit

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 5
 Journalizing Process

Entering transaction data in the journal is known as journalizing. Companies make separate journal entries
for each transaction. A complete entry consists of:

 The date of the transaction which is entered in the Date column.

 The debit account title (that is, the account to be debited) which is entered first at the extreme left margin
of the column headed “Account Titles and Explanation,” and the amount of the debit is recorded in the Debit
column.
 The credit account title (that is, the account to be credited) which is indented and entered on the next line
in the column headed “Account Titles and Explanation,” and the amount of the credit is recorded in the
Credit column.
 A brief explanation of the transaction which appears on the line below the credit account title. A space is
left between journal entries. The blank space separates individual journal entries and makes the entire
journal easier to read.
 The column titled Ref. (which stands for Reference) which is left blank when the journal entry is made. This
column is used later when the journal entries are transferred to the ledger accounts.

To illustrate the recording of transactions in the general journal, let us use the following transactions as an
example:

 September 1, 2020 Mr. Ben Mabait invested PHP500,000 in a restaurant business by opening an account
with SuperBank.
 September 5, 2020 purchased kitchen appliances for his business amounting to PHP100,000 by issuing a
check.
 September 6, 2020 started his operations and made sales for that day amounting to PHP20,000.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 6
We will now record the above transactions in the general journal.

General Journal
Date Account Title and Explanation Ref Debit Credit
09/1/20 Cash 500000
B. Mabait, Capital 500000

To record the initial investment of Mr. Ben Mabait

09/5/20 Kitchen Appliances 100000

Cash 100000

To record the acquisition of kitchen appliances by

issuing a check.

09/6/20 Cash 20000

Sales 20000

To record sales for the day.

Some entries involve only two accounts, one debit and one credit. An entry like these is considered a simple
entry. Some transactions, however, require more than two accounts in journalizing. An entry that requires three or
more accounts is a compound entry. All of the transactions in the above examples are simple entries. An example of a
compound entry is the following:

 On September 7, 2020, Mr. Mabait purchased a motorcycle costing PHP80,000. He pays PHP30,000 cash
and agrees to pay the remaining PHP50,000 on account (to be paid later).

The compound entry is as follows:

General Journal
Date Account Title and Explanation Ref Debit Credit
09/7/20 Transportation Equipment 80000
Cash 30000
Accounts Payable 50000

To record purchase of motorcycle by paying cash and

the balance on account

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 7
 Special Journal
Some businesses encounter voluminous quantities of similar and recurring transactions which may create
congestion if these transactions are recorded repeatedly in a single day or a month in the general journal. Take the case
of our example above, if Mr. Mabait will record the sales per day using the Official Receipt or Cash Sales Invoice issued,
it would be unnecessary and impractical to credit “sales” account repeatedly. In order to facilitate efficient and practical
recording of similar and recurring transactions, a special journal is used.

The following are the commonly used special journals:

 Cash Receipts Journal – used to record all cash that has been received
 Cash Disbursements Journal – used to record all transactions involving cash payments
 Sales Journal (Sales on Account Journal) – used to record all sales on credit (on account)
 Purchase Journal (Purchase on Account Journal) – used to record all purchases of inventory on credit (or on
account)

Cash Receipts Journal is used to record transaction involving receipt or collection of cash. The following
illustrate the format of a cash receipts journal:

Cash Receipts Journal

Debit Credit Credit Credit
DATE DESCRIPTION REF Cash Sales Accounts Sundry
(PARTICULARS) Receivable

 The date of the transaction is entered in the date column.

 A brief explanation of the transaction is entered in the description column.
 The column titled Ref. (which stands for Reference) which is left blank when the journal entry is made. This column
is used later when the journal entries are transferred to the ledger accounts.
 The Debit Cash column represents the amount of cash received for a particular transaction.
 Major categories of receipts, such as cash sales and collection of accounts receivable are provided with separate
columns. These transactions are frequent and repetitive items, therefore a separate column is provided.
 The column sundry is used for various miscellaneous and less regular items, such as capital investment, receipt of
loan proceeds, among others.

The source document for this journal is the Official Receipts or Cash Receipts issued by the business.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 8
 The cash disbursements journal is the opposite of the cash receipts journal. It is the journal where all cash
payments are recorded. An example of a cash disbursement journal is shown below:

Cash Disbursements Journal

Check Credit Debit Debit Debit Credit
DATE DESCRIPTION REF or Cash Accounts Salaries Supplies Sundry
(PARTICULARS) Voucher Payable
Number

 The date of the transaction is entered in the date column.

 A brief explanation of the transaction is entered in the description column.
 The column titled Ref. (which stands for Reference) which is left blank when the journal entry is made. This
column is used later when the journal entries are transferred to the ledger accounts.
 The Check or Voucher number represents the identifying number of the check issued for the related cash
payment. Most of the time, a check or cash voucher accompanies the disbursement. The voucher number may
be used as the alternative for this column.
 The Debit Cash column represents the amount of cash received for a particular transaction.
 Major categories of receipts, such cash sales and collection of accounts receivable are provided with separate
columns. These transactions are frequent and repetitive items, therefore a separate column is provided.
 The column sundry is used for various miscellaneous and less regular items, such as capital investment, receipt
of loan proceeds, among others.

The source documents used to update this journal are the check voucher or cash voucher, cash receipts or official receipts
from suppliers or vendors.

The Sales Journal or Sales on Account Journal is used in recording several sales transactions on account.
The source document for this journal is the charge invoice or sales invoice (for credit transactions) to various customers
or clients. An example of a sales journal is shown below:

Sales Journal
Change Debit Credit
DATE DESCRIPTION (CUSTOMER NAME) REF Invoice or Accounts Sales
Sales Invoice Receivable
No.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 9
  The date of the transaction is entered in the date column.
 A brief explanation of the transaction is entered in the description column or the name of the customer.
 The column titled Ref. (which stands for Reference) which is left blank when the journal entry is made. This
column is used later when the journal entries are transferred to the ledger accounts.
 The Charge Invoice Number or Sales Invoice Number represents the identifying number of the source
document issued to the customer when the sale was made.
 The Debit Accounts Receivable column represents the amount of the sale transactions indicated in the charge
invoice.
 The Credit Sales column represents the amount of the sale transactions indicated in the charge invoice.

The source document for this journal is the Charge Invoice issued by the business.

The Purchase journal or the Purchases on Account Journal is used to record recurring transactions of
purchases on account. The source documents for purchase journal are the invoices from the supplier of the company.
An example of a Purchase Journal is shown below:

Purchase Journal
Charge Invoice Debit Credit
DATE DESCRIPTION (SUPPLIER’S NAME) REF or Sales Invoice Purchases Accounts
No. (from Payable
supplier)

 The date of the transaction is entered in the date column.

 A brief explanation of the transaction is entered in the description column or the name of the supplier.
 The column titled Ref. (which stands for Reference) which is left blank when the journal entry is made. This
column is used later when the journal entries are transferred to the ledger accounts.
 The Charge Invoice Number or Sales Invoice Number represents the identifying number of the source
document issued by the supplier when the items, goods or merchandise were delivered to the company when
the purchase was made.
 The Debit Purchases column represents the amount of the goods purchases as indicated in the charge invoice
from the supplier
 The Credit Accounts Payable column represents the amount of the goods or items purchased on credit from the
supplier. The amount is indicated in the charge invoice issued by the supplier.

The source document for this journal is the charge invoice from the supplier or vendor.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 10
 GENERAL LEDGER

The ledger refers to the accounting book in which the accounts and their related amounts as recorded in the
journal are posted periodically.

The ledger is also called the ‘book of final entry’ because all the balances in the ledger are used in the
preparation of financial statements. This is also referred to as the T-Account because the basic form of a ledger is like
the letter ‘T’.

There are two kinds of ledgers, namely; the general ledger and the subsidiary ledgers.

General Ledger
The general ledger (commonly referred by accounting professionals as GL) is a grouping of all accounts used
in the preparation of financial statements. The GL is a controlling account because it summarizes all the activities that
have taken place as recorded in its subsidiary ledger.

The format of a general ledger is shown below:

General Ledger
Account: Cash Account No.: 1000
Date Item Ref Debit Credit Balance

 The account portion refers to the account title for example: cash, accounts receivable.
 The account number is an assigned number for each account title to facilitate ease in recording and cross-
referencing.
 The Date column identifies when the transaction happened.
 The item represents the source journal and the nature of the transactions.
 The Reference identifies the page number of the general our special journal from which the information was
taken.
 The Debit and Credit columns are used in recording the amount of transactions from the general journal or
special journal.
 The Balance Column represents the running balance of the Account after considering the debit and credit
amounts. If the running balance amount is positive, the account has a debit balance whereas if it has a negative
running balance, the accounts has a credit balance.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 11
 Subsidiary Ledger
A subsidiary ledger is a group of like accounts that contains the independent data of a specific general ledger.
A subsidiary ledger is created or maintained if individualized data is needed for a specific general ledger account. An
example of a subsidiary ledger is the individual record of various payables to suppliers. The total amount of these
subsidiary ledgers should equal the balance in the Accounts Payable general ledger.

An example of a subsidiary ledgers is shown below:

Accounts Payable
Subsidiary Ledger
Vendor/Supplier: Joy Food Corporation Vendor No.: 201
Address: Jose St, Sampaloc, Manila
Date Item Ref Debit Credit Balance

 The upper portion indicates the name and address of the vendor or supplier.
 The vendor number is an assigned number for each vendor as reference in keeping the records of a supplier.
 The Date column identifies when the transaction happened.
 The description column describes the nature of transaction.
 The Reference identifies the page number of the general our special journal from which the information was
taken.
 The Debit and Credit columns reflect the various effects of every transaction to the record of the supplier or
vendor.
 The Balance column provides the running balance of every supplier.

Take note that the total running balance for all subsidiary ledgers should equal the Accounts payable general ledger

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 12
 Self-Check 1.1

Test I. Directions: On a one-half lengthwise, identify what special journal is applicable for the
following transactions:

1. Collected PHP10,000 from a customer in payment of his account.

2. Bought 100 pieces of mugs to be sold in the store amounting to PHP1,500 on account.
3. Sold five pieces of mugs to X, PHP320 cash.
4. Sold two pieces of mugs to Y, PHP112 cash
5. Purchased office supplies for cash, PHP500.
6. Paid PHP20,000 monthly rental.
7. Paid salary of staff, PHP15,000.
8. Sold 100 pieces of mugs to Unicup, Inc., PHP5,600 on account.
9. Sold 500 pieces of mugs to Bugsmore Corp. for PHP15,300 payable one month after
delivery.
10. Purchase on account 1,000 pieces of mugs for PHP12,400
11. Purchased store supplies worth PHP7,500 on account.
12. Paid PHP3,800 for miscellaneous.
13. Collected PHP5,000 from a credit customer.
14. Paid advertisement, PHP1,200.
15. Acquired 1,500 pieces of mugs for PHP15,000 cash.
16. Paid PHP2,000 for electricity and water bills.

Test II. Directions: Identify the appropriate special journal to be used for every source document
listed below:

17. Official Receipt issued by the company

18. Charge Invoice issued by the company
19. Charge Invoice from a supplier
20. Official receipt from a supplier as proof of payment of account

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 13
 Self-Check 1.2

Directions: Read and comprehend each statement. Write “AGREE” if the underlined word/s is /are
correct and “DISAGREE” if not. Write your answers on a one-fourth sheet of paper.

1. The general journal is called the book of original entry.

2. The subsidiary ledger is called the book of final entry.

3. Special journals are designed to facilitate the process of journalizing and posting
transactions.

4. A special journal is created or maintained if individualized data is needed for a specific

general ledger account.

5. The ledger refers to the accounting book in which the accounts and their related amounts
as recorded in the journal are posted periodically.

6. A general ledger contains the details supporting the balance in the subsidiary ledger
account.

7. A subsidiary ledger is maintained for all receivables from customers; the sum of balances
per customer should equal the balance of Accounts Receivable Account in the general
ledger account.

8. A special ledger contains a summary at the account level of every transaction that a
business has engaged in.

9. Accounting transactions are first recorded in the general journal and in order of their
occurrence.

10. The special ledger records all the transactions whereas the general ledger the effect of
these journal entries to every account title.

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 14
 Activity 1.2

Directions: On a one whole sheet of paper, explain the use of general journals and general ledgers to record
business transactions. 50pts

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 15
 Activity 1.2
Points to Remember

 Journal is a subsidiary book of account. It is the storehouse for recording transactions.

Transactions are recorded in the journal in chronological order of dates just after their
occurrences. Transactions are recorded in a journal without considering their nature of
classification. In journal explanation of entries of the transaction are shown. The format of the
journal contains five columns.

 Ledger is the permanent and final book of accounts. It is termed as the means of classified
transactions. Transactions are posted in the ledger in classified form from the journal.
Transactions are recorded in the ledger in the classified form under respective heads of
accounts. In ledger explanations of entries of transactions are not needed. Generally, the ledger
account of the ‘T’ form contains eight columns – four in left and four in the right. But in
statement format of ledger account contains six columns.

References

Anastacio, Ma. Flordeliza. Fundamentals of Financial Management (with Industry Based Perspective).( Manila: Rex Book
Store, 2011).

Gilbertson, Claudia. Fundamentals of Accounting. 8th ed. (Australia: Cengage Learning, 2010).

Padillo, Nicanor, Jr. Financial Statements Preparation, Analysis and Interpretation. (Manila: GIC Enterprises, 2011).

Pefianco, Erlinda C. The Accounting Process: Principles and Problems. (Makati: Goodwill Trading, 1996).

Young, Felina C. Principles of Marketing. (Manila: Rex Book Store, 2008).

Prepared by: Checked by:

MARY CECILLE S. QUIATCHON MARILOU C. MENDOZA, LPT

Subject Teacher SHS Module Coordinator

AIMIE O. ALCANTARA, LPT

SHS Head Teacher

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 16
Recommending Approval: Approved by:

NERISSA S. DELOS REYES, MAEd, SMRIEdr DR. RAMON E. WOO, JR., CPA, DFRIEdr
VP/ Basic Education Principal Dean of Studies

Noted by:

DR. ROSALINA S. ANDAYA, Ed. R., DFRIEdr

President

JOHN PAUL COLLEGE CORP.

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL
FUNDAMENTALS OF ACCOUNTANCY,
FUNDAMENTALS BUSINESS
OF ACCOUNTANCY, AND
BUSINESS MANAGEMENT
AND 1 1
MANAGEMENT 17