TEST I: Under the column “ELEMENT” write the appropriate basic element of the financial statements.

In
the last column, write the proper action (i.e., DEBIT / CREDIT) to be taken given the effect provided in the
column “EFFECT”. Both requirements must be met for the point to be credited; otherwise no point will be
given..

Chart of Accounts Elements Effect Debit/Credit

1 Cash Assets Decrease Credit
2 Accounts receivable Assets Decrease Credit
3 Allowance for doubtful accounts Assets Increase Credit
4 Prepaid rent Assets Decrease Credit
5 Supplies Assets Decrease Credit
6 Inventory Assets Decrease Credit
7 Office equipment Assets Decrease Credit
8 Accumulated depreciation Assets Increase Credit
9 Land Assets Decrease Credit
10 Accounts payable Liability Increase Credit
11 Unearned service revenue Liability Increase Credit
12 Salaries Payable Liability Increase Credit
13 Utilities Payable Liability Increase Credit
14 Note Payable Liability Increase Credit
15 Capital Equity Increase Credit
16 Drawing Equity Decrease Credit
17 Depreciation Expense Expense Decrease Credit
18 Bad Debts Expense Expense Decrease Credit
19 Salaries Expense Expense Decrease Credit
20 Utilities expense Expense Decrease Credit
21 Purchases Expense Decrease Credit
22 Supplies Expense Expense Decrease Credit
23 Service revenue Income Increase Credit
24 Sales Revenue Income Increase Credit
25 Gain on sale of equipment Income Increase Credit
TEST II: Using the chart of accounts in Test I and assuming the use of “Calendar Period”, Journalize the
following transactions assuming further, that the business renders services and at the same time sells
goods as its ordinary courses of business. If there’s no entry to be recorded, write “No Entry”. Continue
the Accounting Cycle up to Unadjusted Trial Balance.

26 to 27.) November 1, 2019 Jonah, an accountant established his dual-purpose business – an

accounting service business and trading of office supplies. He named his business “Manintunan
Masalese & Associates”.
No entry

28 to 29.) November 1, Jonah contributed 150,000 for starting the business and laptop worth 25,000
which could stillbe used for another 3 years and after which; it could be sold for 1,000 only.
Nov. 1 Cash 150,000
Equipment 25,0000
Capital 175,000
30 to 31.) November 1, he got a client who agreed on a monthly fee of 20,000. Right away, the client
paid 240,000 as advances for the services to be rendered.
Nov. 1 Cash 240,000
Unearned Service 240,000
32 to 33.) November 3, he bought office supplies to be sold worth 10,000 on account.
Nov. 3 Inventory 10,000 Purchases 10,000
Accounts payable 10,000 Accounts payable 10,000
Perpetual Periodic
34 to 35.) November 5, sold 3,000 worth of supplies for 4,500.
Nov. 5 Cash 4,500 Cash 4,500
Sales 4,500 Sales 4,500
Cogs 3,000
Inventory 3,000
36 to 37.) At the end of November, he paid the electricity, water, and communication bills worth 2,500
in total.
Nov. 30 Utilities Expense 2,500
Cash 2,500
38 to 39.) December 2, he bought office supplies to be used in the office worth 3,000.
Dec. 2 Supplies 3,000
Cash 3,000
40 to 41.) December 31, another client paid a full month payment of 15,000 for the services rendered
from Dec 1 to 31.
Dec. 31 Cash 15,000
Service Revenue 15,000
42 to 43.) December 31, he billed another client for services rendered from Dec 1 to 31 for 20,000.
Dec.31 Accounts Receivable 20,000
Service Revenue 12,000
44 to 45.) December 31, Jonah withdrew 7,000 from the business coffers which he will use for his
vacation trip in the next barangay.
Dec. 31 Jonah, Drawing 7,000
Cash 7,000
 TEST III: Provide first the entry needed for the recording of the transaction, and then make the necessary
adjusting entries, if any, at the end of the reporting period, for the following independent cases using the
perspective of the business. Assume the use of Calendar Year. Use only accounts provided in the chart of
accounts below.

Chart of Accounts
Service Revenue Allowance for Bad debts Prepaid Rent Salaries Payable
Cash Unearned Service Revenue Rent Expense Building
Bad Debts Expense Land Accounts Receivable Cash
Salaries Expense Accumulated Depreciation Sales Revenue Accounts Payable

71 to 75.) June 1, 2017 the business paid 24,000 for a whole year’s rent payment.
Date Particulars Debit Credit
June 1 Rent Expense 24,000
Cash 24,000

Dec 31 Rent Expense 14,000

Rent Payable 14,000

76 to 80.) The business hired an employee on December 1, 2017. She was offered a semi-monthly salary
of 8,000. The month is divided into two cutoff dates. The first cutoff starts from 1st to 15th and the
other, 16th to the end of month. Payment for each cutoff is made 3 days after the end of the cutoff.
Date Particulars Debit Credit
Dec 18 Salaries expense 8,000
Cash 8,000

Dec 31 Salaries Expense 8,000

Salaries Payable 8,000

81 to 85.) March 1, 2017 a client paid the business 102,000 for a 1-year service contract for the provision
of accounting services of the latter to the former.
Date Particulars Debit Credit
March 1 Cash 102,000
Unearned Service Revenue 102,000

Dec 31 Unearned Service Revenue 85,000

Service Revenue 85,000
86 to 90.) November 1, 2017 Snoopy got a client who agreed to pay 18,000 per month for services to be
rendered starting today but the 18,000 will be paid 10 days after the end of every month in which the
services were performed.
Date Particulars Debit Credit
Nov 1 Cash 18,000
Service Revenue 18,000

Dec 31 Accounts Receivable 18,000

Service Revenue 18,000

91 to 95.) January 1, 2017 the business bought a land to be used for business expansion for 26,000,000.
The land has a useful life of 25 years and a residual value of 1,000,000.
Date Particulars Debit Credit
Jan 1 Land 26,000,000
Cash 26,000,000

Dec 31 No Entry No Entry

No Entry No Entry

96 to 100.) September 1, 2017 Johnson, a trader of laptop, sold 3 units (which costs him 20,000 each) for
30,000/unit on account. The accounts are still unpaid. And at the end of the reporting period, it was
estimated that half of these accounts are uncollectible.
Date Particulars Debit Credit
Sept 1 Accounts Receivable 90,000
Sales Revenue 90,000

Dec 31 Bad Debts Expense 45,000

Allowance for Bad debts 45,000