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43 views38 pages

Fabm1 Services

fabm

Uploaded by

hahaha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 38

1 2-1

2-1

 A service business provides a needed service for a fee.


• have no physical product sold to clients. Their services are designed to
facilitate the work of clients and in return are paid.
• The revenue is usually realized once the service has been substantially
completed.
• Service business does not maintain a high level of inventory as compared to
merchandising and manufacturing businesses.
• In relatively small service businesses, all transactions are on cash payments.
This means sales are collected immediately while most expenses are paid
outright in the form of cash or checks.
2 2-2

 Ask a learner to give examples of a service business found within their


community.
 From their given examples, ask the learners to imagine and give the possible
transactions that may occur in that particular business.
 Setting up the business- payment for business permits
 Purchasing of supplies and tools/ furniture and fixtures
 Payment of rental fees
 Wages of employees
 Payment of utilities
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This may be a calendar year, which is a 12-month period that ends every
December 31 or a fiscal year, which is a 12-month period that ends on any
month
2-4

1. Transactions
2. Journal entries
3. Posting
4. Trial balance
5. Worksheet
6. Adjusting journal entries
7. Financial statements
8. Closing the books
2-5

This is critical to the accounting process because it provides transaction details


we need in order to proceed with the analyzing, identifying and measuring
phase.
Indicate the date of transaction and amount and purpose of the transaction..
2-6

To evidence purchase, and thus the recording of liability to the seller – outside,
the seller firm
2-7

To evidence the receipt of cash for a sale – outside, the seller firm
2-8

To evidence the bank charges for the period which the firm would otherwise
not know about – outside, depository bank
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To evidence receipt of cash/check payment


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To evidence payment of charges.


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 Debit refers to the LEFT and Credit to the RIGHT side of the T-Account.
 Journal entries- refers to original books of entries. These are entries of all
business transactions listed in a chronological events.
 A ledger account is a tool used for classifying and summarizing information
about increases, decreases, and balances of financial statements items.
Think of it as a storage container like a bucket.
Peso, which is used to measure economic transactions, are “poured”
into and out of the container.
Two General Ledger Account Formats:
 Three-Amount Column Format (Debit, Credit, Balance)
2-12

 Journal- book of original entry. Because we first record the business


transaction in this book in a chronological event. Through the journal, the
companies can easily detect if there are missing or unrecorded transactions.
 We can easily identify if the transaction has an effect on the company’s
assets, liabilities and capital/equity.
 It serves as a check-and-balance too of the company. The debits should
always equal the credits of each entry. As such, each entry in the journal
helps and locate errors as the debits and credits can easily compared.

 Double-entry system – for every debit, a corresponding credit is made. Total


debits should equal total credits for every transaction. In this way, the
equality of the accounting equation is maintained.
2-13

Date. The date at which the transaction occurred (chronological order)


Account Titles and Explanation (Description or Particulars). The account to
be debited and the account to be credited are recorded. The account titles are
referenced to the Chart of Accounts. Correct and proper usage of the account
titles are necessary for a clear and accurate presentation of amounts in the
financial statements. Also a brief explanation to describe the transaction
Posting Reference (PR). It is left blank during the journalizing process and is
filled out during the posting process.
Debit. Corresponding amount of the account debited is entered.
Credit. Corresponding amount to be credited is entered.
2-14

Date: It shows a chronological record of the company’s transactions. Through


the journal, the companies can easily detect if there are missing or unrecorded
transactions.
Account Titles and Explanation. The account titles are referenced to the Chart
of Accounts. Correct and proper usage of the account titles are necessary for a
clear and accurate presentation of amounts in the financial statements. Also a
brief explanation to describe the transaction
Posting Reference (PR). It is left blank during the journalizing process and is
filled out during the posting process.
Debit. Corresponding amount of the account debited is entered.
Credit. Corresponding amount to be credited is entered.
2-15

Ask students to analyze the transaction. What is the effect on the accounting
equation?
Analysis: Assets increased. Owner’s Equity or Capital increased.
Rule: Debit increase in assets. Credit increases in owner’s equity.
Entry: Increase in assets is recorded by a debit to cash. Increase in owner’s
equity is recorded by credit to Khan, Capital
2-16
2-17

Remember to skip one line before proceeding to the next transaction. The
blank space separates individual journal entries and makes the entire journal
easier to read.
2-18
2-19

Are you ready? If you are ready, let’s play, ABM Ready KNB?
2-20

ABM
2-21

It serves as a check-and-balance too of the company. It provides the


transaction’s corresponding debits and credits. The debits should always equal
the credits of each entry. As such, each entry in the journal helps and locate
errors as the debits and credits can easily compared.
2-22

It shows a chronological record of the company’s transactions. Through the


journal, the companies can easily detect if there are missing or unrecorded
transactions.
2-23

It discloses the full effect of each of the transactions per entry. We can easily
identify if the transaction has an effect on the company’s assets, liabilities and
capital/equity.
2-24

Application: Ask the following:


In what ways journalizing can be applied in your daily life or living?
How do journalizing help you in your daily living?
Generalization: Again before we proceed with our next activity,
What is a general journal?
Do you think recording in a general journal is significant in the accounting
process? Why?
2-25

It shows a chronological record of the company’s transactions. Through the


journal, the companies can easily detect if there are missing or unrecorded
transactions.
2-26

It discloses the full effect of each of the transactions per entry. We can easily
identify if the transaction has an effect on the company’s assets, liabilities and
capital/equity.
2-27

Some entries involve only two accounts, one debit and one credit (simple
entry). Some transactions, however, require more than two accounts in
journalizing. An entry that requires three or more accounts is a compound
entry.
2-28
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2-31

Some entries involve only two accounts, one debit and one credit (simple
entry). Some transactions, however, require more than two accounts in
journalizing. An entry that requires three or more accounts is a compound
entry.
2-32
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2-38

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