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FABM1 Module 11 Hand Outs 073819

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Brianna Victoria O. Calayco
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16 views9 pages

FABM1 Module 11 Hand Outs 073819

Uploaded by

Brianna Victoria O. Calayco
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND

MANAGEMENT 1
Module 11 Chart of Accounts
(Source DepEd Self Learning Module)

After going through this module, you are expected to:


1. discuss the importance of chart of accounts in recording
business transactions;
2. identify and classify sub-accounts from the chart of
accounts; and
3. prepare chart of accounts for a service business .
Activity A
Directions: Write TRUE if the statement is correct, and
FALSE if otherwise.
1. A chart of accounts is a list of all the accounts used by the
organization for financial reporting.
2. Assets, liabilities, income, and expenses are the only
standard categories in the chart of accounts.
3. Expenses include cost of goods sold and intangible items
like trademarks and software.
4. Liability accounts include wages payable and sales tax
payable.
5. It is easier to locate specific amounts through chart of
accounts.
Lesson
In recording business transactions, business entities develop
chart of accounts. A chart of accounts is a list of all the accounts
used by the business with corresponding account codes that the
business will use in recording and posting in the books of accounts
and in reporting in the financial statements. In order to have
uniformity, using chart of accounts will ensure that the same
account title and account codes are used for the same
transactions. It is necessary to standardized account titles so that
there is consistency in recording of specific transactions and
reporting in the same financial statements. There are many
internal and external users of the financial statements, therefore
the account titles shown exactly in the chart of accounts must be
used for uniformity in understanding and interpretation. Account
codes are assigned based on the accounting elements. Small
businesses usually have 3-digit account codes and large
businesses have 4-digit codes.
T-Account, Footing and Balancing
An accounting device that helps facilitate in transaction
analyses is called a Taccount. It is in the form of big letter T.
A T-account has three parts: the account title or account
name, the debit side on the left side and the credit side on
the right side. Every account title has a T-account. It is
easier to do cross referencing when a date is placed on the
left side of each posted amount. After all the transactions
are posted on the T-account, the amount of each side is
totalled. This process is called footing. A T-account can have
two footings. There is no need to compute for the footing if
the T-account has only one amount posted. Getting the
difference between the debit footing and the credit footing
is called balancing. The balance of an account is computed
by deducting the smaller footing from the larger footing and
the resulting balance is placed on the side with the larger
footing.
Activity B
Directions: Identify and write your answer before each item
number.
________1. It refers to the increased side of the account.
________2. It refers to the list of account titles with
corresponding account codes.
________3. It refers to the process of computing the total
of each side of a T-account.
________4. It refers to the process of getting the balance
between the debit footing and the credit footing.
________5. It refers to an accounting device that facilitates
transaction analysis.
Activity C
T-Account
Directions: Determine the T-account balance for cash from
the transactions below.
March 1 Invested Php800, 000 as initial capital for RBD
Services.
March 3 Purchased computers worth Php100, 000 on
account and payable within 60 days.
March 5 Purchased office supplies worth Php20, 000 on
cash.
March 9 Paid Php40, 000 to reduce RBD’s obligation last
March 3.
March 13 Earned Php70, 000 for services rendered. The
client is allowed to pay within 30 days.
March 18 Paid Php25, 000 for employees’ salaries.
March 23 Received Php30, 000 from March 13 transaction.
March 27 Received Php210, 000 for services rendered to a
client.
March 30 Issued check worth Php35, 000 for March utilities.
March 31 Paid office rent worth Php45,000 for f March.
March 31 Withdrawals of Php150,000 to settle an
immediate obligation.

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