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July 14, 2015

I. Identification (15)
1. It is an increase in economic benefit during the period that results in increase in owners
equity other than resulting from contributions of equity participants.
2. The consumption of asset and using up of a service.
3. Accounting principle which states that expenses are recognized in association with the
earnings of specific income items within a specific period of time.
4. It shows the revenues or income earned and expenses incurred.
5. Accounting principle which states that revenue is recognized when earned.
6. The Father of Accounting.
7. They are involved in handling and processing of various documents.
8. It results when revenue is higher than expenses.
9. It results when total expense is higher than revenue.
10. It is a present obligation arising from past events, the settlement of which will result to
an outflow of resources from the enterprise.
11. It represents a residual right or interest of the owner over the net assets of the
business.
12. These are resources owned and controlled by the company as a result of past event and
from which an economic benefit s are expected to flow to the enterprise.
13. It is where we can see various accounting information.
14. Accounting Equation
15. It represents the net assets of the business.
II. Application.
Journalize the transactions using the following account titles: Cash, Accounts Receivable,
Furniture and Fixtures, Service Equipment, Service Supplies, Accounts Payable, Loans
Payable, Mr. Gray, Capital , Mr. Gray, Drawings, Service Revenue , Taxes and Licenses,
Rent Expense and Salaries Expense. (30 pts)
Transaction #1: On December 1, 2014, Mr. Donald Gray started Gray Electronic Repair
Services by investing Php10,000.
Transaction #2: On December 5, Gray Electronic Repair Services paid registration and
licensing fees for the business, Php 370.
Transaction #3: On December 6, the company acquired tables, chairs, shelves, and other
fixtures for a total of Php 3,000. The entire amount was paid in cash.
Transaction #4: On December 7, the company acquired service equipment for Php16, 000.
The company paid a 50% down payment and the balance will be paid after 60 days.
Transaction #5: Also on December 7, Gray Electronic Repair Services purchased service
supplies on account amounting to Php 1,500.
Transaction #6: On December 9, the company received Php1,900 for services rendered.
Transaction #7: On December 12, the company rendered services on account, Php4,
250.00. As per agreement with the customer, the amount is to be collected after 10 days.
Transaction #8: On December 14, Mr. Gray invested an additional Php3, 200.00 into the
business.
Transaction #9: Rendered services to a big corporation on December 15. As per
agreement, the
Php 3,400 amount due will be collected after 30 days.
Transaction #10: On December 22, the company collected from the customer in
transaction #7.

Transaction #11: On December 23, the company paid some of its liability in transaction
#5 by issuing a check. The company paid Php 500 of the Php 1,500 payable.
Transaction #12: On December 25, the owner withdrew cash due to an emergency need.
Mr. Gray withdrew Php 7,000 from the company.
Transaction # 13: On December 29, the company paid rent for December, Php1,500.

Transaction #14: On December 30, the company acquired a Php12,000 short-term bank
loan; the entire amount plus a 10% interest is payable after 1 year.
Transaction #15: On December 31, the company paid salaries to its employees, Php3,500.