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Math11 Q3Wk7a FABM1

The document discusses the nature of transactions in a service business. It defines a service business as one that provides services rather than products to customers. Typical transactions for a service business include collecting deposits from clients, providing the service, and receiving payment. The accounting cycle for a service business involves identifying transactions through documents, recording journal entries, posting to the general ledger, preparing a trial balance, and reporting financial statements such as the balance sheet and income statement.

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Marlyn Lotivio
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658 views6 pages

Math11 Q3Wk7a FABM1

The document discusses the nature of transactions in a service business. It defines a service business as one that provides services rather than products to customers. Typical transactions for a service business include collecting deposits from clients, providing the service, and receiving payment. The accounting cycle for a service business involves identifying transactions through documents, recording journal entries, posting to the general ledger, preparing a trial balance, and reporting financial statements such as the balance sheet and income statement.

Uploaded by

Marlyn Lotivio
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 PDF, TXT or read online on Scribd
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FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT 1

LEARNING ACTIVITY SHEET


NATURE OF TRANSACTIONS IN A SERVICE BUSINESS
Q3 - Week 7A
Name of Student: _________________________ Grade Level _________________
Section: _________________________________ Date: ______________________

I.
BACKGROUND INFORMATION FOR LEARNERS

What is a Service Business?

In this Learning Activity Sheet, we are going to learn the nature of


transactions in a service business. Transactions for a service business provide a
needed service for a fee. This actually has no physical product sold to customers.
Instead of products, services are rendered and designed to perform the work to
customers or clients and in return are paid.

Examples of service businesses are car repairs, medical centers, salons or


barbershops, laundry services, and services of professionals such for lawyers,
accountants and doctors. The revenue of a service business is usually realized once
the service has been performed or rendered.

Therefore, the service revenues are automatically collected while most


expenses are paid directly in the form of cash, checks or the like. The typical
financial transactions recorded for a service company includes the following:

a. collecting a deposit from the client arising from a service rendered;

b. providing the service; and

c. receiving payment for settlement.

ACCOUNTING CYCLE OF THE NATURE OF TRANSACTIONS IN A SERVICE BUSINESS

➢ Identifying Transactions

We record transactions which are financial in nature. If there are no financial transactions,
there would be nothing to keep track of. Transactions may include a debt payoff, any
purchase or acquisition of assets, service revenue, or any expenses incurred.

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Documents such as official receipts, charge invoice, or bills such as electric bill, water bill,
serve as evidence of such transaction. Other common transactions may also include delivery
of services, buying supplies, paying salaries, buying advertising and recording interest
payments.

➢ Journal Entries

When we say journal, it is known as the chronological record of company’s transactions. In


debiting one or more accounts and crediting one or more accounts, the debits and credits
must always balance.

➢ Posting to the General Ledger

The journal entries are then posted or transferred to the general ledger where a summary of
all transactions to individual accounts can be seen.
➢ Trial Balance

This is made at the end of the accounting period whether quarterly, monthly, or annually.
This shows listing of all the accounts with their related balances. Before computers, it
provided a check on accuracy by showing whether total debits equal total credits.

➢ Reporting of Financial Statements

The reporting of the Balance Sheet, Income statement, Statement of Cash Flow, and
Statement of Changes in Equity and can be prepared using the correct balances.

90
II. LEARNING COMPETENCY WITH CODE

The learner describes the nature of transactions in a service business. ABM_FABM11 Iva-d-29

III. ACTIVITIES
ACTIVITIES

ACTIVITY 1:
Read each statement carefully. Write the word TRUE if the statement is correct. If false, change
the underlined word/s to make the statement correct.
________ 1. Transactions for Service Business actually have physical product sold to customers.
________ 2. The journal entries are then posted or transferred to the general ledger where a
summary of all transactions to individual accounts can be seen.
_________ 3. Examples of documents are official receipts, charge invoice, or bills such as electric bill,
water bill that serve as an evidence of a transaction.
_________ 4. The preparation of a Trial Balance is always annually done.
_________ 5. The examples of Financial Statements include balance sheet, income statement,
Statement of Cash Flow, and statement of changes in Equity.

ACTIVITY 2:
Identify what is being described in each item. For your answer, use the blank provided before the
number.
_____________1. This type of business actually has no physical product sold to customers.
_____________2. This is the chronological record of company’s transactions. In debiting one or
more accounts and crediting one or more accounts, the debits and credits must always balance.
______________3. This refers to the official receipts, charge invoice, or bills such as electric bill,
water bill, which serve as evidence of such transaction.
______________4. The examples of these documents are balance sheet, income statement,
Statement of Cash Flow, and statement of changes in Equity.
_____________5. This provides check on accuracy by showing whether total debits equal total
credits.

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ACTIVITY 3:
Describe the nature of transactions for a service business. Write your answers inside the box.
Identifying Transactions

Journal Entries

Posting to the General Ledger

Trial Balance

Reporting of Financial
Statements

RUBRIC FOR SCORING

1 POINT 2 POINTS 3 POINTS

Describe fair understanding Describe good understanding of Describe excellent


of nature of transactions in a nature of transactions in a service understanding of nature of
service business business transactions in a service
business

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IV. REFLECTION

Reflect on the activity you have completed. Write your answer on the box.

After doing the activities:

I learned _________________________________________________________________________
_________________________________________________________________________________

A question I have in mind is __________________________________________________________


_________________________________________________________________________________

I’m not sure _______________________________________________________________________


__________________________________________________________________________________

I realized __________________________________________________________________________
__________________________________________________________________________________

V.
REFERENCES

Tugas, Florenz C. Fundamentals of Accountancy, Business and Mathematics 1. Vibal


Publishing, Inc.
Teaching Guide for SHS Fundamentals of Accountancy, Business and Management.
Manalaysay, Benedick. Fundamentals of Accountancy, Business and Mathematics 1. Anvil
Publishing, Inc.

Corporate Finance Institute. Accounting Cycle.


https://corporatefinanceinstitute.com/resources/knowledge/accounting/accounting-cycle/

Basu, Chirantan. The Usual Sequence of Steps in the Recording Process in Accounting.
https://bizfluent.com/info-10070882-usual-sequence-steps-recording-process-accounting.html

93
Prepared by:

MA. CEAZARE D. BARNUEVO


LAS Writer
Cotmon National High School

94

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