Accounting 3

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FABM 1 –III – 22- TO 28 PRACTICE

Exercise –
Below are Special Books used by a company to record each transactions. Indicate by letters only where the following
transactions are to be recorded.

A. Sales Journal
B. Purchase Journal
C. Cash Receipts Journal
D. Cash Payment Journal
E. General Journal

1. _____ Purchase merchandise for cash.


2. _____ Purchase equipment on account.
3. _____ Purchase merchandise on account
4. _____ Sold merchandise on account. 50% down payment, balance on account.
5. _____ Collected note plus interest.
6. _____ Sold merchandise on cash basis.
7. _____ Paid the account within the discount period.
8. _____ Purchase merchandise. Terms 30% down, balance 2/10, n/30.
9. _____ Paid a note plus interest.
10. _____ Purchase merchandise. Terms 50% down, balance a 30-day note.

Exercise --

For the transactions that follow, identify the accounts to be debited and credited and the corresponding amounts. The
first one is done for you.
DEBIT CREDIT
Transaction ACCOUNT AMOUNT ACCOUNT AMOUNT
a. A. Buyson invested P9,500 for
Copying services
b. Purchase equipment costing
P20,000 on account
c. Purchase in cash supplies worth
P1,900
d. Received P9,000 cash for
copying services
e. Paid creditors P5,000
f. Charged customers P4,000 for
copying services on account.
g. Collected P800 from customer
on account
h. Paid P1,500 for the month’s
rent
i. Withdrew P2,000 for personal
use.
j. Purchase equipment costing
P15,000 by paying cash of P5,000
and balance on account.

Exercise –

Check the normal balance of the following account.


Account title Debit Credit
1. Cash on hand
2. Accounts Payable
3. Carlos, Capital
4. Cash in bank
5. Notes payable
6. Carlos, Drawing
7. Merchandise Inventory
8. Allowance for doubtful accounts
9. Doubtful accounts expense
10.Service income
11.Prepaid insurance
12.Commission income
13.Commission expense
14.Prepaid rent
15.Supplies on hand
16.Taxes and licenses
17.Unearned commission income
18.Accumulated depreciation
19.Unused supplies
20.Utilities expense
21.Building
22.Mortgage payable
23.Bonds payable
24.Unexpired insurance
25.Office equipment
26.Furniture and fixtures
27.SSS premium expense
28.SSS premium payable
29.Unearned rent income
30.Accrued interest income

Exercise –

Complete the statement by writing either debit or credit in the blank

1. __________ Accounts receivable when you render service on account


2. __________ Accounts payable when you pay your account
3. __________ Cash when you pay expenses
4. __________ Cash in bank when you deposit money in the bank
5. __________ Capital when the owner makes an investment
6. __________ Drawing when the owner withdraws money from the business
7. __________ Salaries expenses when employees are paid their salaries
8. __________ Cash on hand when you render services for cash
9. __________ Accounts payable when you buy equipment on account.
10. __________ Notes receivable when you receive note for services rendered
11. __________ Notes receivable when it is paid
12. __________ Capital when the owner makes an additional investment.
13. __________ Service income when you render service for cash.
14. __________ Service income when you render service on account
15. __________ Accounts receivable when you collect an account
16. __________ Salaries payable when you pay the salaries unpaid last month.
17. __________ Due from customers when you render service on account.
18. __________ Advances to employees when the employees make cash advances.
19. __________ Advances to employees when their cash advances are deducted from their salaries
at the end of the month.
20. __________ Accounts payable when you return defective furniture to the seller.

Exercise –
Transaction Account Debited Account Credited
1. Invested the following assets:
Cash on hand P30,000
Equipment 16,000
2. Deposited P10,000 in the bank
3. Paid P9,000 for three month’s rent
4. Bought a typewriter for cash P5,000
5. Bought a table for P3,500 on account
6. Received P8,500 cash for services rendered
7. Billed a customer for P7,800 for services
rendered.
8. Paid salaries of employees P6,500
9. Collected one-half of the account in no. 7.
10.Paid P2,500 to our account in no. 5
11.The owner C. Carlos withdrew cash of P5,000
12.Paid light and water bill P1800.
13.Sent a bill to Mr. Santos for services rendered
P3,500.
14.Bought a machine for P10,000 on account for
which a note was issued.
15.Deposit P3,000 in the bank.

Exercise –
The following is a list of supporting documents. Indicate opposite the number the proper business document(s) to
support the transactions.

Cash Voucher Official Receipt


Purchase Invoice Notes Payable
Cash Sales Invoice Deposit Slip
Account Sales Invoice Check/Check Voucher
Credit Memo Debit Memo
_______________ A. The owner invested cash of P50,000 in the business
_______________ B. Paid rental of P5,000
_______________ C. Bought a cash register from Bourroughs, Inc. P5,000 on account.
_______________ D. Borrowed money form a lending institution P6,000.
_______________ E. Received P10,000 cash from customers for services rendered.
_______________ F. Billed Mrs. Reyes for sevices rendered P3,000.
_______________ G. Made a partial payment to Burroughs, Inc. of P2,000 on our account in
No. 3.
_______________ H. Paid Salaries, P4,000.
_______________ I. Collected the account of Mrs. Reyes in No. 6.
_______________ J. Rendered services for cash, P2,000.
_______________ K. Deposited P2,000 in the bank.
_______________ L. Issued a check for P1,000 to A. Repair Shop for repairs
_______________ M. Bought supplies for cash.
_______________ N. Burroughs, Inc acknowledged the allowance asked for a slight defect
in the cash register in the amount of P500.
_______________ O. Full payment of account with Burroughs, Inc.

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