10/01/2021

Class Requirements
You need to have…

BOOKKEEPING NC-3 • Electronic Calculator

• Ballpen, pencil, pencil eraser
• Correction Tape
LECTURE 1 • Ruler
• Yellow/White Paper
INTRO TO BOOKKEEPING • Worksheet
• Journals and Ledger (optional)
• Laptop/Desktop Computer (optional)
GENSAN COLLEGE OF TECHNOLOGY, INC.
BOOKKEEPING NC-3
In partnership with the
TECHNICAL EDUCATION AND
SKILLS DEVELOPMENT AUTHORITY

Competency Outline Units of Competency

BOOKKEEPING NC-3 BOOKKEEPING NC-3

Competency Requirements THE ACCOUNTING

Accounting is the art of recording, classifying and
summarizing in a significant manner and in terms of
money, transactions, and events which are in part at least
of a financial character and interpreting the results
thereof.

It is also defined as the Language of Business.

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THE ACCOUNTING CYCLE THE ACCOUNTING CYCLE

The important activities in the accounting process… The important activities in the accounting process…

1. Identifying 1. Identifying means the recognition or non-recognition of

2. Measuring accountable events. An event is accountable or
3. Recording or journalizing quantifiable when it has an effect on Assets, Liability,
4. Classifying and Equity.
5. Summarizing 2. Measuring
6. Communicating 3. Recording or journalizing
4. Classifying
5. Summarizing
6. Communicating
BOOKKEEPING NC-3 BOOKKEEPING NC-3

THE ACCOUNTING CYCLE THE ACCOUNTING CYCLE

The important activities in the accounting process… The important activities in the accounting process…

1. Identifying 1. Identifying
2. Measuring is the process of determining the monetary 2. Measuring
amounts at which the elements of the financial 3. Recording or journalizing is the process of
statements are to be recognized and carried in the systematically maintaining a record of all economic
balance sheet and income statement. business transactions after they have been identified
3. Recording or journalizing and measured.
4. Classifying 4. Classifying
5. Summarizing 5. Summarizing
6. Communicating 6. Communicating
BOOKKEEPING NC-3 BOOKKEEPING NC-3

THE ACCOUNTING CYCLE THE ACCOUNTING CYCLE

The important activities in the accounting process… The important activities in the accounting process…

1. Identifying 1. Identifying
2. Measuring 2. Measuring
3. Recording or journalizing 3. Recording or journalizing
4. Classifying is the sorting or grouping of similar and 4. Classifying
interrelated economic transactions into their respective 5. Summarizing is the preparation of financial statements.
class. It is accomplished by posting to the ledger. 6. Communicating
5. Summarizing
6. Communicating
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THE ACCOUNTING CYCLE THE ACCOUNTING CYCLE

The important activities in the accounting process… The important activities in the accounting process…

1. Identifying 1. Identifying
2. Measuring 2. Measuring
3. Recording or journalizing 3. Recording or journalizing
4. Classifying 4. Classifying
5. Summarizing 5. Summarizing
6. Communicating is the process of preparing and 6. Communicating
distributing accounting reports to potential users of
accounting information.
BOOKKEEPING NC-3 BOOKKEEPING NC-3

THE ACCOUNTING EQUATION THE ACCOUNTING EQUATION

The general accounting formula is The general accounting formula is

ASSETS = LIABILITIES + EQUITY ASSETS = LIABILITIES + EQUITY

Assets include those economic resources, rights and
property both tangible and intangible that are owned
and/or controlled by either a natural person or a legal
entity.

BOOKKEEPING NC-3 BOOKKEEPING NC-3

THE ACCOUNTING EQUATION THE ACCOUNTING EQUATION

The general accounting formula is The general accounting formula is

ASSETS = LIABILITIES + EQUITY ASSETS = LIABILITIES + EQUITY

Assets Liabilities represent the present economic obligations of an
Cash - money and other medium of exchange that is available for general disbursement. entity that would require some form of future
Accounts Receivable - claims from customers or clients arising from the sale of goods and
services, on a credit basis, in the ordinary course of business operations.
settlement.
Merchandise Inventory - goods and products that are acquired by a merchandising business for
purposes of reselling them to customers at a higher price.
Prepaid Expenses - the right to receive benefits from expenses already paid for but are expected
to be consumed or used in the following period or periods. For example, unused office supplies.
Property, Plant and Equipment - are tangible assets that are held by an entity for use in production
or supply of goods and services, for rental to others, or for administrative purposes and are
expected to be used during more than one period.
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THE ACCOUNTING EQUATION THE ACCOUNTING EQUATION

The general accounting formula is The general accounting formula is

ASSETS = LIABILITIES + EQUITY ASSETS = LIABILITIES + EQUITY

Liabilities Equity represents the residual claim of the owner or
Accounts Payable - obligations of the business enterprise to the suppliers as a result of buying owners over the business enterprise’s assets. In a single
goods and services, on a credit basis, in the ordinary course of the business operations.
Notes Payable - obligations as a result of buying goods and/or services, on a credit basis, or as a
proprietorship, the interest or equity of the owner is called
result of borrowing money, for which a promissory note is given by the business to the the owner's equity. The equity comes from the original
supplier or lender.
Loan Payable - obligations of the business to lenders as a result of borrowing money. Usually, the investment that the owner or owners contributed towards
settlement of loans payable requires the payment of interest.
Unearned Revenues - obligations for revenues that are collected in the current reporting period
the formation and operations of the business enterprise.
but are expected to be earned in the following period or periods. It decreases as a result of personal withdrawals or profit
BOOKKEEPING NC-3 distribution, and the net loss incurred by the business. BOOKKEEPING NC-3

THE ACCOUNTING EQUATION THE ACCOUNTING EQUATION

The general accounting formula is The general accounting formula is

ASSETS = LIABILITIES + EQUITY ASSETS = LIABILITIES + EQUITY + INCOME - EXPENSES

Equity Equity
+ Original Investment + Original Investment
+ Additional Investment + Additional Investment
+ Profit or (Loss) during the reporting period + Profit or (Loss) during the reporting period
- Personal Withdrawals or Profit Distribution - Personal Withdrawals or Profit Distribution
= Equity as of the end of the reporting period. = Equity as of the end of the reporting period.

BOOKKEEPING NC-3 BOOKKEEPING NC-3

THE ACCOUNTING EQUATION THE ACCOUNTING EQUATION

The general accounting formula is The general accounting formula is

ASSETS = LIABILITIES + EQUITY + INCOME - EXPENSES ASSETS = LIABILITIES + EQUITY + INCOME - EXPENSES
Income is money that a person or a business receives in Expense is the cost of operations that a company incurs to
return for working, providing a product or service, or generate revenue
investing capital. A person's income may also derive from a
pension, a government benefit, or a gift.

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THE ACCOUNTING EQUATION THE ACCOUNTING EQUATION

The general accounting formula is The general accounting formula is

ASSETS = LIABILITIES + EQUITY + INCOME - EXPENSES ASSETS = LIABILITIES + EQUITY + NET INCOME
The general net income formula is The general net income formula is

INCOME – EXPENSES = NET INCOME INCOME – EXPENSES = NET INCOME

BOOKKEEPING NC-3 BOOKKEEPING NC-3

THE ACCOUNTING CYCLE LECTURER

The accounting cycle

ALONEY B. SOMIDO, JR.

Email: [email protected]
Mobile: 0917-157-9347; 0933-861-3298
Landline: (083)302-25-69
FB Msgr: Al Bato Somido Jr.; m.me/aloneysomidojr

Under the guidance of

MS. ARIANE KRISTINE FORTINEZ
Bookkeeping NC-3 Trainor

BOOKKEEPING NC-3

End of Lecture 1

Thank you!