Bookkeeping Quiz No. 1

Direction: Choose the letter of the correct answer.

http://www.makeaquiz.net?quiz=51953&k=510da17288b1793708a8365c50f9415c

BASIC ACCOUNTING TERMS

ASSETS. These are the economic resources that are owned by the business and are expected to benefit future operations.

Cash - includes money and any medium of exchange acceptable by bank for deposit such as coins, checks and money order.

Accounts Receivable – due from customers for services rendered on account or sales make on credit.

Notes Receivable – due from customers evidenced by a written promise to pay a definite sum of money for a specified period of time.

Supplies – includes all types of supplies or more specifically as Office Supplies for bond paper, duplicating paper, ribbons and ink for computer, paper clips, and many more; Store Supplies for paper or plastic bags, wrapping papers, packing tape, string or straw and many more; Cleaning Supplies for soap, disinfectant, floor maps, floor polishing and many more.

Prepaid Expenses – these are prepayments of future expenses like prepaid rent, prepaid insurance (normally insurance premium is paid in advance for six months or one year) and other item of expenses paid in advance.

Office Equipment - include computers, printers, check writers, duplicating machines, desk calculators, and other electronically operated equipment.

Furniture and Fixtures – includes office table and chairs, filling cabinets, computer tables, shelves and paintings.

Building – such as office building, warehouse, factory building, store building and other structures used in business.

Building Improvements – improvements done on buildings and offices.

Land - land owned and being used in business.

LIABILITIES.  These are financial obligation or debts of the enterprise.

Accounts Payable – for the cost of purchases on credit.

Notes Payable – for liabilities evidenced by a written promised to pay a specific amount of money in the future.

SSS Premium Payable – for contributions of employer and employee to be remitted to the Social Security System.

WHT Payable – for taxes withheld from salaries of employees to be remitted to the Bureau of Internal Revenue.

Vat Payable – due to Bureau of Internal Revenue representing 12% tax on purchases/sales.

Unearned Revenue – Advance payments by customers for services to be rendered in the future.

OWNER’S EQUITY OR CAPITAL. This represents owner’s claims on the assets of the business. Owner’s equity is also residual equity because the owner get only what is left after the creditors have been satisfied in full.  This account includes the original investment by the owner, additional investment, personal withdrawal, revenues earned and costs and expenses incurred to match the revenues.

Source:
Fundamentals of Accounting P-1 (Accounting for service, Merchandising and Manufacturing)

By: Gloria Ardaniel Rante

ERRORS IN THE ACCOUNTING PROCESS

An inequality of debits and credits would automatically signal the presence of an error.  Some possible errors that would cause the inequality of the trial balance are:

1. Failing to post part of a journal entries.

2. Posting a debit as a credit, vice versa.

3. Incorrectly determining the balance of accounts.

4. Recording the balance of an account incorrectly in the trial balance.

5. Omitting an account from the trial balance.

6. Incorrectly determining the totals of the two columns of the trial balance.

7. Listing a debit balance of an account in the credit column.

There are several errors committed during the recording the recording process that will not affect the equality of the trial balance. Examples are:

1. Not recording a complete transaction.

2. An erroneous amount is recorded for both debit and credit.

3. A transaction may be recorded twice.

4. A transaction may be recorded correctly but posting a part of the entry to a wrong account.

To locate an error, a bookkeeper normally works backward through the steps in the accounting process starting from:

1. Re-adding the trial balance columns.

2. Compare the trial balance with the balances per account.

3. Verify the balance of each account by re-footing.

4. Verify posting to the ledger.

5. Verify journal entries.

6. Review the transactions, if necessary.

 Reference:

Fundamentals of Accounting P-1 (Accounting for service, Merchandising and Manufacturing)

By: Gloria Ardaniel Rante

Worksheet- is a columnar form which the financial condition of a business enterprise is summarized.  This work facilities the preparation of financial statements.

Preparing A Worksheet

Adjusting Entries Tutorial

       Importance of Adjusting Entries

Adjusting Entries are entries made at the end of the period to assign revenues to the period in which they are earned and expenses to the period in which they are incurred.

Many accounts need adjustments to reflect the current conditions as of time of reporting in order for the statements to be meaningful.  There may be financial data not previously recognize that need to be recorded to make the books of accounts up to date like expenses already incurred but no payment until some time in the subsequent period, and revenues already earned but no cash is collected.  Other transactions like prepayments of expenses may result to over statement of expenses if the unused portion is not adjusted.  

Adjusting entries, therefore, bring the assets, liabilities, revenue and expenses to their correct balances.

 Reference:

Fundamentals of Accounting P-1 (Accounting for service, Merchandising and Manufacturing)

By: Gloria Ardaniel Rante

More about importance of adjusting entries?
read this!

http://www.svtuition.org/2009/11/why-are-adjusting-entries-important.html

http://www.ehow.com/info_8679479_accounting-importance-adjusting-entries.html

http://voices.yahoo.com/the-importance-adjusting-entries-8715029.html

Preparation of Financial Statement

             All accounting reports require a heading which is written on the first three lines at the center of the report being prepared.

1st line - Name of the Company

2nd line - Title of the report or statement

3rd line - Date of report

         For Income Statement, the date is written as: For the month ended________________or for the year ended_________ or for the six months ended_____________

       For Balance Sheet or Statement of Financial Condition, the date is written as: As of a certain date

INCOME STATEMENT SAMPLE

STATEMENT OF CHANGES IN CAPITAL SAMPLE

STATEMENT OF FINANCIAL CONDITION (BALANCE SHEET) SAMPLE

references: 
Fundamentals of Accounting P-1 (Accounting for service, Merchandising and Manufacturing)

By: Gloria Ardaniel Rante

Preparation of Trial Balance

            To prove the equality of debits and credits, let us now prepare a Trial Balance.  A Trial Balance is a list of all accounts with their balances.  Remember that assets, expenses and drawing have normal debit balances, while liabilities, capital and revenue have normal credit balances.

           A Trial Balance is a proof that equal debits and credits have been recorded for all transactions but not a proof that the recording is accurate.  It shows also that the addition of the account balances in the trial balance has been performed correctly, resulting to the equality of debits and credits.

           The accounts in the trial balance are listed in this order according to their account numbers:

    Assets (arranged according to their liquidity)

      Liabilities

      Capital

      Drawing

      Revenue

      Expenses

references: 
Fundamentals of Accounting P-1 (Accounting for service, Merchandising and Manufacturing)

By: Gloria Ardaniel Rante

This is a sample of Trial Bance

Asynchronous Presentation

Accounting Cycle to Trial Balance

http://www.slideshare.net/jhayfox14/accounting-cycle-to-trial-balance-14582287

Trial Balance Tutorial

Group Texting Activity!

This is our group activity for the next meeting, review on journalizing!

Instructions: 

a. Each group will choose  representatives who will write the answer on the board and the other members of the group will be picking questions on the box at the back.

b. They will send their answer to the representative using cellphone and after receiving the message he/she write it to the board.

c.Each Group will be given 5 minutes to pick and answer the questions.

d.The group who got the highest correct scores will be the winner.

Want a Game?

Arithmetic Game

http://www.gamesbox.com/games/21197/Arithmetic_Challenge#.UGJXJ7KPUqM

Rubrics for Classroom Paticipation

http://www.sites4teachers.com/links/redirect.php?url=http://www.rubrics4teachers.com/sample/ParticipationRubric.pdf

 E- PORTFOLIO

If you need sample pictures about bookkeeping, click the Link below.

http://www.facebook.com/media/set/?set=a.497381910272316.119921.497368200273687&type=3

Facebook Page

http://www.facebook.com/bookkeepers14?skip_nax_wizard=true

Please Visit this page!

Online Poll. . .

http://www.proprofs.com/polls/poll/?title=do-you-enjoy-studying-bookkeeping

Lets have a quiz!

http://www.proprofs.com/quiz-school/story.php?title=bookkeeping-cycle-quiz-no-1

Posting to the General Ledger

Posting Journal Entries to the General Ledger

      The purpose of posting to a ledger is to apply the deposits and charges to the specific account in which they belong.  A ledger is a compilation of accounts.

The process of posting takes an entry from a journal and transfers it to the specific accounts in the ledger.

     A ledger account must be opened.  This means that the account name and number must be written on the top of a ledger form.  Once an account is opened, entries need to be made into it so that the balance for that specific account can be found at any time.  

There are seven columns in a ledger.  These columns include:

• date
• item
• posting reference
• transaction debit
• transaction credit
• balance debit
• balance credit

The item column is only used for special entries.  Special entries would include an opening balance (for cash/owner's equity), writing off an uncollectible account, adjustments, etc.

Below is a sample of an account ledger.

Account:					Account No.
Date	Item	Post. Ref	Debit	Credit	Balance
					Debit	Credit

Posting from the journal to the ledger involves the following steps:

1.  Enter the date of the journal entry in the date column of the ledger.

2.  In the posting reference column, write a "G" for general journal, followed by the page number of the journal that the entry came from.  Ex: page 1 of the general journal would be abbreviated as G1.

3.  Enter the amount of the debit or credit in the respective column. 

4.  Calculate the new balance.  Keep in mind what the normal balance is for the account (from Unit 5).  If the account has a normal debit balance and the entry is for a debit, you would add the two together to get the new debit balance.  If the account has a normal debit balance and the entry is for a credit, you would subtract the amount of the entry from the prior balance to get your new debit balance.  The same concept applies to accounts with normal credit balances.

5.  Once you have filled in all of the information in the ledger, you need to take the account number of the account that you are working on and write it in the posting reference column on the journal on the line of the entry that you have just completed posting.

If the account should have a zero balance after an entry is made, indicate so by drawing a single line through the normal balance column.

Reference:
http://www.educ.uidaho.edu/bustech/accounting/Introductory/acctng_posting_ledger.htm

Here is an example of Posting. Watch this VIDEO TUTORIAL. .

      

       

                                               Source of Video: Youtube.com

Related sites about Posting to the General Ledger:

Web Browsing References

http://www.futureaccountant.com/accounting-process/study-notes/posting-ledger.php

http://www.ehow.com/how_4423056_post-accounting.html

http://www.accountingunplugged.com/2008/09/19/accounting-journals-and-ledgers/

http://classof1.com/homework_answers/accounting/ledger_posting/

Journalizing

WEB BROWSING REFERENCES

This are some examples of journalizing. Hope it will help!

http://accountinginfo.com/study/je/je-101.htm

http://www.swlearning.com/swepstuff/previews/files/accounting/0538435240/blue_ch04.pdf

http://answers.yahoo.com/question/index?qid=20110709173503AA7ixtR

THE ACCOUNTING PROCESS

  Steps in the accounting process:

        1. Analyzing business documents.

        2. Recording business transactions in the journal to have chronological records of economic      activities.

       3. Posting to the general ledger to create a record of classified accounts.

       4. Preparation of trial balance to prove the equality of debits and credits in the general ledger.

       5. Making ends of period adjustments.

       6. Prepare a work sheet to facilitate the preparation of financial statements.

       7. preparation of financial statemernts.

       8. Journalizing and posting closing entries.  the objective of closing entry is to transfer the revenue, expense and drawing accounts to the capital account.

      9. Preparation of post-closing trail balance to ensure that the ledger remains in balance after posting the closing entries.

 Reference:

Fundamentals of Accounting P-1 (Accounting for service, Merchandising and Manufacturing)

By: Gloria Ardaniel Rante

Rules of Debit and Credits

Asynchronous Presentation

http://www.slideshare.net/jhayfox14/rules-of-debit-and-credit-14448003

What is Accounting?

            Accounting is a service activity which function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.  It identifies, records, and processes business activities to come up with financial reports that are measured in monetary terms to show the financial condition of the business.

Function of Accounting

        Accounting encompasses several function:

        1. The first function is to Identify the different business activities relevant to the operation of an organization.

       2. The second function id the recording of these business activities either manually or electronically.

       3. After recording, financial reports are prepared, analyzed and interpreted to different users of accounting information depending on their economic needs.

       Examples of Financial Reports are:

       1. Income Statement - shows the result of the business operation.

       2. Balance Sheet - shows the financial condition of the business.

       3. Statement of Cash Flows - shows the sources and uses of the organization's funds.

       4. Statement of Changes in Owner's Equity.

Branches of Accounting

       Financial Accounting - is focused on the recording of business transactions and preparation of financial statements to communicate the results of operation and financial condition of the enterprise to the external users.

      Management Accounting - is focused on providing the management with accounting information relevant to the activities of the different managers in enterprise.

The accounting profession

1. Public Accounting - In Public accounting, an accountant may practice as an individual practitioner practitioner or may join an accounting firm.

2. Private Accounting - Not all CPAs are public accountants.  The scope of activities of private accountants is very wide.  Some are financial accountants who primarily records transactions and events, prepare financial statements, and provide timely reports to management.

3. Government Accounting - Accountants are not only working with private companies or accounting firms.  Government agencies like Polytechnic University of the Philippines (PUP) and other state universities and colleges, Commission on Audits (COA), Bureau of Internal Revenue (BIR) Bureau of Customs, National Home Mortgage and other government agencies need the service of accountants.

4. Accounting Education - Educators play a very important role in the development of future professionals like accountants.

Reference:

Fundamentals of Accounting P-1 (Accounting for service, Merchandising and Manufacturing)

By: Gloria Ardaniel Rante

This blog is created for educational purposes only!

Hope it will help you! 

By: J. J. Gonzales