OST

Fundamentals of
SENIOR
Accountancy, Business HIGH
and Management 1 (FABM 1) SCHOOL

Self-Learning

Preparing of Post Closing Trial Module

18
Balance and Reversing Entries
666
Quarter 4
Fundamentals of Accountancy, Business and Management 1
Quarter 4 – Self-Learning Module 18: Preparing of Post-Closing Trial Balance and
Reversing Entries
First Edition, 2020

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 Fundamentals of
SENIOR
Accountancy, Business HIGH
and Management 1 SCHOOL

(FABM 1)

Self-Learning
Preparing of Post Closing Trial Module

Balance and Reversing Entries 18

12
Quarter 4
Introductory Message
For the facilitator:

Welcome to the Senior High School – Fundamentals of Accountancy,

Business, and Management 1 Quarter 4 Self Learning Module on Preparing of Post-
Closing Trial Balance!

This Self-Learning Module was collaboratively designed, developed, and

reviewed by educators from the Schools Division Office of Pasig City headed by its
Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A.
Agustin, in partnership with the City Government of Pasig through its mayor,
Honorable Victor Ma. Regis N. Sotto. The writers utilized the standards set by the K
to 12 Curriculum using the Most Essential Learning Competencies (MELC) in
developing this instructional resource.

This learning material hopes to engage the learners in guided and independent
learning activities at their own pace and time. Further, this also aims to help learners
acquire the needed 21st-century skills especially the 5 Cs, namely: Communication,
Collaboration, Creativity, Critical Thinking, and Character while taking into
consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the
body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them to
manage their learning. Moreover, you are expected to encourage and assist the
learners as they do the tasks included in the module.
For the learner:

Welcome to Fundamentals of Accountancy, Business and Management 1

Quarter 2 Self Learning Module on Preparing of Post-Closing Trial Balance!

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning material while being an active
learner.

This module has the following parts and corresponding icons:

Expectations - This points to the set of knowledge and skills

that you will learn after completing the module.

Pretest - This measures your prior knowledge about the lesson

at hand.

Recap - This part of the module provides a review of concepts

and skills that you already know about a previous lesson.

Lesson - This section discusses the topic in the module.

Activities - This is a set of activities that you need to perform.

Wrap-Up - This section summarizes the concepts and

application of the lesson.

Valuing - This part integrates a desirable moral value in the

lesson.

Posttest - This measures how much you have learned from the
entire module.
 EXPECTATIONS

After going through this module, you are expected to:

1. define post-closing trial balance;

2. enumerate the accounts that are in the post-closing trial balance;
3. prepare a post-closing trial balance; and
4. understand and appreciate the usefulness of post-closing trial balance.

PRETEST

Directions: Write the correct letter of your answer in the space provided.

_____1. The purpose of the post-closing trial balance is to

A. Aid the journalizing and posting of the closing entries.
B. Ensure that the ledger is in balance for completion of the worksheet.
C. Ensure that the ledger is in balance for the start of the next period.
D. Provide the account balances for the preparation of the balance sheet.

_____2. Post-closing trial balance differ is for the adjusted trial balance in that it does
not
A. Include balance sheet accounts.
B. Include income statement accounts
C. Take into account adjusting entries
D. Take into account closing entries

_____3. The following adjusting entries are reversed except?

A. Accrued expenses
B. Accrued income
C. Deferred revenue under revenue method
D. Prepaid expense under asset method

For numbers 4-5 Write true if the statement is correct. If it is false write the correct
word or phrases to make the statement correct.
_____ 4. After the post-closing trial balance, reversing entry is prepared to simplify
the first entry relating to that same item in the next accounting period.
_____ 5. Nominal accounts are accounts that are reflected in the post-closing trial
balance.
 RECAP
Directions: Fill in the blanks.
1. ____________________ are entries prepared at the end of the accounting
period to bring the balances of the temporary or nominal accounts to zero. A
clearing account called 2._________________ is used. The revenue account
such as Rent Income which has a normal credit balance should be closed on
the 3.____________ side and 4.__________________ to the Income Summary
Account. The 5.___________________account which normally is a debit balance
is credited to close and debited to the capital account to bring a reduction.

LESSON

After the adjusting and closing entries have been prepared for the ledger, we
are now ready to prepare a post-closing trial balance. Since all nominal accounts are
zero out or became zero balances, only balance sheet accounts will remain at the end
of the accounting period. As we have discussed in our previous modules, the post-
closing trial balance will only consist of real or permanent accounts.
CAGAYAN VALLEY MERCHANDISING
Post-Closing Trial Balance
December 31, 2019

Debit Credit
Cash 39,000
Accounts Receivable 56,250
Allowance for Doubtful Accounts 5,625
Merchandise Inventory 98,000
Prepaid Insurance 2,150
Store Supplies 650
Office Supplies' 375
Store Equipment 66,000
Accumulated Depreciation-Store Equipment 23,900
Office Equipment 25,000
Accumulated Depreciation-Office Equipment 10,500
Accounts Payable 33,350
Salaries Payable 2,500
Unearned Rent 10,200
Notes Payable (due 2022 52,500
Vico Rizal, Capital 148,850
Total 287,425 287,425
Figure 18.1 Notice that only real accounts are visible in this post-closing trial balance.
 CAGAYAN VALLEY MERCHANDISING
Heading Post-Closing Trial Balance
December 31, 2019

Debit Credit
Cash 39,000
Accounts Receivable 56,250
Allowance for Doubtful Accounts 5,625
Merchandise Inventory 98,000
Prepaid Insurance 2,150
Assets
Store Supplies 650
Office Supplies' 375
Store Equipment 66,000
Accumulated Depreciation-Store Equipment 23,900
Office Equipment 25,000
Accumulated Depreciation-Office Equipment 10,500
Accounts Payable 33,350
Salaries Payable 2,500
Liabilities Unearned Rent 10,200
Notes Payable (due 2022 52,500
Capital End Vico Rizal, Capital 148,850
Total 287,425 287,425

Only real accounts or balance sheet accounts are here in this trial
balance. These account balances will be the beginning balances for the next
accounting period.

REVERSING ENTRIES

Some adjusting entries related to the previous period are reversed at the
beginning of the new accounting period. These entries called, reversing entries, are
the exact opposite of the adjusting entries made in the previous period. Although
optional, many accountants prefer to make reversing entries because they help
simplify the recording of regular transactions in the next accounting period and also
help to bring back the accounts to their normal status.

Not all adjusting entries are reversed. Only the following entries are reversed
as that service business:

1. Adjustment for accrued expenses;

2. Adjustment for accrued income;
3. Adjustment for the prepaid expense (expense method); and
4. Adjustment for deferred revenue (revenue expense)
 The reversing entries for the Cagayan Valley Merchandising are as follows:
GENERAL JOURNAL Page __
Post
Date Description Debit Credit
Ref.
2020 Reversing Entries
Jan. 1 Salaries Payable 202 2,500
Salaries Salaries Expense 601 1,925
Offices Salaries Expense 610 575
To reverse the Dec.31
adjusting entry for the accrued
salaries.

ACTIVITIES

Activity 1
Preparing of Reversing entries based on the adjustments made in the activity in module
15 (Laura Taylor)
LAURA TAYLOR WHOLESALE DISTRIBUTORS
Worksheet
December 31, 2020
Trial Adjusted Income Balance
Balance Adjustments Trial Balance Statement Sheet
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash ₱ 25,400 ₱ 25,400 ₱ 25,400
Accounts Receivable 37,600 37,600 37,600
Inventory 90,000 (3b) 88,900 (3a) 90,000 88,900 88,900
Land 92,000 92,000 92,000
Buildings 197,000 197,000 197,000
Accumulated Depreciatioon- Buildings ₱ 54,000 (1a) 10,000 ₱ 64,000 ₱ 64,000
Equipment 83,500 83,500 83,500
Accumulated Depreciation- Equipment 42,400 (1b) 9,000 51,400 51,400
Accounts Payable 39,000 39,000 39,000
Notes Payable 50,000 50,000 50,000
L. Taylor, Capital 267,800 267,800 267,800
L. Taylor, Drawings 10,000 10,000 10,000
Sales 904,100 904,100 904,100
Sales Discounts 6,100 6,100 6,100
Cost of Sales 709,900 709,900 709,900
Salaries Expense 69,800 69,800 69,800
Utilities Expense 19,400 19,400 19,400
Repair Expense 5,900 5,900 5,900
Petrol Expense 7,200 7,200 7,200
Insurance Expense 3,500 3,500 3,500

Depreciation Expense- Buildings (1a) 10,000 10,000 10,000

Depreciation Expense- Equipment (1b) 9,000 9,000 9,000
Interest Expense (2) 5,000 5,000 5,000
Interest Payable (2) 5,000 5,000 5,000
Income Summary (3a) 90,000 (3b) 88,900 1,100 1,100
202,900 202,900 1,381,300 1,381,300 846,900 904,100 534,400 477,200
NET INCOME 57,200 57,200
- 904,100 904,100 534,400 534,400
Activity 2
Prepare the post-closing trial balance of Laura Taylor Wholesale Distributors
LAURA TAYLOR WHOLESALE DISTRIBUTORS
Worksheet
December 31, 2020
Trial Adjusted Income Balance
Balance Adjustments Trial Balance Statement Sheet
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash ₱ 25,400 ₱ 25,400 ₱ 25,400
Accounts Receivable 37,600 37,600 37,600
Inventory 90,000 (3b) 88,900 (3a) 90,000 88,900 88,900
Land 92,000 92,000 92,000
Buildings 197,000 197,000 197,000
Accumulated Depreciatioon- Buildings ₱ 54,000 (1a) 10,000 ₱ 64,000 ₱ 64,000
Equipment 83,500 83,500 83,500
Accumulated Depreciation- Equipment 42,400 (1b) 9,000 51,400 51,400
Accounts Payable 39,000 39,000 39,000
Notes Payable 50,000 50,000 50,000
L. Taylor, Capital 267,800 267,800 267,800
L. Taylor, Drawings 10,000 10,000 10,000
Sales 904,100 904,100 904,100
Sales Discounts 6,100 6,100 6,100
Cost of Sales 709,900 709,900 709,900
Salaries Expense 69,800 69,800 69,800
Utilities Expense 19,400 19,400 19,400
Repair Expense 5,900 5,900 5,900
Petrol Expense 7,200 7,200 7,200
Insurance Expense 3,500 3,500 3,500

Depreciation Expense- Buildings (1a) 10,000 10,000 10,000

Depreciation Expense- Equipment (1b) 9,000 9,000 9,000
Interest Expense (2) 5,000 5,000 5,000
Interest Payable (2) 5,000 5,000 5,000
Income Summary (3a) 90,000 (3b) 88,900 1,100 1,100
202,900 202,900 1,381,300 1,381,300 846,900 904,100 534,400 477,200
NET INCOME 57,200 57,200
- 904,100 904,100 534,400 534,400
 WRAP-UP
To summarize what you have learned from the lesson, answer the following
questions:

1. define post-closing trial balance;

2. what are the accounts found in the post-closing trial balance; and
3. how do we reverse entries?

VALUING
➢ What are your main takeaways from today’s lesson?
➢ Reflect on the significance of preparing the post-closing trial balance
and reversing entries?

POSTTEST

Directions: Identify each item below. Write your answer before the item number.
_____1. The entry to close the withdrawal account is
A. Debit Income Summary and credit Owner’s Withdrawal
B. Debit Owner’s Capital and credit Owner’s Withdrawal
C. Debit Owner’s Withdrawal and credit Income Summary
D. Debit Owner’s Withdrawal and credit Owner’s Capital
_____ 2. The purpose of the closing entries is to
A. Bring the temporary accounts to zero
B. Bring the permanent accounts to zero
C. Update the temporary accounts
D. Update the permanent accounts
_____ 3. A clearing account used only at the end of the accounting period to
summarize revenues and expenses for the period
A. Asset Summary
B. Capital Summary
C. Expense summary
D. Income summary

For numbers 4-5 Write TRUE if the statement is correct. If it false write the correct
word or phrase to make the statement true.
_____4. All adjusting entries made are reversed.
_____ 5. Adjusting entries for prepaid expensed recorded under the asset method is
reversed.
 KEY TO CORRECTION

REAL ACCOUNTS 5.
TRUE 4. FALSE 5.
C 3. 5. Drawing FALSE 4.
A 2. 4. Credited D 3.
C 1. 3. Debit A 2.
2. Income Summary B 1.
PRETEST: 1. Closing entries POSTTEST
RECAP:

References

Ballada, W. 2017. Fundamentals of Accountancy, Business, and Management 1.

VDomDane Publishers.

Banggawan, RB. Asuncion, DJ. 2017. Fundamentals of Accountancy, Business, and

Management 1. Real Excellence Publishing.

Ferrer, RC. Millan, CV. 2017. Fundamentals of Accountancy, Business, and

Management 1. Bandolin Enterprise. San Juan, DA. 2018. Fundamentals
of Accounting. Elmoer Publishing

Rabo, JS. Tugas,FC.Salendrez, HE. 2016. Fundamentals of Accountancy, Business,

and Management 1. Vibal Group Inc.

Manuel, Zenaida Vera-Cruz 18th Edition Accounting Process_Basic Concepts and

Procedures

Epstein, Lita, MBA Bookkeeping Workbook for Dummies. Wiley Publishing, Inc.

Hernane, Milagros B.,et.al 2014. Principles of Accounting. Allen Adrian Books Inc.

Valencia, Edwin G. 4th Edition. Basic Accounting (Concepts, Principles, Procedures and
Applications) . Valencia Educational Supply