Journalizing

Journalizing

by Elizabeth Salvador

​Guide in the preparation of Journal entries

​1. Analyze the effects of the transaction in the accounting elements

​ (Assets, Liabilities, Equity)

​2. Identify the specific accounting element (account name/title)

​3. Apply the rules on debits and credits

• ​debit increase in assets, and credit decrease in assets

• ​credit increase in liabilities, and debit decrease in liabilities

• ​credit increase in equity, and debit decrease in equity

​ credit investment of the owner

​ debit drawings made by the owner

​ credit increase in revenue

​ debit expenses

​

​

Multiple Choice

The owner Rica,  invested cash of P200,000 and equipment worth P300,000 of which 50% is still unpaid.  The unpaid balance will be assume by the business.

What is the correct entry to record this transaction?

• Debit cash P200,000, debit equipment, P300,000 and credit Rica, Capital P500,000

• Debit cash P200,000, debit equipment 150,000,and credit Rica, Capital P350,000

• Debit cash P200,000, debit Equipment P300,000,  credit accounts payable P150,000 , and credit Rica Capital P 350,000

• Debit cash P200,000, debit equipment P300,000, credit Rica, Capital P200,000 and accounts payable P300,000

Fill in the Blanks

Purchased a used van for deliveries for P500,000 by paying 50% in cash and signed a two-year promissory note for the balance.   The entry to record this transaction is

Debit Delivery equipment  P500,000

                Credit Cash                                           250,000

                Credit 

         250,000

Fill in the Blanks

Received P150,000 cash from a customer for services rendered. The entry to record the transaction is

Debit Cash   150,000

                Credit 

         150,000