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Fundamental of Actg

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5 views35 pages

Fundamental of Actg

Uploaded by

Nova Babaylo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Fundament

als of
Accounting
Chart of
Accounts
• It is a list of account titles
used by the business.
• It serves as a guide for the
bookkeeper.
• It is divided into sections and
each title has a iven code
number
Current Asset:
•are short-term assets. They are
assets that companies expect to
convert to cash or spend in a year
or less.

ASSETS
Non-Current
Asset:
•are long-term investments that
companies can use for a year or
more. Companies cannot easily
convert these assets into cash;
Current Asset:
•Cash on Hand
•Cash in Bank
•Notes Receivable

ASSETS •Interest Receivable


•Accounts Receivable
•Allowance for Bad Debts
•Merchandise Inventory
•Interest Receivable
Non-Current
Asset:
•Supplies Unused – supplies on hand, Office
Supplies, Store Supplies and Factory Supplies
•Prepaid Insurance
•Furniture and Fixture

ASSETS
•Accumulated Depreciation- Furniture and Fixture
•Equipment
•Land
•Building
•Accumulated Depreciation – Building
Current Liability:
•debts that a business expects to
pay within 12 months

LIABILT
Non-Current
Y Liability:
•debts that a business expects to
pay longer than 12 months
Current Liability:
•Notes Payable
•Accounts Payable
•Interest payable
LIABILT •Taxes payable
Y •Salaries payable
•Accrued Expenses
Non-Current
Liability:
•Long Term lease
Obligation
•Long term loans

LIABILT •Mortgages

Y
EQUITY •Owner’s
Capital

•Owner’s
Drawing
•Sales
•Sales Return and
Allowances
•Sales Discount
•Professional Fee Income
INCOME •Rent Income
•Interest Income
•Commission Income
•Service Income
•Purchases
•Purchase Return and Allowances
•Purchase Discount
•Freight in
•Freight out
•Salary Expense
•Supply Expense
•Rent Expense

EXPENS •Advertising Expense


•Bad Debts

ES •Depreciation
•Utilities expense
•Taxes and licenses expense
•Miscellaneous Expense
Accounting Period
•Also called Fiscal Period

•It is a segment of time, usually a year. It may be


annual, semi-annual, quarterly and monthly.

Back to Agenda Page


Accounting Cycle
•Consist of successive steps starting with the
recording of transaction in the book of accounts
and ending with a post-closing trial balance.

Back to Agenda Page


1. Journalizing

2. Posting

3. Preparation of trial Balance

4. Adjusting the Entries

Accounti 5. Preparation of the worksheet

6. Preparation of the financial


ng Cycle statement

7. Closing the entries

8. Preparation of post-closing
trial balance

9. Reversing the entries (for next


accounting period)
Journalizing
• It is the first step in the accounting
cycle. It is the process of recording
business transactions in a journal.
• A journal is also called the book of
original entry..

Journal
Entry
• Is a record of business transactions in
the journal.
• Two types (simple and compound
journal)
Back to Agenda Page
Example:

On January 1 of the current year, Mr. P. Apas


opened a tailoring shop which he name “PA
Tailoring”. He invested cash, P25,000 and
serving equipments, P100,000 in the business
Simple Journal Entry Compound Journal Entry

Back to Agenda Page


Posting
• Is the process of transferring the
records from the journal to the ledger.

Ledger
• It is also called the Book of Final
Entry.
Back to Agenda Page
Trial Balance
• Is a list of accounts with open balances
in the general ledger. It proves the
equality of the debit and the credit in
the general ledger
Journalizing
E. Mortiz, a young lawyer, completed the following
transactions during March of the current year.

March 1- He began the practice of law by investing P100,000 cash and law library equipment of
P250,000.
March 2 – Purchased P42,000 office Equipment, gave P12,000 down payment and promissory note
for the balance.
March 3 – Purchased P2,500 office supplies and P15,000 office equipments from Office Supply
Trading on credit.
March 6 - Completed legal work for R. Moore and collected P12,000 in full payment.
March 10 - Paid insurance premiums of P5,500.
March 15 - Completed legal work for United Bank on credit and billed it P32,000 for the work done.
March 15 - Paid the salary of the secretary P10,000.
March 18 - Paid Office Supplies Trading for the items purchased on the third of the month.
March 25 - Received a check from United Bank as full Payment of its account.
March 28 - E. Mortiz withdraw P15,000 from the business for his personal use.
March 30 - Paid the secretary’s salary P10,000.
March 31 - Paid P300 interest expense and full payment of the note payable.
March 31 - Paid monthly utility bills of P12,500.
Posting
Posting
Posting
Posting
Posting
Posting
Posting
Trial
Balance
Thank You

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