FUNDAMENTALS OF ACCOUNTING

BASIC ACCOUTING
EQUATION
FUNDAMENTALS OF ACCOUNTING
FUNDAMENTALS OF ACCOUTING
 CHART OF ACCOUNTS
ASSETS
• CASH
• ACCOUNTS RECEIVABLE
• ALLOWANCE FOR DOUBTFUL ACCOUNTS
• NOTES RECEIVABLE
• INTEREST RECEIVABLE
• UNUSED SUPPLIES
• PREPAID RENT
• EQUIPMENT
• ACCUMULATED DEPRECIATION
 CHART OF ACCOUNTS
• FURNITURE AND FIXTURES
• ACCUMULATED DEPRECIATION
• OTHER ASSETS
LIABILITIES
• ACCOUNTS PAYABLE
• NOTES PAYABLE
• SALARIES PAYABLE
• INCOME TAX PAYABLE
• INTEREST PAYABLE
 CHART OF ACCOUNTS
• UNEARNED REVENUES
• MORTGAGE PAYABLE
• LOAN PAYABLE
• OTHER LIABILITIES
 CHART OF ACCOUNTS
OWNER’S EQUITY
• MERCADO, CAPITAL
• MERCADO, DRAWER
• INCOME SUMMARY
REVENUES
• PHOTOCOPYING REVENUES
• INTEREST INCOME
• OTHER INCOME
 CHART OF ACCOUNTS
EXPENSES
• TAX AND LICENSES
• SALARIES EXPENSES
• SUPPLIES EXPENSES
• UTILITIES EXPENSES
• RENT EXPENSES
• DEPRECIATION EXPENSES
• DOUBTFUL ACCOUNTS EXPENSE
• INTEREST EXPENSE
 ACTIVITY 1
KNOWING YOU BETTER
MAJOR ACCOUNT DEFINITION CLASSIFICATION EXAMPLES
 ACTIVITY 2
YOU MADE ME COMPLETE
SITUATION ASSETS LIABILITIES OWNER'S EQUITY

A 150,000 135,000 ?

B 255,000 ? 35,000

C ? 68,000 32,000

D 195,000 135,000 ?

E 325,000 ? 125,500
LET'S SHARE!
How did you find the activity?

How did you compute the missing

amount in the table?

Give the equation you used to come

up with the correct amount?
 Activity 4: SUM ME UP
(Group Activity)
• The total Cash payments made by the business during the first year
of operation amounted Php 950,000.
• a. Purchase equipment for the business Php 500,000
• b. Purchase of delivery truck for the business Php 200,000
• c. Salaries of the employees, Php 75,000
• d. Water and electricity used in the business, Php 25,000
• e. Taxes and licenses of the business, Php 30,000
• f. Paid rent of the office building for two years, Php 120,000
(paid at the start of the year)
• Based on the available information, how much is the total
expenses of the business in its first year of
• operation?
 QUESTIONS :
WHAT IS BASIC ACCOUNTING
EQUATION?
HOW DOES THE BASIC ACCOUNTING
EQUATION WORK ?
DOES THE BASIC ACCOUNTING
EQUATION HAVE TO BE BALANCE AT ALL
TIMES? WHY ?
WHAT ARE THE TYPES OF MAJOR
ACCOUNTS?
A portion of financial statements dated December 31, 2018 with the following

Accounts and balances were gathered from 3mp’s Photocopy.

Accounts Payable Php 25,000

Accounts Receivable Php 52,400

Accumulated depreciation – Building Php 18,500

Building Php 200,000

Cash Php 37,700

Depreciation Expenses Php 18,000

Interest Income Php 1,680

Interest Receivable Php 1,680

Load Php 50,000

Mortgage Payable Php 15,600

Notes Payable Php 19,800

Notes Receivable Php 14,000

Office Supplies Php 13,000

Supplies Expense Php 9,900

Taxes and Licenses Php 22,800

Utilities Expense Php 22,800

 REMEMBER :
LIFE IS LIKE A DOUBLE ENTRY
ACCOUNTING, EVERYTHING MUST BE
BALANCED.