Blogger Enterprise
|
|||||
TRIAL BALANCE
|
|||||
December 31, 2011
|
|||||
ACCOUNTS
|
DEBIT
|
CREDIT
|
|||
Cash
|
40,100
|
||||
Office
Equipment
|
21,500
|
||||
Accounts
Payable
|
5,700
|
||||
Blogger,
Capital
|
57,800
|
||||
Blogger,
Drawing
|
8,400
|
||||
Fees
Earned
|
46,350
|
||||
Salary
Expense
|
18,000
|
||||
Rent
Expense
|
13,250
|
||||
Communication
Expense
|
2,150
|
||||
Utilities
Expense
|
2,900
|
||||
Supplies
Expense
|
1,350
|
||||
Taxes
and Licenses
|
1,200
|
||||
Miscellaneous
Expense
|
1,000
|
||||
109,850
|
109,850
|
||||
Order in the court: The Trial Balance
Now there's the rub. We have been used to the saying that "the accounts must be balanced". Yes it's true, we have to balance the accounts, but what particularly? Hey, we have the debit and the credit as what someone would say. We have heard the trial balance and that is particularly one of the tools to determine whether the debits and credits of what we posted on the ledgers are correct (although it may not be true always that there's no error if the trial balance is balance). To those persons who are not yet familiar with the trial balance try to look at our example:
MPE, Masters in Proforma Entries
If you are a master in proforma entries, you do not have to worry in preparing journal entries for your quiz or exam on your accounting subject.
Here is an example:
August 1, Owner invested cash in the business.
DR CR
Cash xxx
Capital xxx
Capital xxx
This entry is recorded whenever the owner of the business invests cash in the business. Going back to our discussion on the normal balances of the account, we should remember the techniques.
How to Make a Simple Financial Transaction Worksheet
Making a financial transaction worksheet is easy. You just have to know how to analyze transactions. The accounting equation, Asset = Liabilities + Equity, is very useful in analyzing transactions. You have to keep in mind that this equation should always be balanced.
I have prepared a sample problem involving the preparation of a financial transaction worksheet. I hope with this problem you could have an idea how recording transactions work.
The answer will be:
If you got this correctly, you have proven your skills on accounting. Congratulations!
Do the Alphabet ABCD... LMNOPQRST-Account
Of course, when we talk about accounting, we will never forget this topic, maybe because it’s kind a unique thing that letter T is used among the other letters of the alphabet.
A common question usually asked in a T-account – on what side will I put this amount? Debit or Credit? Left or Right?
First, we need to know the importance of T-Account. It is a very important tool in summarizing the transactions affecting a particular account. In most of the accounting subjects, like practical accounting 1&2 and auditing problems, this tool is very useful. For those who will be taking the CPA Board Examinations or CAT Examinations, you have to master the T-Account. Aside from saving time in using it, it requires only a little effort to think about how to solve problems involving computations.
Next, you have to understand the nature of the accounts. You also have to remember that debit is on the left side of the T-Account while credit is on the right side. Below is a T-Account which summarizes all the normal balances of the accounts (the side on which the account increases).
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The Journey to the Journal
“Can you lend me a piece of journal?” Your classmate would always tell you whenever you have an activity on journalizing. The following day the same scenario would happen and you’d give another journal. Until the end of the semester your seatmate would ask for a piece of journal. Can there be an end to this?
In the real world of accounting, if you are assigned in the accounting department, you really have to do a lot of journal entries per day, most especially in merchandizing and service type of business which have a lot of transactions during the day. If ever you get bored on doing journal entries, you should think twice and look on the brighter side of it.
So let’s review the parts of the journal. We have the date, the account titles and explanation, the posting reference, the debit column and the credit column. Once we have plotted the parts on the journal we are now ready in journalizing.
It will take time for you to master journalizing. You need to use sort of techniques to be expert on this:
CPA Review Centers in the Philippines
Here is the list of some of the leading CPA Review Centers in the Philippines. (in alphabetical order)
837 F. Cayco Street CPAR Bldg. Sampaloc Manila
2. CRC-ACE Review School, Inc.
3F C. VILLAROMAN BLDG. 873 P. CAMPA SAMPALOC, MANILA;
3. National Review Center (NRC)
C.M. Recto Ave. Manila
4. Professional Review Training Center (PRTC)
2044 C.M. Recto Ave. Manila
5. RESA Review School of Accountancy, Inc.
5F CMFFI Bldg. 815 R. Papa Street, Sampaloc Manila
Ways to Appreciate Accounting
Let us do accounting!
Well, some of us perhaps get too quickly upset or bored whenever accounting subjects come to get our way. It’s a normal thing but we never realize that in our everyday life we do some accounting of our expenses, how much is owed from us or how much we owe to our classmates or our co-workers or even to our parents and friends. Accounting may give you some headache but it does give you some benefits. Those people who have knowledge in accounting have more advantage over those people who know nothing about it.
I am giving you some of the ways to appreciate accounting.
1. If you are a business administration student and later on you will be applying for a job after your graduation, most businesses would require you to do accounting work. As the saying goes, “sacrifice is temporary but success is forever”. You should always remember that the sacrifices that you experience right now will pay off soon and studying accounting is sometimes an arduous task but you soon later on understand its importance. Be resourceful, read your accounting books, watch a youtube video or browse the accounting topics on the internet those which you are not familiar of.
2. Do not think so much of the difficulty of accounting, think on how you can solve that difficulty. We know that if we are focusing so much on the problem, we cannot really see a clearer view on how we can solve it. In accounting, whenever you are given a problem to solve, what you need to do is to go back to the basic accounting principles. The basic principles of accounting will be your guiding light. Review the revenue and expense recognition principle, historical cost principle, matching principle etc. (even the fundamental concepts such as periodicity, stable monetary unit concept and the entity concept.) If you are unfamiliar of these principles you may search the internet or get a book and remember their meaning.
3. Lastly, (this I consider as the best among the three), apply accounting to your real life. What if that accounting situation really happened to you? What would you do? Well, I personally, as a professor in accounting usually takes it as a technique in teaching my students the principles of accounting. I do not have a hard time in explaining to them once they can relate. And they can relate only when the same situation could happen to them on real life. That makes accounting interesting to them. Some say that if you really know something, you can be able to share it. You can begin sharing what you know to yourself first and you can do it by applying it into your own life.
Well, these are just suggestions which you can do in order for you to appreciate accounting.
You cannot appreciate something which is not familiar to you or you know nothing about.
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