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.

(a)  

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

(a)  

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.

(a)  

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.

(a)  

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

(a)