MINDANAO MISSION ACADEMY

Manticao, Misamis Oriental

TEACHING GUIDE
Teacher: Honey Leigh L. Nietes Subject: Fundamentals of ABM 2 Date: August 26 – September 6, 2019

Topic/ Lesson Name Accounting Books- Journal and Ledger

Content Standard The learners demonstrate an understanding of debit and credit, journal entries
to record basic business transaction and using t-accounts, and posting to
general ledger
Performance Standard The learners shall be able to prepare journal entries for basic business
Transactions; solve exercises and problems that require using the t-account.
Learning Competency The learner:
1. Differentiate the journal from the general ledger (ABM_FABM12-IIa-b-1)
2. Determine the normal balance of an account (ABM_FABM12-IIa-b-2)
3. Prepare journal entries to record basic business transaction (ABM_FABM12-IIa-b-3)
4. Determine balances of accounts using the t-account. (ABM_FABM12-IIa
Specific Learning Outcomes At the end of the session, the learners are able to:
 Prepare journal entries to record business transactions using the journal
 Determine the normal balances of the accounts using the t-account
 Post the transactions in the general ledger (t-accounts)
Time Allotment WEEK 1 4 hrs.
Lesson Outline Introduction
Motivation
Instruction/Delivery
Practice
Enrichment
Evaluation
Materials Computer, TV, projector, whiteboard, marker
Resources Books, websites
 Procedure Teacher’s
Tips
INTRODUCTION
 Introduce the following learning objectives:
 Prepare journal entries to record business transactions using the journal
 Determine the normal balances of the accounts using the t-account
 Post the transactions in the general ledger (t-accounts)
 Review the discussion on the journal and general ledger.
 Ask the learners what is a journal and why it is called the book of original entry.
- The journal is a chronological record (day-by-day) of business transactions. It is called the book of original because it is the
accounting record in which financial transactions are first recorded
 Ask the learners what is a general ledger and why it is called as the book of final entry.
- The ledger refers to the accounting book in which the accounts and their related amounts as recorded in the journal are
posted to periodically. The ledger is also called the “book of final entry” because all the balances in the ledger are used in the
preparation of financial statements. This is also referred to as the T-Account because the basic form of a ledger is like the letter
“T”.
MOTIVATION
 Record the message Relayed!
- Students are grouped into 3 groups.
- Each group will make a straight line. The person at the back will pick one rolled paper provided in a box.
- He/she then will relay the message written on the paper to the person following her/him.
- The last person who receives the message will write it on the journal provided.
- The students then will take turns in relaying and writing the message.
- The group who could record the messages completely and correctly will receive a reward.
INSTRUCTION/DELIVERY
 The General Journal and Special Journal Many businesses maintain several types of journals. The nature of the business
operations and the volume of transactions determine the type and number of journals needed. The simplest type of journal is
called the general journal. The process of recording a transaction is called journalizing the transactions. This type of journal is
unique among journals because it may be used to record any type of business transactions. Recording all transactions in the
general journal is not cost effective and time consuming. To speed up and simplify the recording process, most businesses
make use of special journals. Each special journal is designed to record a particular type of transaction efficiently and quickly.
Examples of special journals and their use are the following:

a. Cash Receipts Journal – is used to record all cash that had been received.
b. Cash Disbursements Journal – is used to record all transactions involving cash payments.
c. Sales Journal (Sales on Account Journal) – is used to record all sales on credit (on account)

Purchase Journal (Purchase on Account Journal) – is used to record all purchases of inventory on credit (or on account)

 The importance of using a journal

 The journal shows all information concerning a particular transaction.
 The journal provides a chronological record of all the financial events in the business over time. If we want to know
about a certain transactions of years or months back, we can trace the said transactions as long as we have the date
of the said transaction. The entries in the journal are arranged by date that makes it necessary to locate a particular
event.

 The Use of General Ledger

 A ledger is a means of accumulating in one place all the information about changes in an asset, liability, equity, income,
and expense accounts.
 A general ledger is often called a T-Account because of its resemblance to the letter T. A T-Account is a simplified form
of general ledger. A sample of a T-account is shown below:

Account title

Debit Side Credit Side

Note: Recall the sample chart of accounts shown in ABM1 Chapter 8 (Types of Major Accounts). A T-Account for each of the account titles listed on the said chart is prepared
to determine the balance at the end of the period of each account.
 Determining the Balance of a T-Account

 When an account that normally has a credit balance actually has a debit balance, it may mean that an error have occurred or
that an unusual situation may exist. For example the accounts receivable account normally have a debit balance, if at the end of
the period the actual balance is on the credit side, it may mean that there was overpayment of the customer or an error in the
recording processed has occurred.

 Activity 1: Individually, let the students determine the Normal balances of the following account titles by putting a check on the debit or
Credit boxes:

Account Titles Debit Credit

Store Equipment
Building
Increase (Normal Balance) Decrease
Asset Debit Credit
Contra-Asset Credit Debit
Liability Credit Debit
Owner’s capital Credit Debit
Owner’s Withdrawal Debit Credit
Income Credit Debit
Expense Debit Credit
AccumDeprn - Building
Accounts Payable
Accrued Expenses
Salaries Payable
Income Taxes Payable
Owner’s, Capital
 Owner’s, Withdrawa
Sales
Purchases
Cost of Sales
Rental Expense
Intangible Assets
Accounts Receivable
Cash

PRACTICE

 Activity 2: Individually, Let the students Journalize the following transaction.

- On April 1, 2016, Nels Ferrer organized a business called Friendly Trucking. During April, the company entered into the following
transactions:
Apr 1 Nels Ferrer deposited Php500,000 cash in a bank account in the name of the business.
Apr 1 Purchased for Php250,000 a transportation equipment to be use in the business. Nels paid 50% as down payment while the balance
will be paid on May 15, 2016
Apr 1 Paid rental for the month of April, Php 5,000
Apr 5 Earned and collected trucking income from Ryan, Php8,000
Apr 8 Earned trucking income from Jesper, Php 30,000 on account. Jesper will pay on May 8, 2016
Apr 10 Paid salaries of drivers, Php10,000
Apr 15 Rented the vehicle to Joshua for Php35,000, Joshua paid Php20,000 on that date and the balance on April 20
Apr 18 Paid electric bills for the month, Php2,000
Apr 20 Collected from Joshua the balance of his April 15 account
Apr 25 Purchased office supplies, Php2,300
Apr 29 Earned and collected trucking income from Jay, Php 18,000
 Activity 2: Post to ledger using the T-account format
- From the journal entries that the student recorded, let them perform the posting to the ledger using the T-account format.

Example: cash
ENRICHMENT
 What records does God keep?
- God is eternal and all-knowing; therefore He knows all things at all times. Scripture tells us of a number of records that God
keeps—records that reflect His power, faithfulness, and love.

 The Works of All People

“I saw the dead, small and great, stand before God; and the books were opened: and another book was opened, which is the book of life: and
the dead were judged out of those things which were written in the books, according to their works” (Revelation 20:12).
 The Names of Christians
“Whosoever was not found written in the book of life was cast into the lake of fire” (Revelation 20:15).
 The Number and Names of Stars
“He telleth the number of the stars; he calleth them all by their names” (Psalm 147:4).
 The Hairs on Our Heads
“The very hairs of your head are all numbered” (Matthew 10:30).
 All of Our Tears
“Thou tellest my wanderings: put thou my tears into thy bottle: are they not in thy book?” (Psalm 56:8).
 The Physical Features of Every Person
“Thine eyes did see my substance, yet being unperfect; and in thy book all my members were written, which in continuance were fashioned,
when as yet there was none of them” (Psalm 139:16).
 Every Spoken Word
“I say unto you, That every idle word that men shall speak, they shall give account thereof in the day of judgment” (Matthew 12:36).
 Every Godly Work
“For God is not unrighteous to forget your work and labor of love, which ye have showed toward his name, in that ye have ministered to the
saints, and do minister” (Hebrews 6:10).
 Investments Made in God’s Kingdom
“Lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor
steal” (Matthew 6:20).
 Those Who Fear God
“Then they that feared the Lord spake often one to another: and the Lord hearkened, and heard it, and a book of remembrance was written
before him for them that feared the Lord, and that thought upon his name” (Malachi 3:16).
EVALUATION
1. State whether the following T-accounts have normal balance or not.

2. Prepare the journal entry to record the following independent transactions