Fill in the Blanks

1. ___________is the recording function of the accounting process.

2. Assets = ______________ + Owner's Equity
3. The owner's current investment or equity in the assets of a business is
called _______________.
4. A list of assets, liabilities, and owner's equity as of a particular
date is reported on a ________________.
5. ______________ create an outward or potential outward flow of assets.
6. Revenue earned on account creates an asset entitled ________________.
7. ______________ record personal expenses that are not related to the
business. They are a subdivision of owner's equity.
8. The left side of any T-account is called the ______________.
9. Assets are increased by ___________.
10. Withdrawals are increased by ________________.
11. Cash, Accounts Receivable and Equipment are examples of
________________.
12. Increasing expenses ultimately cause owner's equity to
________________.
13. An increase in rent expense is a ________________ by the rules of
debits and credits.
14. A debit to one asset and a credit to another asset for the same
transaction reflect an ________________ of assets.
15. Chubby Cat Food Supplies delivered cat food to Jolly Pet Shop but did
not receive payment from Jolly Pet Shop till the following month. This
is known as a ________________ transaction.
16. Enchanted Paws Pet Shop paid Chubby Cat Food Supplies immediately for
the cat food purchased. This is known as a ________________ transaction.
17. The basic unit to record all business transactions is called
________________.
18. The effect of each transaction is recorded in either the
________________ or ________________ column of each ledger account.
19. The double-entry recording rule states that for every transaction,
total debits must ________________ total credits. In addition, every
transaction affects at least ________________ ledger accounts.

Fill in the Blanks

Rules of Debit and Credit

The account type determines how increases or decreases in it are recorded.

Determine whether the word debit or credit is appropriate for each statement.

1. Asset accounts normally have ____________ balances. An increase in asset

is recorded as a ____________ while a decrease in asset is recorded as a
____________.
2. Liability accounts normally have ____________ balances. An increase in
liability is recorded by a ____________ and a decrease is entered as a
____________.
3. The owner's capital account normally has a ____________ balance. This
account increases on the ____________ side and decreases on the
____________ side.

4. Income accounts normally have ____________ balances. These accounts

increase on the ____________ side and decrease on the ____________ side.
 5. Expense accounts normally have ____________ balances. These accounts
increase on the ____________ side and decrease on the ____________ side.

Fill in the Blanks

a. The four phases of accounting are ____________, ____________,

____________, and ____________.
b. Increases in the capital account are ____________.
c. Increases in income accounts are ____________.
d. Increases in expense accounts are ____________.
e. The difference between assets and liabilities is ____________.
f. Financial events that occur in a business are termed ____________.
g. An investment (by the owner) in the business increases ____________ and
____________.
h. To acquire something "on account" is to create a ____________.
i. The transaction description "paid on account" means a reduction of the
asset ____________ and reduction of the liability ____________.
j. Income increases net assets and also ____________.
k. A withdrawal of cash for owner's personal use reduces cash and
____________.
l. The left side of the account is known as the ____________, whereas the
right side is the ____________.
m. Increases in asset accounts are ____________.
n. Increases in liability accounts are ____________.

True or False

1. The first Step in analyzing a transaction is to determine What accounts

are involved.
2. Capital represents the owner's investment, Or equity, in a business.
3. When a business receives cash, it is always recorded as an increase to
Cash and a decrease to an Expense.
4. Liabilities represent amounts owed to creditors.
5. In the fundamental accounting equation, assets are added to liabilities.
6. Business transactions are expressed in terms of money.
7. Accounts Receivable is considered an asset.
8. An owner can invest cash or Other assets of value in the business.
9. Both sides of the fundamental accounting equation must always be equal.
10. The liability created when supplies are bought on account is called an
account payable.
11. Equipment is listed as an asset because it is used up in a relatively
long period of time.
12. The owner's Withdrawals account is listed with the Other expenses of a
business.
13. A Withdrawal by the Owner is recorded as a deduction from assets and
an increase in expenses.
14. Assets are things of value owned by a business entity.
15. Every transaction is recorded in terms of increases and/or decreases
in two or more accounts.

Multiple Choice

1. If assets total P700,000 and liabilities total P400,000, how much are the
net assets?
 a. P300,000
b. P400,000
c. P700,000
d. P1,100,000

2. What are increases in resources that a firm earns by providing goods or

services to its customers?
a. Assets
b. Income
c. Expenses
d. Liabilities

3. If assets increase by P100,000 and liabilities decrease by P30,000, owner's

equity must
a. remain unchanged.
b. increase by p 130,000,
c. decrease by P70,000.
d. decrease by P130,000.

4. A T-account consists of how many parts?

a. One
b. Two
c. Three
d. Four

5. Which of the following is true?

a. The debit is on the right side of an asset account.
b. The debit is on the left side of an asset account.
c. The credit is on the left side of a liability account.
d. The debit is on the right side of an expense account.

6. Which of the following accounts has a normal debit balance?

a. Accounts Payable
b. Notes Payable
c. Consulting Revenues
d. Advertising Expense

7. Which of the following accounts is increased by a credit?

a. Accounts Receivable
b. Sales
c. Withdrawals
d. Advertising Expense

8. Which Of the following is true?

a. A debit will increase a liability account.
b. A credit Will increase an asset account.
c. A credit will increase a revenue account.
d. A debit will decrease an expense account.

9. In applying the rules of debits and credits, which of the following

statements is correct?
a. The word "debit" means to increase, and the word "credit" means to
decrease
b. Asset, expense and capital accounts are debited for increases.
c. Liability, revenue and capital accounts are debited for increases.
d. Asset, expertise and withdrawals are debited for increases.
Multiple Choice

1. Which Of the following accounting equations are correct?

1. Non-current assets + Current assets = Non-current liabilities -
Current liabilities + Capital
2. Assets - Liabilities = Capital + Revenue – Expenses
3. Capital + Non-current liabilities = Non-current assets + Working
capital

a. (1) and (2) only

b. (1) and (3) only
c. (2) and (3) only
d. (1), (2) and (3)

2. Which of the following is not an example of additional capital?

a. A sole proprietor purchases a car through the bank account of the
entity.
b. A sole proprietor brings a second-hand computer from his home to
the office.
c. A sole proprietor transfers P 1,000 from his own bank account to
the entity's
account.
d. A sole proprietor uses his own building as an Office without
receiving any rent.

3. Which Of the following is not an example of non-current assets?

a. a second-hand computer used in the office
b. a van that is purchased through installments the total amount of
which is not fully settled
c. P40,000 cash
d. a building bought by the entity

4. Which Of the following statements are correct?

1. The total amount of liabilities can be greater than the total
amount of capital.
2. Capital + Liabilities
3. The total amount of assets can be greater than the sum of
liabilities and capital.

a. (1) and (2) only

b. (1) and (3) only
c. (2) and (3) only
d. (1), (2) and (3)

5. The entity purchases P10,000 fixtures for entity use on credit. Which of
the following will be affected?
1. assets
2. liabilities
3. capital

a. (1) and (2) only

b. (1) and (3) only
c. (2) and (3) only
d. (1), (2) and (3)
 6. Suppose a debtor repays his debt of P50,000 by transferring the money
into the bank account of the business. The effect of the transaction on
the accounting equation would be:
a. Both assets and liabilities increase by P50,000.
b. Both assets and liabilities decrease by p50,000.
c. Only assets decrease by P50,00.
d. Assets and liabilities remain unchanged.

7. Under the double-entry system, what is the value of X if assets, current

liabilities, non-current liabilities and capital are X, P40,000, P60,000
and P350,000 respectively?
a. P250,000
b. P350,000
c. P370,000
d. P450,000

8. Which of the following is correct under the double-entry system?

a. Asset amount must be equal to liability amount.
b. The change in asset must be compensated by a change in liability.
c. The change in a debit-side entry must be compensated by a change in
credit-side entry.
d. An increase in asset must be compensated by a decrease in asset.

9. Which Of the following statements regarding the double-entry system is

incorrect?
a. An increase in asset means a credit entry in assets account.
b. A decrease in liability means a debit entry in liabilities account.
c. An increase in drawings means a debit entry in capital account.
d. A decrease in non-current asset means a credit entry in assets
account.

10. Which of the following transactions affects the total value of

liabilities of a firm?
a. goods purchased from suppliers by cash
b. interest received from bank
c. office equipment bought on credit
d. goods sold to customers on credit

11. On Apr. 1, 2019, Jerome Marquez sets up a firm and brings in office
equipment of P50,000 and inventory Of P30,000 to the business. Jerome
Marquez puts P80,000 into the firm's cash box and into the firm's bank
account. Meanwhile, the firm lends P50,000 cash to SJ and Associates and
borrows P200,000 from the bank to acquire a piece of premises. What is
the amount of the firm's capital on Apr. 1, 2019?
a. P510,000
b. P210,000
c. P260,000
d. P460,000
12. Which Of the following is correct if the sole proprietor of an entity
borrows P30,000 in the name of the entity and deposits it into the
entity's bank account?
a. The assets of the entity increase by P30,000.
b. The liabilities of the entity decrease by P30,000.
c. The capital of the entity increases by P30,000.
d. The drawings of the entity increase by P30,000.

Problem #1
Accounting Events

Kersey Sampang owns a comic shop called Kersey Manga Cards and works in the
shop. For each of the following, explain whether it is a transaction to be
recorded in the accounting books of the business:

a. Sampang took P5,000 from his personal bank account and lent it to his
friend, Fatima.
b. Sampang deposited P35,000 from his personal bank account into the
business bank account.
c. Sampang sold comic books worth P2,500 from the shop to Alend. The money
was deposited into the business bank account.
d. Sampang paid P95,000 from the business bank account for his holiday to
Europe.
e. Sampang took home P1,000worth of comic books from the shop.

Problem #2
Elements of Financial Statements

1. Using the accounting equation, complete the following table:

Assets Liabilities Equity

a P457,000 P270,000
.
b P1,006,000 P500,000
.
c P309,000 P120,000
.
d P756,000 P451,000
.
e P895,000 P148,000
.
f P668,000 P222,000
.

2. The following figures are extracted from various sole proprietorships.

Using the expanded accounting equation, complete the following table:
Liabilitie Equity
Assets
s Capital Income Expenses
a
P96,000 P56,000 P46,000 P32,500
.
b P151,00
P39,000 P86,000 P48,000
. 0
c P182,00
P65,000 P37,000 P25,500
. 0
d P123,00
P54,000 P42,000 P25,500
. 0
e
P94,000 P25,000 P37,000 P67,500
.

Problem #3
Accounting Events

Which Of the following events would be recognized in the accounting records of

Ruth Chew HR Consultants on the date indicated?
Feb. 15 Chew HR Consultants Offers to purchase a piece of land for
P1,400,000. There is a high likelihood that the Offer will be
accepted.

Mar. 2 Chew HR Consultants receives notice that its rentals for an

office space will increase from P50,000 to P60,000 per month
effective April 1.

Apr 29 Chew HR Consultants receives its electricity bill for the month
of April. The bill is due on May 9.

July 10 Chew HR Consultants places an order for an office equipment

costing P108,000.

Aug. 6 The Office equipment ordered on July 10 is delivered. Payment

is not due until Sept. 1.

Problem #4A
Elements of Financial Statements

Assets Liabilities Equity

a 760,000 360,000 ?
.
b 860,000 ? 592,000
.
c ? 108,000 760,000
.
d 626,600 376,240 ?
.
e ? 800,000 (100,000)

Required: Fill in the amount of the missing element of financial position.

problem

Problem #4B

a. Jimmy Delgado Pest Control has assets of P600,000 and owner's equity of
P450,000.
b. Margie Clavano Realtors has liabilities Of P530,000 and owner's equity Of
P410,000.
c. Marko Fuentes Plumbing Contractor has assets of P473,000 and liabilities of
P153,700.
d. Ryan Morales. Acting Studio has liabilities of P147,000 and owner's equity
of P236,500.
e. Fely Monarca Dance has assets of P624,000 and liabilities of P237,000.

Required: Compute the amount of the missing element of financial position.

Problem #5A
Income and Expenses

Income Expenses Profit

 (Loss)

a 840,000 ? 360,000
.
b 2,400,000 ? 540,000
.
c 1,300,000 860,000 ?
.
d ? 2,000,000 720,000
.
e ? 1,800,000 (400,000)

Required: Supply the missing element of performance.

Problem #5B

a. A small accounting firm has income of P325,000 and expenses of P237,000.

b. An advertising agency has expenses of P163,000 and profit of P42,000.
c, A computer-training outfit has expenses Of P153,000 and loss Of P27,500.
d. A medical practitioner has income of P737,000 and profit of P168,000.
e. An environment consultant has income Of P362,000 and loss Of P20,000.

Required: In each of the preceding five situations, determine the amount of

the missing element of performance.

Problem #6
Transaction Effects on the Basic Accounting Model

The following are some transactions Of Maricel Supan Services:

A L OE
a Received cash as additional investment. _____ _____ _____
.
b Purchased supplies on account. _____ _____ _____
.
c Charged customers for services made on _____ _____ _____
. account.
d Rendered services to cash customers. _____ _____ _____
.
e Paid cash for rent on building. _____ _____ _____
.
f Collected on account receivable in full. _____ _____ _____
.
g Paid cash for supplies. _____ _____ _____
.
h Returned supplies purchased on account. _____ _____ _____
.
i Paid cash to settle accounts. _____ _____ _____
.
j Paid cash to owner for personal use. _____ _____ _____
.

Required: For each transaction, indicate whether the assets (A), liabilities
(L) or owner's equity (OE) increased (+), decreased (-) or did not change (O)
by placing the appropriate sign in the appropriate column.
Problem #7
Effects of Transactions

The following selected transactions were completed by Roberto Orcajada

Delivery Service during July 2019:

______ 1. Cash received from delivery services, P92,700.

______ 2. Paid creditors on account, P20,000.
______ 3. Received cash from owner as additional investment, P600,000.
______ 4. Paid advertising expense, P5,000.
______ 5. Billed customers for delivery services on account, P55,200.
______ 6. Purchased supplies for cash, P6,000.
______ 7. Paid rent for July, P20,000.
______ 8. Received cash from customers on account, P25,440.
______ 9. Determined that the cost of supplies on hand was PI,440 so P4,560
of supplies were used during the month.
______ 10. Owner withdrew cash for personal use, P20,000.

Indicate the effects of each transaction on the space provided:

a. Increase an asset, decrease another asset.

b. Increase an asset, increase a liability.
c. Increase an asset, increase owner's equity.
d. Decrease an asset, decrease a liability.
e. Decrease an asset, decrease owner's equity.

Problem #8
Financial Transaction Worksheet

The assets, liabilities and owner's equity of Deogracia Corpuz who operates a
repair shop are expressed in equation form below. Corpuz completed the
following transactions:

Assets Liabilitie OE
s
Cash + Supplies + Land = Accounts + Corpuz,
Payable Capital

1. Organized a repair
shop and deposited
P500,000 cash in the
bank for use by the (1) ______________________________________
business.
2. Purchased P20,000 of
supplies on account. (2) ______________________________________
Bal. ______________________________________
3. Purchased land for
future repair site for
P140,000 cash.
(3) ______________________________________
Bal. ______________________________________
4. Paid P18,000 to
creditors. (4) ______________________________________
Bal. ______________________________________
5. Withdrew P25,000 for
personal use. (5) ______________________________________
 Bal. ______________________________________
6. Paid P28,000 for site
and equipment rent for
the month. (6) ______________________________________
Bal. ______________________________________
7. During the month,
P10,000 expenses were
incurred on account by
the business. (7) ______________________________________
Bal. ______________________________________
8. During the month,
Corpuz invested
another P100,000 of
personal funds in the
business. (8) ______________________________________
Bal. ______________________________________
9. Received P5,000 for a
cash service call. (9) ______________________________________
Bal. ______________________________________
10. Corpuz used P6,000
worth of supplies. (10) ______________________________________
Bal. ______________________________________

Required: On each of the numbered lines, show by addition or subtraction the

effect of each of the transactions on the equation. For each transaction,
identify the changes in owner’s equity by placing the letter I (income), E
(expense), W (withdrawal), or INV (investment) at the right of each increase
or decrease in owner’s equity. On the lines labeled "Bal.” (i.e. Balance) show
the new equation resulting from the transaction.

Problem #9
Transactions in a Completed Worksheet

Asuncion Alcala, to be able to guide the accountancy students in their

pursuits for CPA glory, established the AA Tutorial Services. On May 1, 2019,
she contributed P70,000 as investment to start the business. During the month,
she entered into several transactions. Note that she made no withdrawals
during the month. The following the transaction worksheet prepared by her
student-assistant:

Accounts Office Accounts Notes Alcala

Cash + Receivable + Equipment = Payable + Payable + ,
Capita
l

1 +70,000 +70,00
. 0
2 -45,000 +45,000
.
3 +30,000 +10,000 +20,000
.
4 +18,000 +18,00
. 0
5 -5,000 -5,000
.
6 +7,000 +7,000
.
7 -10,000 -10,000
.
8 +15,000 -15,000
.
9 -7,000 -7,000
.

Required:
1. Describe each of the above transactions.
2. If these transactions represent the operations of AA Tutorial Services
during the month of May, what was the amount of profit or loss before
depreciation?

Problem #10
Classification of Events as to Source, Use or Exchange of Assets

Selected transactions:

a. Set-up a salon business with cash investments from owner.

b. Hired an experienced salon general manager and five all-around salon
staff.
c. Paid rent deposit and advance rent on the Lapu-Lapu City salon space.
d. Received cash proceeds of clean loan from the Bank of the Philippine
Islands.
e. Finalized plans with the architect for the salon physical set-up and
renovations.
f. Paid for 50% of the renovation costs.
g. Bought salon equipment with cash.
h. Renovations completed. Balance payable within 30 days from actual
completion.
i. Purchased salon supplies with cash.
j. Provided services for cash.
k. Owner withdrew cash for personal use.
l. Paid for operating expenses.
m. Bought a commercial condominium near Paseo de Mandaue for future
expansion; 30% cash down, balance on bank loan.
n. Received cash for services that have been performed.
o. Paid part of the clean loan.

Required: Identify each of the above unrelated events as a source, use or

exchange of assets transaction. Some events may not be recordable under
current accounting practice. In this case, classify the events as not
applicable (n/a). Also, for each event, indicate whether total assets will
increase, decrease or remain unchanged.

Type of Event Effect on Total Assets

a Source of Assets Increase
.
b
.
c
.
d
.
e
.
f
.
g
.
h
.
i
.
j
.
k
.
l
.
m
.
n
.
o
.

Problem #11
Recording Transactions in a Financial Transaction Worksheet

Nelson Daganta formed the Liceo Signages on Oct. 1, 2019. He deposited P

250,000 in GE Money Bank under the name of the new business entity. During the
month of October 2019, the following transactions occurred:

Oct. 2 Acquired a service vehicle in the amount of P195,000 on account.

3 Acquired supplies for cash, P57,000.
9 Received P87,500 cash for signs painted.
10 Paid the month's rent, P25,000.
11 Painted signs for Cagayan Mobile on account, P170,000.
12 Paid P55,000 on account from Oct. 2.
16 Withdrew P25,000 for personal use.
23 Collected P35,000 from Cagayan Mobile.
27 Paid salaries of P57,000 for the month.
30 Paid BayanTel P7,500 for communication services for the month.
31 Paid a bill from AdAsia for P5,500 Of advertising for the month.

Required: Establish the following accounts in a financial transaction

worksheet: Cash; Accounts Receivable; Supplies; Service Vehicle; Accounts
Payable; and Daganta, Capital. Record in the worksheet the transactions listed
above.

Problem #12
Recording Transactions in a Financial Transaction Worksheet

Stephanie Calamba is the owner of the Calamba Repairs Specialist. On Jan. 1,

2020, the assets, liabilities and proprietor's capital of the business were:
Cash, P25,000; Accounts Receivable, P4,000; Supplies, P5,000; Equipment,
P60,000; Accounts Payable, P9,000; Calamba, Capital, P85,000. The transactions
for the month Of January were as follows:

Cash + Accounts + Supplie + Equipmen = Account Calamba,

Receivabl s t s Capital
Jan. 1 e Payable
Balanc P25,000 + + + = + P85,000
e P4,000 P5,000 P60,000 P9,000
a. _______ ________ _______ ________ _______ ________
_ _ _
b. _______ ________ _______ ________ _______ ________
_ _ _
c. _______ ________ _______ ________ _______ ________
_ _ _
d. _______ ________ _______ ________ _______ ________
_ _ _
e. _______ ________ _______ ________ _______ ________
_ _ _
f. _______ ________ _______ ________ _______ ________
_ _ _
g. _______ ________ _______ ________ _______ ________
_ _ _
h. _______ ________ _______ ________ _______ ________
_ _ _
i. _______ ________ _______ ________ _______ ________
_ _ _

a. Aid P3,000 the outstanding accounts payable.

b. Received P1,000 on account (part payment) from customers.
c. Purchased P2,500 worth of supplies on account (on credit).
d. Returned a defective piece of equipment that was purchased last month
and received a cash refund Of P12,000.
e. Borrowed P10,000 from a supplier, to repay the loan in 30 days.
f. Paid creditor P2,000on account (part payment).
g. Purchased equipment for P10,000, giving P2,000 cash and promising to pay
the balance in 60 days.
h. Bought supplies, paying P1,650 cash.
i. Received a P2,500 check from customer on account.

Required: Record the transactions using a financial transaction worksheet.

Problem #13
Recording Transactions in a Financial Transaction Worksheet

Ludivinia Victorino, a veteran photographer, opened a studio for her

professional practice on July 1. Transactions completed during the month
follow:

a. Deposited P146,200 in a bank account in the name of the business,

Victorino PhotoProfiles.
b. Bought new photography equipment on account from Canon Equipment,
P71,210.
c. Invested personal photography equipment into the business, P51,620.
d. Paid office rent for the month, P5,500.
 e. Bought photography supplies for cash, P7,960.
f. Paid premium for insurance cover on photography equipment, P1,240.
g. Received P8,960 as professional fees for services rendered.
h. Paid salary of .part-time assistant, P6,000.
i. Received and paid bill for telephone service, P640.
j. Paid Canon Equipment part of the amount owed on the purchase of
photography equipment, P4,200.
k. Received P15,480 as professional fees for services rendered.
l. Paid for minor repairs to photography equipment, P760.
m. Victorino withdrew cash for personal use, P9,600.

Required: Record the transactions for, the month of July 2019 using a
financial transaction worksheet. Use the following accounts: Cash; Accounts
Receivable; Supplies; Prepaid Insurance; Photography Equipment; Accounts
Payable; and Victorino, Capital. If the owner's equity account is affected by
a transaction, identify it as revenue, expense investment or withdrawal.

Problem #14
Recording Transactions a Financial Transaction Worksheet

On Mar. 1, 2019, Froilan Labausa established Labausa Catering Service.

Transactions completed during the month are as follows:

a. Labausa deposited P165,000 in a bank account in the name of the

business.
b. Bought a service vehicle from Elpidio Motors for P194,900, paying
P25,000 in cash and placing the balance on account.
c. Bought catering equipment on account from Quirino Equipment, P28,500.
d. Paid rent for the month, P6,200.
e. Rendered catering services for cash for the first half of month,
P24,200.
f. Bought supplies for cash, P1,800.
g. Bought insurance for the service Vehicle for one year, P4,000.
h. Received and paid the utilities bill, P6,040.
i. Received a bill from Manila Gas for gas and oil used by the service
vehicle for the month, P6,080.
j. Rendered catering services on account, P28,240.
k. Performed catering services for cash for the remainder Of the P25,200.
l. Paid salaries of the part-time assistants, P11,200.
m. Labausa withdrew cash for personal use, P15,500.

Required: Record the transactions for the month of March 2019 using a
Worksheet. Use the following accounts: Cash; Accounts Receivable; Prepaid
Insurance; Service Vehicle; Equipment; Accounts Payable; and Labausa, Capital.
If owner’s equity account is affected by a transaction, identify it as
revenue, expense, investment or withdrawal.

Problem #15
Transaction Analysis

Transactions:

a. Received P260,000 cash from clients for services rendered.

b. Paid P480,000 of salaries to employees.
c. Collected P120,000 from clients on account.
d. The owner, Virginia Ruben, withdrew P80,000 cash for personal use.
 e. Purchased P140,000 Of supplies on account.
f. Billed clients P180,000 for services rendered.
g. Paid P100,000 to suppliers on account.

For each of the transactions for Virginia Ruben Antique Restorer, a sole
proprietorship, fill in the spaces to answer the following questions:

1. What are the two accounts affected by the transaction?

2. What type of account is affected—asset, liability, owner's capital,
owner's withdrawal, income or expense account?
3. Should the account be increased or decreased?
4. Should the account be debited or credited?

Trans. Accounts Type of Increase or Debit or

Affected Account Decrease Credit
a. 1. _______________ _______________ _______________ _______________
2. _______________ _______________ _______________ _______________
b. 1. _______________ _______________ _______________ _______________
2. _______________ _______________ _______________ _______________
c. 1. _______________ _______________ _______________ _______________
2. _______________ _______________ _______________ _______________
d. 1. _______________ _______________ _______________ _______________
2. _______________ _______________ _______________ _______________
e. 1. _______________ _______________ _______________ _______________
2. _______________ _______________ _______________ _______________
f. 1. _______________ _______________ _______________ _______________
2. _______________ _______________ _______________ _______________
g. 1. _______________ _______________ _______________ _______________
2. _______________ _______________ _______________ _______________

Problem #16
Recording Transactions in a Financial Transaction Worksheet

Pio Baconga started Baconga Industrial Spray Service on Apr. 1, 2019. During
April, Baconga completed the following transactions:

a. Invested cash in the business, P60,000.

b. Bought a service vehicle from CDO Motors for P112,500, paying P22,500 in
cash, with the remainder due in thirty days.
c. Bought spray equipment on account from Misamis Farm Supplies, P18,000.
d. Paid rent for the month, P5,600.
e. Paid cash for insurance on service vehicle for the year, P5,760.
f. Received cash for spray services done on a building, P21,750.
g. Bought supplies for cash, P5,730.
h. Billed customers on account for services performed, P4,440.
i. Paid cash for utilities, P960.
j. Received bill for gasoline used by the service vehicle during the month,
P3,270.
k. Receipts from cash customers, P16,420.
l. Baconga withdrew cash for personal use, PIO,500.
m. Paid salaries to employees, P20,400.

Required: Record the transactions for the month of April 2019 using a
financial transaction worksheet. Use the following accounts: Cash; Accounts
Receivable; Supplies; Prepaid Insurance; Spray Equipment; Service Vehicle;
Accounts Payable; and Baconga, Capital. If the owner's equity account is
affected by a transaction, identify it as revenue, expense, investment or
withdrawal.

Problem #17
Recording Transactions in a Financial Transaction Worksheet

On June 1, 2019, Teofila Albay, Optometrist, established the Albay Eye Clinic.
Transactions completed during the month are as follows:

a. Albay deposited P200,000 in a bank account in the name of the business.

b. Paid office rent for the month, P8,400.
c. Bought supplies for cash, P7,750.
d. Bought Office equipment on account from Dagupan Equipment, P91,800.
e. Bought a computer from Del Rosario Office Outfitters, P18,400, paying
P6,000 in cash and the balance on account.
f. Performed professional services for cash, P24,210.
g. Paid accounts to Del Rosario Office Outfitters, P9,000.
h. Received and paid the bill for utilities, P2,430.
i. Paid salaries of the part-time assistants, P9,900.
j. Performed professional services for cash, P25,150.
k. Albay Withdrew cash for personal use, P12,500.

Required: Record the transactions for the month of June 2019 using a financial
transaction worksheet. Use the following accounts: Cash; Accounts Receivable;
Office Equipment Accounts Payable; and Albay, Capital. If the owner's equity
account is affected by a transaction, identify it as revenue, expense,
investment or withdrawal.

Problem #18
Recording Transactions in T-Accounts

Remedios Palaganas is an experienced events planner. The transactions and

accounts for the business are as follows:

a. Invested P100,000 in cash to start her own business.

b. Paid P5,000 for one month's rent.
c. Bought Office furniture for P15,000 in cash.
d. Received delivery of laptop computer, P54,000. Paid 50% down, balance
due in 30 days.
e. Performed services for P12,000 in cash.
f. Performed services for PIO,800 on credit.
g. Acquired a fax machine for P7,500; paid P3,000 in cash, balance due in
10 days.
h. Received P5,400 from clients on account.
i. Paid P1O,000 for salaries.
j. Settled in full the P4,500 balance for the fax machine.
k. Received P7,000 in cash for services performed.
l. Performed services for P12,000 on credit.
m. Paid P1,350 for the monthly telephone bill.
n. Paid P2,400 for the electric and water bills.
o. Collected P2,000 from clients on account.
p. Palaganas withdrew P7,000 in cash for personal expenses.

Required:
 1. With the aid of T-accounts, record the transactions listed above. Use
the following accounts: Cash; Accounts Receivable; Office Furniture;
Office Equipment; Accounts Payable; Palaganas, Capital; Palaganas,
Withdrawals; Consulting Revenues; Salaries Expense; Rent Expense;
Utilities Expense and Miscellaneous Expense.
2. Determine the balances of the T-accounts.

Problem #19
Recording Transactions in T-Accounts

The accounts and transactions Of Evelyn Tria, Systems Consultant, are shown
below:

a. Invested P150,000 in cash to start the business.

b. Paid P7,500 for one month's rent.
c. Bought Office furniture for P26,000 in cash.
d. Performed services for P1O,500 in cash.
e. Performed services for P12,750 on credit.
f. Bought a desktop computer for P55,000; paid 50% down, balance in 30
days.
g. Acquired a personal copier for P39,500 on credit; paid P9,500 cash,
balance due in 30 days.
h. Received P7,000 from credit clients.
i. Bought additional office chairs for P8,000 On credit.
j. Issued a check for P32,500 to pay for salaries.
k. Performed services for P1O,250 in cash.
l. Performed services for P11,500 on credit.
m. Collected P6,000 on accounts receivable.
n. Issued a Check for P4,000 in partial payment of the amount owed for
office chairs.
o. Paid P2,250 for the monthly telephone bill.
p. Paid P2,500 for the monthly electric bill.
q. Tria withdrew P1O,000 in cash for personal expenses.

Required:
1. With the aid of T-accounts, record the transactions listed above. Use the
following accounts: Cash; Accounts Receivable; Office Furniture; Office
Equipment; Accounts Payable; Tria, Capital; Tria, Withdrawals; Consulting
Revenues; Salaries Expense; Rent Expense; Utilities Expense and Miscellaneous
Expense.
2. Determine the balances of the T-accounts.

Problem #20
Recording Transactions In T-Accounts

Julieta Dillena established a proprietorship, The Professional Shoppers. The

business charges a fee based on the amount of research done to support a cost-
effective purchase decision and the actual shopping time required. Dillena
with the help of her "professional shoppers" will shop for almost anything
from corporate giveaways, computers to office and home furnishings.
Business is particularly heavy around Christmas and in early summer. The
business operates from a rented Office condominium unit. The shoppers receive
a commission based on the revenues they produce and a transportation allowance
for the use of their personal vehicles for shopping trips. The following
transactions are for December 2019:

a. Dillena invested P300,000 in the business.

b. Acquired office equipment for P100,000. Dillena paid P20,000 in cash and
promised to pay the balance equally every end of the month.
c. Paid rent for December, P5,000.
d. Provided shopping services for corporate accounts, P52,000.
e. Paid telephone bill, P900.
f. Borrowed cash from the bank by signing a note payable, P50,000.
g. Bought a computer for office use, P48,000 cash.
h. Collected cash from clients for services performed on account, P40,000.
i. Paid commissions to shoppers for revenues generated during the first
half of the month, P18,200.
j. Paid electricity bill, P6,000.
k. Earned shopping revenues Of P132,000: cash, P72,000 on account.
l. Paid shoppers' commissions for last half of month, P46,200.
m. Paid transportation allowances for the month, P15,000.
n. Paid P1O,000 on note payable to bank.
o. Paid cash on account for the office equipment purchased in transaction
(b), P20,000.
p. Dillena withdrew P20,000 for personal use.

Required:
1. Record the transactions using T-accounts. Use the accounting equation as a
guide for setting up the T-accounts. The following accounts will be needed:
Cash; Accounts Receivable; Office Equipment; Notes payable; Accounts payable;
Dillena, Capital; Dillena, Withdrawals; Shopping Revenues; Commissions
Expense; Transportation Expense; Rent Expense and Utilities Expense.
2. Determine the balances of the T-accounts.

Problem #21
Identification of Errors

On Sept. 1, 2019, Christopher Abelinde established Abelinde Delivery Service.

During the month, the entity had the following transactions:

a. Christopher Abelinde invested P240,000 in the business (increase Cash;

Abelinde, Capital).
b. Bought two used delivery vans from The Van Lot for P200,000 and paid
P50,000 as a down payment (increase Delivery Equipment, P200,000;
decrease Cash, P50,000; increase Accounts Payable, P150,000).
c. Received P25,000 in cash for delivery services (increase Cash; increase
Delivery Revenues).
d. Received bill from Bicol News for advertising, P3,500 (increase
Advertising Expense; decrease Cash).
e. Billed Naga Surgical Supply for delivery services provided, P6,200
(increase Accounts Receivable; increase Delivery Revenues).
f. Received and paid telephone bill, P1,000 (decrease Cash; decrease
Telephone Expense).
g. Abelinde invested in his business office equipment having a fair market
value of P9,600 (increase Office Equipment; decrease Cash).
h. Received and paid bill for gas and oil, P1,500 (decrease Cash; increase
Maintenance Expense).
i. Paid P3,500 to Bicol News to pay account in full (increase Advertising
Expense; increase Cash).
 j. Received P29,000 cash for delivery services performed (increase Cash;
increase Delivery Revenues).
k. Abelinde withdrew P11,000 for personal use (decrease Cash; increase
Salaries Expense).
l. Received P4,000 from Naga Surgical Supply to apply on account (increase
Cash; increase Delivery Revenues).
m. Paid salaries to part-time employee, P8,000 (increase Salaries Expense;
decrease Cash).

Required: Find six errors that were made in recording the transactions, and
State how they Should have been recorded.