Notre Dame of Masiag, Inc.

Masiag, Bagumbayan, Sultan Kudarat

Government Recognition (R-XII) No. SK 405761-040, s. 2021
DepEd ID: 405761 ESC ID: 1201693
TIN: 000-578-187 (Non VAT)

LEARNING PLAN
S. Y. 2024-2025
SUBJECT: FUNDAMENTALS OF ACCOUNTANCY, BUSINESS & MANAGEMENT 1 QUARTER: 1
GRADE LEVEL: 12 WEEK: 11

TOPIC:
BUSINESS TRANSACTIONS AND THEIR ANALYSIS AS APPLIED TO THE ACCOUNTING CYCLE OF A SERVICE
BUSINESS
CONTENT STANDARDS:
The learner demonstrates understanding of…
The business transactions and their analysis, to include definition and nature of business transactions, type of source or business
documents, and the rules of debits and credits.
PERFORMANCE STANDARDS:
The learner is able to …
Identify the business and nonbusiness transactions, enumerate the types of business documents, recite the rules of debit and credits, and
apply theses to simple cases.
LEARNING COMPETENCIES:
The students will be able to:
1. Describe the nature of transactions in a service business; ABM_FABM11- IVa-d -30
2. Records transactions of a service business in the general journal; ABM_FABM11- IVa-d -31
3. Post transactions in the ledger;
4. Prepares a trial balance ABM_FABM11- IVa-d -32
5. Prepare adjusting entries; ABM_FABM11- IVa-d -33
6. Completes the accounting cycle. ABM_FABM11- IVa-d -34

INTRODUCTION

You learned the different types of businesses from the activities you accomplished. Those are service,
merchandising and manufacturing. Each type of business requires different accounting procedures.
In this lesson, you will start to apply accounting concepts and principles in a service type of business. A service
business offers intangible products to customers, which means that there is no physical product involved. The owner earns
income by providing services that may benefit and satisfy the clients. Examples of these are funeral services, nail salons,
hospitals, and barbershops. It also includes the rendering of services of professionals like doctors, lawyers, and
accountants. The succeeding parts of the lesson will cover the recording of business transactions for a service business,
which is called journalizing. This is just one of the steps included in the accounting cycle given on the next page. These are
the steps in the accounting cycle that will be repeated once the accounting period ends:

INSTRUCTION/DELIVERY
PROCEDURE
A. MOTIVATION
Activity 1: FINANCIAL OR NOT?
Directions: Analyze the given transactions below. Write FINANCIAL if the transaction is a financial transaction. Write NONFINANCIAL
if the transaction is not. Write your answers on a separate sheet of paper.
1. The owner paid the salaries of the employees.
2. The owner conducted an orientation to newly hired employees.
3. The owner paid electric, water, and telecommunication bills.
4. The owner received payment from customers.
5. The owner post advertisements in the city.
6. The owner awarded Employee of the Month to a deserving employee.
7. The owner purchased a furniture and paid it in cash.
8. The owner received payment from customers on account.
9. The owner signed the contract to new supplier.
10. The owner withdrew cash from the business
B. ACTIVITY:
Activity 1: Answer Me!
Direction: Write TRUE if the statement is correct and FALSE if it is not. Write your answers on a separate sheet of paper.
1. The journal is called the book of original entry where transactions are first recorded.
2. Source documents are important in journalizing.
3. If the accountant mistakenly analyzed the transaction, it would result to a wrong journal entry.
4. The peso sign is always written before every amount in a money column to avoid confusion.
5. Journal entries require an explanation.
6. Transactions are journalized based on analysis as to their effects on assets, liabilities, owner’s equity, revenue, and expense.
7. Only the two-column journal is being used in accounting.
8. Accountants must record the transaction with supporting documents such as the official receipts, sales invoice, and payroll registers.
9. A compound entry has two or more debits and credits.
10. A transaction may be recorded on the day of recording and not on the day when the transaction occurred.

C. ANALYSIS
This time, you need to reflect on the following questions because it will help you to understand the appropriate way
on illustrating and classifying a random variable. Answer the following questions:
1. How do you find the activity?
2. How did you identify if the given statement is TRUE or FALSE?
3. What are the rules of debit and credit?

C. ABSTRACTION
After analyzing business transactions using the rules of debit and credit, you are now ready to take it to another level. In this
activity, accountants will analyze business documents whether they have a financial impact or none in the business. The transactions
which are only financial in nature and have an economic benefit to the business and those which may change assets, liabilities, and
equity will be recorded.
Examples of financial transactions:
• Payment of salaries of employees
• Payment of electric, water, and telecommunication bills
• Received payment from customers
• Received payment from customers on account
• Payment for purchasing furniture, equipment, and supplies Examples of non-financial transactions:
• Orientation of newly-hired employees
• Posting of advertisements in the city
• Awarding of recognition to the business
• Hiring and terminating of employees
The following are examples of source documents:
1. Official receipt or cash receipt
2. Charge invoice or Sales invoice
3. Check or Cash voucher
4. Deposit slips
The journal is the accountant’s tool in recording the day-to-day transactions. It is called the book of original entry, where the
accountant records first the business transactions that occurred in the business. The recording of business transactions is in sequential
form. Format The journal consists of the following information:
1. Date. Enter the date when the transaction occurred. The year and month may be omitted if the transaction occurred in the same
year and month.
2. Account Titles and Explanation. First, enter the account to be debited. It must be located at the extreme left of the first line, while
the account to be credited must be located at the next line which is slightly indented. A brief description of the transaction is usually
made on the line below the credit. Generally, skip the line after each entry.
3. P.R. (Posting Reference). The chart of accounts provides account numbers for each account title. The accountant will enter those
account numbers in this column once the account titles are used in a journal entry.
4. Debit. The amount to be debited is entered in this column.
5. Credit. The amount to be credited is entered in this column. The example below shows a journal entry.
After the identification and measurement of the transactions or events, the next step is to record them in a journal. The chart of
accounts will be provided for reference in P.R. portion of the journal. For you to better understand the lesson, an analysis is provided
below.
After recording transactions in the journal, the next step is to transfer them to the general ledger. You must post every transaction from
your journal into the ledger. The ledger is the book of final entry. It is used to organize and classify transactions on which the journal
entries will be transferred into their specific account. The line items are called ledger entries. From the journal, the debit and credit
amounts will be transferred to the ledger account. Next is to compute the balance of each account after posting entries to the ledger.
Read the following: • Calculate the running balance of each transaction in the ledger account by adding if the amounts are in the same
column and subtracting if the amounts are in different columns. • After all the transactions have been posted, the last running balance
will be the ending balance.
This is how you are going to post transactions from the general journal to the ledger.
Each title in the chart of accounts has its own ledger. The ledger shows all the movements of transactions (increase and decrease) in
each account which were initially reflected in the journal as journal entries. Here are the simple steps in posting journal entries to the
ledger: 1. Choose the proper column from which you will enter the information. If the journal entry for the particular account is debited,
then you have to fill in the debit side of the ledger. 2. Fill in these necessary data: • Date of the journal entry • Explanation (explanation
written on the journal entry) • J.R. or Journal Reference (the page number of the journal from which the journal entry was entered) •
Amount (amount of the transaction) 3. After you posted all the journal entries, the account balance will be determined by transferring
the amount to the balance column. If the amount of the succeeding transactions is in the same column, you have to add it to the
balance. If the amount of the succeeding transaction is in the other column, you must subtract the amount to the balance.

For a deeper knowledge regarding the posting of transactions in the ledger, we will take Pamilya Services as an example.
Make sure that you have posted all the transactions in the general journal. This will ensure that you will have a balanced amount in the
trial balance.
After posting transactions in their corresponding ledger accounts, its debit and credit balances must be reflected in a trial balance. The
preparation of this statement will serve as the basis for the final accounts of the business. This is important because it can determine
the accuracy of the accounts. If both columns of the trial balance tally, we can reasonably assure that the accounts are accurate. It
does not mean that they are free of all errors, but it can at least establish mathematical accuracy.
After computing the balance of each ledger account, the next step is the preparation of trial balance. The trial balance is a list of all
accounts with their respective debit and credit balances. It shows the equality of the debits and credits at a given time. The accounts
are listed in the same manner they appear in the ledger. In the trial balance, they will have either a debit or credit balance following
their balances in the ledger. Those accounts having zero balances are skipped. Look at the table below. Example of a trial balance.
The following are the simple steps in preparing the trial balance: 1. Indicate in the heading (centered) the details of the trial balance
(name of the business, the term “Trial Balance”, and the date). 2. List the open accounts and their balances. 3. Total the debit and
credit columns. 4. Double rule the total of the debit and credit columns. It means that you must put two lines after the amounts have
been equaled and balanced. For a deeper understanding of the lesson, look at the ledger accounts of Pamilya Services as an example.
Take note of the following: • listings of accounts (same order as presented in the ledger accounts and account chart) • debit and credit
amounts (taken from the account balances)
This is how the trial balance of Pamilya Services will look like.

• The account titles are arranged based on their order in the chart of accounts, starting from the asset accounts to expense accounts. •
The total debit balance and credit balance are equal. • Accounts Receivable was skipped because it has zero balance. The peso sign
shall only be seen on the first figure of debit and credit columns, and on the total amounts. • Take note that the debit and credit
balances per account are in their normal account balances. • Total must be double ruled.

To further understand the lesson, let the students watch the video given the link below.
https://www.youtube.com/watch?v=OfJZCH4zPiY&t=5s
D. APPLICATION

This time, it’s your turn to shine. Answer the following as directed.
Practice Set 1
Mr. Laban Deyro opened his laundry business in Iloilo City on January 2, 2016. The following transactions occurred during the month of
January 2016:

Required Tasks
1. Prepare the general journal entries for the above transactions (ignore giving
explanations after every entry)
2. Post the following transactions to the general ledger.
3. Prepare the unadjusted trial balance as of January 30, 2016

B. Journalize Me!
Direction: Journalize the following transactions of Tam-is Bakeshop for the month of December 2020. Use the
provided format below.
2020
December 3 Ms. Tam-is invested Php300, 000 in the business.
5 Paid cash Php 15,000 for electricity bill for the month.
15 Purchased kitchen equipment Php50, 000 on account.
25 Paid baker’s salary for the month, Php20, 000.
Account Titles and
Date P.R. Debit Credit
Explanation

ENRICHMENT

Ask to students to answer the following additional activities.

Directions: Using the Rules of Debit and Credit analyze the transactions below and indicate (+) if the account increase, (-) if the
account decrease, and (0) if the account is not affected.

VALUES INTEGRATION
Let the students reflect on the question below.
Activity 5. Let’s Reflect!
1. As Notre Damean, which of the core values NOTRE DAME developed/activated in yourself as we tackle the topic ?
EVALUATION

Activity 6: Let’s Evaluate!

A. Directions: Indicate whether the accounts have a Debit or Credit balance. Put a check
(✓) in the corresponding column.
B.
Directions: Using the Rules of Debit and Credit analyze the transactions below and indicate (+) if the account
increase, (-) if the account decrease, and (0) if the account is not affected.

C.
Directions: Analyze the following transactions and apply the Rules of Debit and
Credit. Write your answer in the space provided.
As a graduate of ABM Strand, you decided to open a Beauty Shop business. The following transactions transpired during the first
month of your business operation:
1. You invested ₱20,000 cash in your business.

_____________________________________________________________
2. You paid taxes and licenses, ₱1,500.

_____________________________________________________________
3. Bought furniture and fixtures on credit ₱3,000.

_____________________________________________________________
4. Bought supplies, ₱1,200 on cash.

_____________________________________________________________
5. Paid the account due to creditors.

_____________________________________________________________
6. Received ₱5,000 from various customers for services rendered.

_____________________________________________________________
7. You withdraw ₱2,500 cash for personal use.

_____________________________________________________________
8. Billed a customer for ₱1,500 for services rendered.

_____________________________________________________________

9. Paid salaries and wages to employees, ₱1,200.

_____________________________________________________________
10. Collected the full amount due from an account customer.

_____________________________________________________________
Prepared: Checked: Approved:

LANY T. CATAMIN LANY T. CATAMIN DANILO B. MONTOY, MAEM

Teacher SHS Coordinator Principal