FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND MANAGEMENT 1
Name of Learner: _______________________________________ Grade Level: ____________________
Section: ________________________________________ Date: _________________________________
LEARNING ACTIVITY SHEET (Q3)
Illustrating Books of Accounts
I. Background Information for Learners
In a single day, a company engages in hundreds and thousands of business transactions. Some
of these include cash, payment of expenses, acquisition of equipment, and many more. A company
should be able to collect and process financial information in order to summarize them at year-end and
to be able to prepare its annual financial statements for its internal and external users.
To keep track of its transactions more efficiently, companies keep and maintain a set of books of
accounts. These books of accounts are typically a journal and a ledger or their equivalents such as
subsidiary ledgers and simplified books of accounts. This chapter discusses the major types of books of
accounts which are journals and ledgers.
CONTENT
II. LEARNING COMPETENCIES
a. Illustrate the format of general and special journals. (ABM_FABM11-IIIf-23)
b. Illustrate the format of a general and subsidiary ledger. (ABM_FABM11-IIIf-24)
JOURNAL
A journal functions as a financial diary. It is used to record chronologically all transactions of a
business as they occur. Since it provides the first evidence of a formally-recorded transaction, it is
commonly referred to as the book of original entry. There are two types of journals: (1) the special
journals and (2) the general journal
GENERAL JOURNAL
Most businesses, especially large companies, may adopt different kinds of journals but all business
organizations use the most basic type of journal which is the general journal. The general journal
typically displays the transaction’s date, account titles and explanations, references, and respective
amounts of corresponding accounts. A sample format of a journal is shown as follows.
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A sample format of a journal is shown as follows.
SPECIAL JOURNALS
Special journals are journals used to record recurring transactions. There are four common
types of special journals, namely: (1) sales journal; (2) purchases journal; (3) cash receipts journal; and
(4) cash disbursements journal.
Special Journal Purpose
Sales Journal Used in journalizing all sales of merchandise on account
Cash Receipts Journal Used in journalizing all cash received( including cash sales)
Purchases Journal Used in journalizing all purchases of merchandise on
account
Cash Payments Journal Used in journalizing all cash paid (including cash purchases
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IILUSTRATIVE EXAMPLE
Samples for each of the special journals are illustrated as follows.
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LEDGER
Ledger refers to the accounting book in which the accounts and their related amounts as
recorded in the journal are posted periodically. This book is known as the “book of the final entry”
because the balance of accounts in the ledger is used to prepare financial statements. There are two
kinds of ledgers: general ledger and subsidiary ledgers.
GENERAL LEDGER
A general ledger is a grouping of all accounts used in preparing the financial statements. Unlike
journals that are arranged chronologically (regardless of the accounts), the ledgers are usually group
according to their chart of accounts and arranged according to the order on how they appear on the
financial statements, starting from the asset accounts, followed by the liability accounts, and finally, the
equity accounts including the revenues and expenses accounts as shown in the figure. Each account is
numbered based on the chart of accounts for easier and faster reference. The general ledger shows the
amount outstanding on each of the company’s accounts as of a certain date.
ASSET ACCOUNTS LIABILITY ACCOUNTS OWNER’S EQUITY
ACCOUNTS
Accounts Interest Shane Drawing
Receivable Payable
Cash Accounts Shane Capital
Payable
Sample Format of a General Ledger is illustrated as follows.
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SUBSIDIARY LEDGERS
Large companies have thousands of transactions from their hundreds of customers who buy
goods and merchandise on credit. If the company only utilizes a general ledger, imagine the time it will
take to determine the outstanding balances of each of its individual customers. The same is true when it
comes to the company’s individual creditors.
To ease their burden, large companies use subsidiary ledgers. A subsidiary ledger is a group of
accounts with a similar characteristic (example accounts receivable and accounts payable. The
relationship of a subsidiary ledger with the general ledger is described as follows.
GENERAL
LEDGER Cash Accounts Accounts Revenues Expenses
Receivable Payable
SUBSIDIARY
LEDGERS
Customer Customer Creditor X Creditor Y
A B
The most common types of subsidiary ledgers are the accounts receivable ledger and the
accounts payable ledger. The accounts receivable ledger is used mainly to track the individual account
balances of the company’s customers.
Samples of the accounts Receivable ledger and accounts payable ledger are illustrated as follows.
A. Accounts Receivable Subsidiary Ledger
The format of an accounts receivable subsidiary ledger is the same as that of the general ledger.
The only difference is that the accounts receivable subsidiary ledger provides a running balance of each
of the company’s customer’s on credit.
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B. Accounts Payable Subsidiary Ledger
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III. Activities
Activity 1.
Identification. Identify the term/s being described.
1. This is a journal used to record all cash receipts from whatever source.
2. This is a journal used to record all other transactions which cannot be recorded in a special journal.
3. This is also known as the book of original entry.
4. This is a journal used to record recurring transactions.
5. This is also known as the book of final entry.
Activity 2
Direction: From the table below choose the word/s that correspond/s to the appropriate column of a
format of a general journal and general ledger. Post it to the format of a general journal (A) and general
ledger (B.)
Debit Post Reference
Credit Description
Account Name Page Number
Date Account Number
Balance
A. General Journal
(1)
(2) (3) (4) (5) (6)
B. General Ledger
(1) (2)
(10)
(3) (4) (5) (6) (7) (8) (9)
Activity 3.
Direction: From the given general ledger below, find for the erroneous posting of the items in a specific
column. Arrange them to illustrate the format of general ledger accurately.
Account Account Name
No.(1) (2)
Balance(10)
Date Description PR Credit Debit Credit Debit
(3) (4) (5) (6) (7) (8) (9)
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IV. Reflection
Rate yourself. For each parameter, please put a (/) check on the emotion that shows how much
you understand the lesson.
PARAMETERS
1. I can illustrate the format of general and special journals.
Good Really Brilliant
Good
2. I can illustrate the format of general and subsidiary
Good Really Brilliant
Good
V. References
Tugas, F. (2016). Fundamentals of Accountancy, Business, and Management 1. Quezon City: Vibal
Group, Inc.
Florendo, J. (2016). Fundamentals of Accountancy, Business, and Management 1. Manila: Rex Book
Store.
Valencia, E. G. (2009). Basic Accounting. Baguio City: Valencia Educational Supply.
Pasion, D. (2000). Introductory Accounting. Quezon City: Phoenix Publishing House.
https://www.bing.com/images/search?view=detailV2&ccid=KoRLQsOW&id
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LEARNING ACTIVITY SHEETS ANSWER KEY
Activity 1. Identification
1. Cash receipts journal
2. General journal
3. Journal
4. Special journals
5. Ledger
Activity 2
A. 1.) Page no. 2.) Date 3.) Description 4.) PR 5.) Debit 6.) Credit
B. 1. Account Name 6. Debit
2. Account Number 7. Credit
3. Date 8. Debit
4. Description 9. Credit
5. Post Reference 10. Balance
ACTIVITY 3
Account Account No.
Name(1) (2)
Balance(10)
Date Description PR Debit Credit Debit Credit
(3) (4) (5) (6) (7) (8) (9)
Prepared by:
EDNA B. LOSITANO, MBA
Writer (SDNHS)
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