Accounting Principles and Concepts

During the year, you started a business of selling personalized mugs and T-shirts. You opened a separate bank account for the business and deposited your initialinvestment of ₱250,000 to this account.

The business acquired a printing machine. The regular selling price is ₱100,000; however, you were able to acquire it at a discounted price of ₱90,000. You will record the machine at its acquisition cost of ₱90,000 rather that the regular selling price

The business acquired initial inventory of mugs and T-shirts for a total cost of ₱50,000. You will record as an asset(i.e.) inventory rather than as expense.

All the inventory was sold on credit for ₱300,000 (‘sold on credit’ means ‘pinautang’). You will immediately record the credit sales as account receivable rather than waiting for them to be collected.

Also, you will now record the ₱50,000 cost of the inventory as expense.