Accounting cycle: step 1 to 10, Study notes of Accounting

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ALCASAR P. MAONGCO, CPA, REB, MM

Faculty, Accountancy Department CBAA, MSU Main

AQE

COACHING DAY

(10) Reversing Entries Optional (6) Worksheet Optional

IF BOTH SIDES OF THE ACCOUNTING EQUATION OR T-

ACCOUNT ARE AFFECTED, THE SAME DIRECTION

IF ONLY ONE SIDE IS AFFECTED, OPPOSITE DIRECTIONS IF ONLY ONE SIDE IS AFFECTED, OPPOSITE DIRECTIONS

MAJOR GROUPING OF MERCHANDISING’S

BUSINESS TRANSACTIONS

BUY

TRANSACTION

SALE

TRANSACTION

NEITHER BUY

NOR SALE

PURCHASES PURCHASE DISCOUNT PURCHASE RETURNS PURCHASE ALLOWANCE FREIGHT-IN SALES SALES DISCOUNT SALES RETURNS SALES ALLOWANCE FREIGHT-OUT

APPLY SERVICE

CONCERN

WAKANDA

FOREVER

GROCERY

Summary of

transactions for the

st

month (March

2024) of operations.

Journal refers to a book wherein transactions are logged for the very first time, and that is why it is also called as “Book of Original Entry“. The general journal is the master journal that all company transactions or journal entries are recorded in. A special journal is a set of journals used to record same type of transactions. Journal is a detailed account of all the financial transactions of a business.

RESULTS TO CASH INFLOWS (DEBIT TO CASH) REQUIRES CASH OUTFLOWS (CREDIT TO CASH) PURCHASES ON ACCOUNT SALES ON ACCOUNT

Paid shop rental, P15,000. Use expense method. Rent Expense 15, Cash 15, Purchased supplies on account, P25,000. Use asset method. Supplies Inventory 25, Accounts Payable 25,

Purchased furniture and fixtures on account, P100,000. Furniture and Fixtures 100, Accounts Payable 100, Sold merchandise to customer X on account, P150,000. Customer X issued a promissory to this effect Notes Receivable 150, Sales 150,

Paid 50% of Nestle account. Accounts Payable 100, Cash 100, Collected , P200,000, from various customers on account Cash 200, Accounts Receivable 200,

Received the proceeds of PNB loan, P1,000, Cash 1,000, Bank Loan Payable 1,000, Received and paid light and water bill, P5, Utilities Expense 5, Cash 5,

Purchased merchandise from Thor, P500,000. Terms: Shipping Point, Freight Collect; 10%, 5%, 2/10, 1/15, n/30. Freight, P5, Purchases 427, Accounts Payable 427, Freight In 5, Cash 5,

Sold merchandise to Wakanda Sari Sari Store, P100,000. Terms: FOB Destination, Freight Prepaid; 10%, 5%, 2/10, 1/15, n/30. Freight, P1, Accounts Receivable 85, Sales 85, Freight Out 1, Cash 1,