St.

Paul University Philippines

Tuguegarao City, Cagayan

School of Business, Accountancy and Hospitality Management

Requirements in
FUNDAMENTALS OF ACCOUNTING
2nd SEM S.Y. 2021-2022

Part 1. Determination of Accounting Elements For each account, indicate whether this
is an Asset, Liabilities, Owner’s Equity, Revenue or Expense.

1. EQUIPMENT 8. WITHDRAWALS 15. RENT PAYABLE

2. DEPRECIATION 9. SALES 16. BUILDING
3. ACCOUNTS 10. SERVICE FEE 17. LAND
RECEIVABLE
4. ACCOUNTS PAYABLE 11. NOTES PAYABLE 18. LOANS PAYABLE
5. INVESTMENTS 12. PREPAID EXPENSES 19. UTILITIES Expense
6. SALARY 13. Cost of Sales 20. DELIVERY VAN
7. UNEARNED INCOME 14. CASH

Part II. Using your basic accounting equation, Asset = Liabilities + Owners Equity, and
Revenues – Expenses = Net Income or (Net Loss), determine the missing item.

Assets Liabilities Owners Equity

1. 134,000 58,000
2. 165,000 90,000
3. 87,000 145,000
300,000
4. ½ of equity
600,00
5. 2/3 of assets
Revenues Expenses Net Income (Net Loss)
6. 129,000 64,000
7. 27,000 98,000
8. 184,000 79,000
9. 116,000 176,000
10. 118,000 (33,000)

Part 3 Identification: Below are the characteristics/nature of the different types of

business organization. Identify whether the following is a characteristics of:
A. Sole proprietorship D. Service business
B. Partnership E. Merchandising business
C. Corporation, F. Manufacturing business
Just write the letter of your answer

1. A form of business ownership wherein one of the advantages is that there is no

conflict created when making decision
2. One characteristic of this business is unlimited life.
3. In this business the owner is simply the manager.
4. This is the simplest type of business organization.
5. It is a form of business organization wherein two or more person contributes
money, property, and industry to a common fund for the purpose of dividing the
profits among themselves.
6. It involves the acquisition of raw materials and turning it into a finished product.
7. It involves the buy and sell of finished product.
8. Example of this business is hotel and restaurant.
9. Example of this business is a hospital.
10. One of the disadvantage of this business limitation on raising up capital.
11. One of the limitation of this type of business is conflict in decision making.
12. One its characteristic is limited life.
13. One of its characteristics is unlimited liability.
14. It renders service for a fee.
15. It has the most complicated procedure in its formation.

Part 4 True or False Write the word TRUE if the statement is correct and FALSE
if the statement is wrong.

1. A withdrawal by the owner is recorded as a deduction from the assets and an

increase in equity.
2. Payment of liability will not affect total assets but will cause total liabilities to
decrease.
3. When business receives cash, it is always recorded as an increase cash.
4. The owner’s withdrawal account decreases owners’ equity.
5. The liability created when supplies are bought on cash basis.
6. Capital represents the owner’s investment or equity in the business.
7. Every transaction is recorded in terms of increases and or decreases in two or more
accounts.
8. Every transaction affects one account only.
9. Expenses increases owner’s equity.
10. When services are rendered by the business, it decreases revenue.
11. When there is a purchase of equipment on cash, it increases liabilities.
12. Expenses paid in advance are called prepaid income.
13. Expenses incurred but not yet paid just like electricity bills are is recorded as asset.
14. Withdrawals made by the owner decreases assets and increases equity.
15. Collection of accounts receivable decreases accounts receivable balance.
16. In recording, debit must be always equal to credit.
17. The book where transactions are recorded for the first time is general journal.
18. General journal is a three column book.
19. Recording is the same with bookkeeping
20. Accounts payable is an example of asset.

Part 5 and 6 Analysis of Financial Transaction, Recording, Posting and

Preparation of Trial Balance
Ramon Cruz Laundry Services is a laundry shop is doing laundry services to big
establishments like restaurants, hotels and hospitals. Presented below together with the
account name together with the account numbers that is being used to record the
transactions of the business.
Accounts
301 Cash
302 Accounts receivable
303 Notes receivable
304 Prepaid Advertising
305 Prepaid Rent
305 Laundry Supplies
401 Laundry Equipment
402 Furniture and Fixtures
402 Vehicle
501 Accounts Payable
502 Notes Payable
510 Loans Payable
700 Cruz, Withdrawals
701 Cruz, Capital
801 Service Revenues
901 Salaries Expense
902 Insurance Expense
903 Repairs and
Maintenance Expense
904 Utilities Expense
905 Miscellaneous
Expenses
906 Taxes and Licenses

The following are the transactions that occurred during the month of December
Dec. 1 Ramon invested P300,000 to start the business.
Dec. 2 Borrowed P200,000 from the bank as an additional capital.
3 Purchased laundry equipment, P150,000. He made a downpayment of
30% and the balance on account.
4 Purchased furniture’s for the office, P80,000. He made a downpayment
of 20% and issued a note for the balance.
5 Paid for advertisement, P18,000
6 Paid for 3 months’ advance rent, P15,000
7 Purchased laundry supplies for cash P20,000
 8 Rendered laundry services to clients on cash, P10,000, on account,
P15,000
9 Paid accounts to some suppliers, P35,000
10 Cash receipts from walk in clients for the months, P9,000.
17 Acquire laundry supplies on cash, P18,000
18 Bought second hand delivery vehicle for cash, P110,000
20 Paid repairs on the vehicle, P9,000
21 Paid for taxes for the 3rd quarter, P4,000
22 Collected accounts from client P6,000.
24 Received utility bills for the month, P2,000. Utility bills are to be
paid 15 days
upon receipt of the bills.
25 Rendered laundry services to clients on cash, P15,000, on account,
P20,000
26 Received P6,000 from clients for laundry services for the 1 st quarter
of next year.
28 Paid salaries of the employees, P15,000 and year end benefits,
P5,000
29 Paid monthly amortization of loan, P20,000,
30 Received 50% payment of account from client in transaction, Dec. 25.
31 Made withdrawal of P10,000 for personal use.

Required:
1. Record the above transaction using the financial transaction worksheet.
2. Record the transactions using two column journal
3. Post to the ledger using T accounts
4. Create the trial balance
5. Prepare the Financial Statements

Part 7 Supply the missing amounts in each of the following:

A B

Purchase returns and 1 2,480

Allowances

Sales Returns and Allowances 4,500 6,200

Goods available for sale 69,000 77,500

Freight in 2,000 5,000

Freight out 3,000 12,000

Merchandise Inventory, 35,000 19,000

beginning

Merchandise Inventory, end 19,000 3

Purchases 47,500 4

Sales Discount 3,200 4,600

Purchase Discount 2,750 2,175

Cost of Goods Sold 2 54,000

Part 8 Preparation of Financial Statements

The ledger account balances of Joel Masigasig Enterprises for the year ended
December 31, 2017 is shown below:

Accum. Depreciation- office P200,000 Notes Payable due in 400,000

building 3 years
Accum. Depreciation- office 300,000 Office building 3,200,000
equipment
Accounts receivable 272,000 Office equipment 1,140,000
Accounts payable 148,000 Office supplies 84,000
Cash 144,000 Prepaid advertising 150,000
Freight in 144,000 Purchase discount 344,000
Insurance Expense 50,000 Purchase returns and 266,000
allow.
Interest expense 416,000 Purchases 5,286,000
Masigasig, Capital 3,020,000 Salaries expense 1,724,000
Masigasig, Withdrawals 400,000 Sales discount 322,000
Land 800,000 Sales returns and 374,000
allow.
Merchandise inventory 1,196,000 Sales 9,200,000
Mortgage Payable 2,200,000 Travel expense 376,000

The December 31, 2015 ending inventory is P1,446,000

Required: Prepare the statements of financial performance, changes in equity and

financial position of Masigasig Enterprises.

Part 9.Essay. Explain comprehensively.

1. Explain the importance of accounting in managing the operation of a business.

2. Describe the Accounting process in your organization
3. What branches of accounting is being used in your organization?
 4. Who are the users of the accounting information in your organization ? Describe
the objective of each user in analyzing the financial data.
5. In not less than 10 sentences, discuss what you have learned in this subject and
how could you apply it in your personal life and as a professional.

Good luck and God Bless!!

Prepared by:

Ms. Marjorie L. Bambalan

Faculty, School of Business, Accountancy and Hospitality Management

Answer Sheet (Fundamentals of Accounting)

Name: RIENALYN D. DALIGCON Course: BSBA-OM CP #: 09356834429

Part I
1. ASSET 6. EXPENSES 11. LIABILITIES 16. ASSET

2. ASSET 7. LIABILITIES 12. ASSET 17. ASSET

3.ASSET 8. OWNER’S 13. EXPENSE 18. LIABILITIES

EQUITY

4. LIABILITIES 9. REVENUES 14. ASSET 19. EXPENSE

5. ASSET 10. EXPENSE 15. LIABILITIES 20. ASSET

Part II

Asset Liabilities Owner’s Equity

1. 134,000 58,000 76,000
 2. 165,000 75,000 90,000
3. 232,000 87,000 145,000
4. 300,000 ½ of equity is 100,000 200,000
5. 600,000 204,000 2/3 of asset 396,000

Revenues Expenses Net Income (Net Loss)

6. 129,000 64,000 65,000
7. 125,000 27,000 98,000
8. 184,000 105,000 79,000
9. 116,000 176,000 (60,000)
10. 85,000 118,000 (33,000)

Part III

1. A 6. F 11. B

2. C 7. E 12. A & B

3. A 8. D 13. A & B

4. A 9. C 14. D

5. B 10. C 15. C

Part IV
1. FALSE 6. TRUE 11. FALSE 16. TRUE

2. FALSE 7. TRUE 12. FALSE 17. FALSE

3. TRUE 8. FALSE 13. FALSE 18. FALSE

4. TRUE 9. FALSE 14. TRUE 19. FALSE

5. FALSE 10. FALSE 15. TRUE 20. FALSE

 Cash Accounts Laundry Prepaid Furnitur Laundry Utility Accounts Loans Salome ,
Receivable Supplies Rent and e& Equipment Vehicle Payable Payable Capital
Insurance Fixture s

1 300,
000

2 200,
000

3 (45, 150,00 105,000

000) 0

4 (16, 80,00 64,000

000) 0

5 (18, (18,000)
000)

6 (15, 15,000
000)

7 (20, 20,000
000)

9 35,000

10

17

18

20

21

22
 24

25

26

28

29

30

31 (10, (10,000)
000)

Tot
als

Part V Financial Transaction Worksheet

Part 6 Two column journal

Accounts Debit Credit

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

Total
s

Part 7

Part 8

Required: Prepare the statements of financial performance, changes in equity and

financial position of Masigasig Enterprises.

Part 9. Essay. Explain comprehensively.

1. Explain the importance of accounting in managing the operation of a business.

ACCOUNTING-refers to the systematic and comprehensive way of recording the

financial transaction of a business, hence it is important in managing a business
because it is the number one tool in determining the strategies, observe any
expenses that exceeds the budgeted amount, it also provide the needs of a
certain records, you can also monitor the cash flow of the business, it also help
improved payment cycles as long as you all prepared the necessary system used
for it. The importance also of accounting is to provide financial information to
the stakeholders of the business, management, investors and creditors.
Accounting measures and summarizes the activities of the company and
communicates the results to management and other interested parties.

2. Describe the Accounting process in your organization

 Accounting process in our organization is the assessment and evaluation of a
specific asset to determine its value or cost. The most common assessment that
most people experience is the assessment of their property for the purpose of
calculating the tax owed on the property. We determine the market value of a
certain real property of a certain area and also determine the assessed value of
it.

3. What branches of accounting is being used in your organization?

For our organization, I think the branch of accounting we are using is the Tax ac -
counting in which involves planning for tax time and the preparation of real prop -
erty taxes. This branch of accounting aides our organization be compliant with
regulations set up.
We also used management accounting, in we we manage the different
barangays to declare their real properties, we also used managerial accounting
to provide data that our provincial head need to make further decisions about the
cycle and operations of our organization.

4. Who are the users of the accounting information in your organization? Describe
the objective of each user in analyzing the financial data.

5. In not less than 10 sentences, discuss what you have learned in this subject and
how could you apply it in your personal life and as a professional.

I have learned so much in this subject specially the theory behind accounting and learn
how to analyze the financial position of a firm or organization, which I can apply and
teach to my husband as a technique in operating our own business. I can also share him
my learning on how to analyze and report the business transactions he may have. Un-
consciously, I already used accounting in my daily life, for example, first for budgeting
and managing our spendings at home. I can identify where and how the money I have is
used. In addition, I can also record where and how much income I am getting for our fi -
nances. Accounting majors learn how to create, maintain and audit a detailed and accu-
rate system that displays the finances of a business or organization. As a professional, I
can have used accounting for our earnings, savings, loans and others, and also I can
have used accounting as a professional in reporting and try to communicate data of
other properties to other personnel, which is really in line in our organization. We are
unconsciously using the principles of accounting. Hence, it is an inescapable part
of everybody’s lives. Nevertheless, there are also other ways that we can apply
accounting to make our life better or earn/save some more of that sweet, sweet
money of ours
.