MODULE -1

What Do You Already Know?

Preliminary Discussion. Let us determine how much you already know about Fundamentals of
Accounting by taking this short quiz. 10pts
 Explain briefly the subject of accounting. What are its purposes?

The purposes of accounting is to manage computation and to prevent missed calculations. It is

necessary to know this kind of subject cause it will help you when it comes to financial.

 Explain the three-step process of accounting.

The three steps process of accounting, first the Collection Stage of Accounting where you will
collect the data because the ultimate goal of accounting process is to prepare financial reports
that show the financial status of a business. To get to that result, data regarding sales,
purchases and other financial transactions during the accounting period have to be collect.
Second the process stage of accounting the stage when the things are recorded in the accounting
system. Third reporting stage of accounting It is during this stage that the financial reports a
business uses the most – the income statement, balance sheet and statement of Owner's Equity
are completed.

How Much Have You Learned?

I need the topic because I read and understand every topic that have in the module whenever
there is difficulties I try to search it to know what is it. And sometimes my sister will help me to
understanding it in a easy way which is gave me more ideas and thoughts for me to learn it.

How Do You Apply What You Have Learned?

I can apply what I learned in anykind of situation that related to it. Especially when it comes to work
it increase my skills and give me a positive feedback there is possibilities that I got a job.
How Well Did You Perform?

Self-Assessment:

How well did you comprehend the topic?

NO YES

1. Do you now know the roles of a management (/ ) ()

Accountant?

2. Can you now understand the meaning of (/ ) ()

Financial accounting?

3. Do you now know the difference of financial ( /) ()

And management accounting?

 MODULE -2
What Do You Already Know?
Preliminary Discussion. Let us determine how much you already know about Fundamentals of
Accounting by taking this short quiz. 10pts

 Discuss the accrual basis of accounting. What are its basic features?

Accrual basis accounting recognize and reports economic activities in the period the
economic. Activity takes place, regardless of when the cash is received or paid.It is the
expenses that have been included or which you have not yet received a list from a supplier.
And the revenue accruals if it goods or services that they had delivered for which not have
been billed the customer that's the accrual accounting work
 How can be accrual basis of accounting help external and internal users?

Internal define the owner, manager, and employees while the external it is the back and
investors, consumers, creditors, government, public and etc. Using the accrual basis of
accounting means the income statement when they are earned. The accrual form will provide
a better picture of your company's financial results, that allows your internal and external
stakeholders to better scan operations, that make more informed decisions, and grow the
business.
How Much Have You Learned?
Below are accounting concepts and principles. Match each case or transaction to the
correct accounting concept and principle. Write your answers on the space provided before the
number.

Accrual Accounting Accounting Entity Assumption

Time Period Assumption Matching Principle
Use of Judgment and Estimates

Time Period Assumption 1. Joe, a business owner, incurs expenses for the repair of his house.
This expense should not be reflected in the financial statements of his business. It should be
considered as a personal expense.

Matching Principle 2. Joey, a car salesman, rendered service for a car company in December.
Joey was able to sell five cars in December. However, he was paid by the company in January of
the next year. Joey’s salary will be recorded as an expense of the car company in December.

Accounting Entity Assumption 3. A company prepares financial reports every year for the
benefit of its stockholders.

Accrual Accounting 4. A company records warranty expense even though it is not entirely sure
when warranties will be performed.

Use of Judgment and Estimates 5. Credit sales are recorded by a company as revenues even
though no cash is received.
How Do You Apply What You Have Learned?

DIRECTIONS: STRICTLY NO ERASURES. ENCIRCLE the letter of your choice that best answers the
following questions.

1. Which of the following is NOT a step in accounting process?

a. Identification
b. Communication
c. Verification
d. Recording

2. Which of the following is NOT a relevant economic event?

a. An agent who attended to the concern of a complaining customer
b. Patricia, manager of company X, who sold an abandoned building of her company
c. Company Y which borrowed P5M from a bank due to tight financial conditions
d. Company Z which paid its employees their salaries for the month of January

3. Who is the person responsible for the process of identifying, recording, and communicating
economic events of an organization?
a. Manager
b. Accountant
c. Bookkeeper
d. Treasurer

4. Which of the following can be considered as internal user?

a. Board of Directors
b. Creditors
c. Investors
d. Customers

5. Management reports helps management in their decision making. All of the following are
decisions made by management that use information from the management reports. EXCEPT
a. When to accept the investment of an interested investor
b. To produce a part of the product internally or to purchase from outside supplier
c. Which segment of the company should be prioritized
d. To accept a special order from a customer

6. Which of the following is the definiton of Partnership?

a. A contract whereby one person contributes for money, property or industry to a
common fund with the intention of dividing the profits among the other person.
b. The binding of two or more persons to a common property.
c. Composed of five persons and above who contribute for money, property to a common
fund
d. A contract whereby two or more persons bind themeselves together to contribute for
money, property or industry to a common fund, with the intention of dividing the profits
among themselves.
7. What is most likely to happen when companies are experiencing financial difficulties?
a. Employees are motivated to work to achieve the company’s goals
b. Creditors will be more willing to lend the company to help overcome its financial
difficulties
c. Researchers will lose interest in the company since they mostly study companies that
are successful
d. Investors will postpone or cancel their investments.

8. Which of the following does not fall under the category of a customer?
a. Alelie, a client of SGV Auditing firm
b. Mark, a regular purchaser of deodorant in Aling Nena’s Sari-Sari Store
c. Ivan, an individual collecting annual payments from company X
d. Britney, a loyal gamer in Net X Computer Shop

9. The definition of Government Accounting came from which section?

a. 109 of Presidential Decree 1446
b. 109 of Presidential Decree of 1445
c. 110 of Presidential Decree of 1445
d. 110 of Presidential Decree of 1446

10. Among the following statement which one is true?

Statement I – General purpose financial statements are prepared to accommodate the
information needs of persons who have no capability to acquire
information directly from the company
Statement II – Primary users of general purpose financial statements includes investors,
creditors, and top management
a. Both statements are true
b. Only statement I is true
c. Only statement II is true
d. Both statements are false
How Well Did You Perform?
Self-Assessment:
How well did you comprehend the topic?
YES NO

1. Do you now know the use of estimates in the (/ ) ()

accounting process?
2. Can you now understand the meaning of (/ ) ()
Prudence?
4. Do you now know the principles of accounting? (/ ) ()
 MODULE -3
How Much Have You Learned?
Multiple Choice
Read and analyse each item. Circle the letter of the best answer.

1. In which of the following cases can the accounting equation be rewritten?

a. Assets + Liabilities = Equity
b. Assets – Liabilities = Equity
c. Equity – Assets = Liabilities
d. Equity + Assets = Liabilities

2. When an entity performs services for cash, how will the accounting equation be affected?
a. Increased equity and increased assets
b. Increased equity and decreased assets
c. Increased assets and decreased liabilities
d. Increased liabilities and increased equity

3. When an entity buys goods through credit, how will the accounting equation be affected?
a. Increased equity and decreased assets
b. Increased liabilities and decreased assets
c. Increased assets and increased liabilities
d. Increased liabilities and increase equity

4. When an entity buys an equipment for cash, how will the accounting equation be
affected?
a. Increased equity and increased assets
b. Increased equity and decreased assets
c. Increased assets and decreased liabilities
d. Increased liabilities and increased equity

5. The following transactions would change the accounting equation EXCEPT one. Which
is the exception?
a. Purchase of land on credit
b. Investment of additional capital
c. Sale of goods of cash
d. Deposit of cash in bank
How Do You Apply What You Have Learned?

Listed below are ten business transactions for Puring Company during its first month
of operations:
How Do You Apply What You Have Learned?

Listed below are ten business transactions for Puring Company during its first month of
operations:

a. Owner invested cash in the business amounting to P300 000

b. Purchased equipment for cash amounting to P50 000
c. Purchased inventories through credit amounting to P35 000
d. Purchased furniture amounting to P30 000. Made partial payment with cash (P10 000)
and incurred an accounts payable for the balance (P20 000)
e. Paid cash to the local government for business permit (P9 000)
f. Made sales of P17 000 – P12 000 cash sales, P5 000 credit sales.
g. The cost of the sales made in (f) amounted to P8 500
h. Paid the accounts payable in (d)
i. Collected 2 500 out of the P5 000 credit sales in (f)
j. Paid employee P12 000

Indicate the effects of the given transactions on each of the financial statement
elements in the table shown below. The answer for transaction (a) is given as an example.

Assets = Liabilities + Equity Revenues

Expenses

a. P300 000 P300 000

b._______ _______ _______ _______ _______
c._______ _______ _______ _______ _______
d._______ _______ _______ _______ _______
e._______ _______ _______ _______
_______
f. _______ _______ _______ _______
_______
g._______ _______ _______ _______
_______
h._______ _______ _______ _______ _______
i._______ _______ _______ _______ _______
 j._______ _______ _______ _______ _______

How Well Did You Perform?

Self-Assessment:

How well did you comprehend the topic?

YES NO

1. Do you now know the Accounting Equation? () (/ )

2. Can you now identify the assets, liabilities () ( /)

and equity?

3. Do you now know the elements of Assets? () (/ )

 MODULE IV

What Do You Already Know?

Preliminary Discussion. Let us determine how much you already know about Organization and
Management by taking this short quiz. 10pts

 What is asset?
Asset is a resources and things of value owned by your company it can be like cash,prepaid
expenses, investments, short and long term loans, inventory, etc.

 What are current and non-current liabilities?

Current liabilities it is a financial obligation that company needs to pay within a year of
incurring it. Current Liabilities it's obligation of a company amounts to owed to lenders and
suppliers. And it often have the word payable on account title.

ACTIVITY

Directions: classify each of the following either asset (A), liability (L), equity (E), revenue (R),
or expense (Ex). Write your answer on the space provided before the number.

L 1. Accounts Payable
A 2. Accounts Receivable

E 3. Additional Paid-in Capital

A 4. Cash

E 5. Common Stock

Ex 6. Cost of Goods Sold

A 7. Furniture

A 8. Inventories
 L 9. Notes Payable

R 10. Sales

Instructions: For each of the statements, indicate whether it is an Assets, Liabilities or Owner’s
Equity that will increase, decrease or will not change at all (no effect). For increase, write (+),
decrease write (-) and Not change or no effect write (NC). Number 1 was given as an example
for you.

Particulars ABM Corporation

Assets Liabilities Owner’s

Equity

1. The owner invested cash to start a business + NC +

2. Bought supplies by paying cash + NC -

3. The owner made an additional investment in the - NC -

business.

4. Purchased inventory on credit + + NC

5. Paid cash to the local government - NC -

6. Collected cash for services rendered to clients + NC +

7. Paid monthly utilities - NC -

8. The owner took cash from the business for personal - NC -

use

9. Acquired furniture on account + + NC

10. Received payments for the goods sold + NC +

 MODULE V

What Do You Already Know?

Preliminary Discussion. Let us determine how much you already know about Organization and
Management by taking this short quiz. 10pts

 Explain briefly your understanding about Merchandising Business.

For my own understanding merchandising business is selling good products, the examples of it is
retail clothing, grocery stores and bookstores. Merchandise business good product that they are
ready to sale and then sell them to a customers.

 Explain your understanding about Inventory.

Inventory also know as stock It is where you will list down how many item or products your
company have .

ACTIVITY
Answer the following problem.

1. Nesfruta Enterprises had the following transactions for the year ended 2019. On Dec. 31,
2019, who owns the inventory under each of the following transactions?

 Purchased P20 000 worth of goods from Czarina Company. These were shipped Dec. 30,
2019. Receiving report of the said goods is dated Jan. 5, 2020. Terms of sale FOB
Destination
 Answer: _____________________

 Purchased goods amounting P50 000 on Dec. 29, 2019 from Jadiens Shop. Goods were
received one day after. Terms of sale FOB shipping Point.
Answer: _____________________

2. Scenario: Ellen operates a small retail store in Pangasinan. If she purchases snacks and
delicacies from her supplier today, these purchased goods take an average of 3 days
before being sold. Cash is received immediately upon the sale of the snacks. Determine
Ellen’s operating cycle.

Operating Cycle = Days of Inventory + Days of Receivable = 3 days

Suppose that Ellen allows her buyers to pay within 2 days from the date of sale. How
will this change the operating cycle?

Operating Cycle = Days of Inventory + Days of Receivable = 3 + 2 = 5 days

Determine the operating Cycle of Ellen’s Company:
Average age of inventory = 10 days
Average payment period = 15 days
Average age of receivables = 20 days

Answer:

QUIZ

DIRECTIONS: Journalize the following events for Lumberjacks using perpetual and periodic inventory
systems.

 Purchased inventory from Battle Rope Systems. Merchandise costs P45 000 on which
cash has been paid immediately
 Paid P5 000 for the delivery fee of the purchased merchandise
 Returned P10 000 worth of defective merchandise upon careful inspection of the goods.
 Cash is received amounting to the cost goods returned.
 Sale on account has been made to Clean and Press Corporation. Goods sold are worth
P25 000. Selling price is 50% above cost.
 Cash collections regarding the sale to Clean and Press Corporation amounted to P35 000.
 The remaining balance of the receivable from Clean and Press Corporation is determined
to be uncollectible. The company decided to write off the balance at year-end.
 MODULE VI
What Do You Already Know?
Preliminary Discussion. Let us determine how much you already know about Organization and
Management by taking this short quiz. 10pts

 What is a general journal?

General journal for me you will list down the important or all of the transactions and
accounts.refers to a book of original entries it must in order according to the date
events. time occur

 Explain your understanding about book of accounts.

Book of accounts by it name or called.For me I can say it is a book where you record
all the financial transactions of the business.you can input all your financial
transaction through computer using Microsoft excel. And we are living in high
technology were you can easily input anything to your laptop, cellphone etc.
QUIZ
Review Questions.
Answer the following questions and write your answers on the box provided below.

1. What is a journal? When does a company record a transaction in the journal?

2. What
QUIZ

Problem Solving.
In January 2016, DJJ Strongco started his business of selling siopaos known for its
bigger-than-normal-size called Loisiopao. During its first month, he journalized these
transactions in the company’s general journal.
Using your knowledge of the general journal and general ledger, post the foregoing
transactions in the general ledger and determine the balances of the following at the end of the
first month:
J1
General Journal

Date Account Titles and Explanation Ref Debit Credit

2016 Cash 101 250 000

January DJJ, Capital 301 250 000
1
Owner’s Investment of cash in the business

1 Inventory 121 130 000

Accounts Payable 201 130 000
Purchase of siopao from supplier on account

2 Cash 101 5 000

Sales 400 5 000
Sale of siopao to customer through cash

Cost of Goods Sold 500 25 000

Inventory 121 25 000
Sale of siopao to customer

3 Accounts Receivable 111 30 000

Sales 400 30 000
Sale of siopao to customer on account

Cost of Goods Sold 500 15 000

 Inventory 121 15 000
Sale of siopao to customer

10 Cash 101 10 000

Accounts Receivable 111 10 000
Collection of customer’s accounts receivable

12 Accounts Payable 201 45 000

Cash 101 45 000
Payment of accounts payable to supplier

15 Rent Expense 505 15 000

Cash 101 15 000
Payment of rent expense for a month

18 Cash 101 35 00
Accounts Receivable 121 35 000
Sales 500 70 000
Sales of siopao to customer on account with
50% down payment

Cost of Goods Sold

505 35 000
Inventory
101 35 000
Sale of siopao to customer

20 Inventory 121 35 500

Accounts Payable 201 5 500
Cash 101 30 000
Purchase of siopaos, partly cash, partly on
account

31 Cash 101 15 000

DJJ, Capital 301 15 000
Owner’s investment of additional cash
  Cash
 Accounts Receivable
 Inventory
 Accounts Payable
 DJJ, Capital
 Sales
 Cost of Goods Sold
 Rent Expense

(2) NO. 101

(1) CASH

(3)Date (4)Explanation (5)Ref (6)Debit (7)Credit (8) Balance

2015

No. 111
ACCOUNTS RECEIVABLE

(3)Date (4)Explanation (5)Ref (6)Debit (7)Credit (8) Balance

2015
 No. 121
INVENTORY

(3)Date (4)Explanation (5)Ref (6)Debit (7)Credit (8) Balance

2015

No. 201
ACCOUNTS PAYABLE

(3)Date (4)Explanation (5)Ref (6)Debit (7)Credit (8) Balance

2015

No. 301
DJJ, CAPITAL

(3)Date (4)Explanation (5)Ref (6)Debit (7)Credit (8) Balance

2015
 No. 400
SALES

(3)Date (4)Explanation (5)Ref (6)Debit (7)Credit (8) Balance

2015

No. 500
COST OF GOODS SOLD

(3)Date (4)Explanation (5)Ref (6)Debit (7)Credit (8) Balance

2015

No. 505
RENT EXPENSE

(3)Date (4)Explanation (5)Ref (6)Debit (7)Credit (8) Balance

2015