COLLEGE OF ACCOUNTANCY

Accounting 1(Accounting Equation & Analysis of Transactions)

Name ________________________ Course & Yr. __________ Schedule _______________ Score ________

A. On the space provided, indicate a check mark as to the effect on the balances of the following accounts.

Increased Decreased

Sample : Cash in Bank account was debited √____ _________

1. Notes Receivable account was debited ____√_____ _________

2. Accounts Payable account was debited _________ ____√_____
3. Meriam Narbarte, Capital account was credited ____√_____ _________
4. Rent Expense account was debited ____√_____ _________
5. Petty Cash Fund account was debited ____√_____ _________
6. Accounts Receivable account was debited ____√_____ _________
7. Meriam Narbarte, Drawing account was debited ____√_____ _________
8. Accounts Payable account was credited ____√_____ _________
9. Prepaid Insurance account was credited _________ ____√_____
10. Insurance Expense account was debited ____√_____ _________
11. Notes Payable account was debited _________ ____√_____
12. Accounts Receivable account was credited _________ ____√_____
13. Cash in Bank account was credited _________ ____√_____
14. Professional Income account was credited ____√_____ _________
15. Unearned Service Income was credited ____√_____ _________

B. On the space provided, indicate a √ on what has been done in each of the account which resulted to have increased or
decreased in its balance.
Debited_ Credited_

Sample : Cash in Bank account was increased by P2,000 √____ _________

1. Casiano Rebucas, Capital account increased by P1,500 _________ ___√______

2. Prepaid Insurance account decreased by P3,000 _________ ___√______
3. Accounts Receivable account increased by P300 ___√_____ _________
4. Accounts Payable account decreased by P750 ___√______ _________
5. Cash in Bank account decreased by P8,450 _________ ___√_____
6. Accounts Payable account increased by P10,050 _________ ___√______
7. Accounts Receivable account decreased by P500 _________ ___√______
8. Rent Expense account increased by P250 ___√______ _________
9. Service Income account increased by P700 _________ ___√_____
10. Salaries Expense account increased by P5,000 ___√______ _________
11. Notes Payable account increased by P9,750 _________ ___√______
12. Notes Receivable account decreased by P450 _________ ___√______
13. Building account increased by P45,000 ___√______ _________
14. Unused Supplies account decreased by P2,450 _________ ___√______
15. Casiano Rebucas, Drawing account increased by P800 ___√______ _________

C. Determine whether the cause of changes in the previous balances of the given accounts were due to “debits” or
“credits” to the said accounts. Place the amounts of changes on the space provided:
Previous New
Balance Debit _ Credit Balance

Sample: Cash on Hand P50,000 75,000_ ________ _125,000_

1. Khalyl, Dionne, Capital P525,000 ________ __150,000 675,000

2. Accounts Payable 350,000 _100,000_ _________ 250,000
3. Khalyl Dionne, Drawing 50,000 _25,000__ _________ 75,000
4. Transportaion Equipment 1,250,000 1,750,000_ _________ 3,000,000
5. Supplies Used 75,000 _15,000__ _________ 90,000
6. Notes Receivable 500,000 _100,000_ _________ 600,000
7. Accounts Receivable 400,000 _________ _100,000_ 300,000
8. Furniture and Fixtures 300,000 _150,000_ _________ 450,000
9. Transportation Expense 25,000 _35,000__ _________ 60,000
10. Accounts Payable 150,000 _________ _100,000__ 250,000
11. Accounts Receivable 250,000 _150,000_ _________ 400,000
12. Notes Receivable 350,000 ___-______ ___-______ 350,000
13. Petty Cash Fund 125,000 _________ _125,000__ -0-
 14. Insurance Expense 50,000 __________ __25,000_ 25,000
15. Notes Payable 12,000 _12,000___ _________ -0-

D. Compute the previous balance of each of the following accounts after effecting the debit and credit entries.

Previous Balance Debit Credit New Balance

Sample : Cash in Bank P100,000 P20,000 P40,000 P80,000

1. Accounts Receivable __80,000______ 20,000 10,000 90,000

2. Accounts Payable __100,000_____ 40,000 10,000 70,000
3. Khyle Lorenz, Capital __120,000_____ - 30,000 150,000
4. Khyle Lorenz, Drawing ___10,000_____ 8,000 - 18,000
5. Supplies Inventory ___16,000_____ 10,000 6,000 20,000
6. Insurance Expense ___12,000_____ 14,000 18,000 8,000
7. Tools ___14,000_____ 8,000 6,000 16,000
8. Salaries Expense ___20,000_____ 10,000 - 30,000
9. Interest Income ___30,000_____ - 8,000 38,000
10. Cash on Hand __160,000_____ 40,000 80,000 120,000

E. Analyze and determine the effect of each transaction below on Assets, Liabilities and Owner’s Equity by using the
appropriate account titles. Transaction of Jan. 1 is answered for your guide.

Transacti ASSETS LIABILITIES OWNER’S EQUITY

on Date
Increase (Dr.) Decrease Decrease Increase Decrease Increase
(Cr.) (Dr.) (Cr.) (Dr.) (Cr.)
Jan. 1 Cash E. Pingoy,
Capital
5 Accounts Service
Receivable Income
9 Cash Accounts
Receivable
14 Cash E. Pingoy,
Drawing
19 Transportation Accounts
Equipment Payable
20 Cash Rental
Expense
23 Cash Salaries
Expense
25 Cash Accounts
Payable
27 Furniture & Accounts
Fixtures Payable
29 Notes Service
Receivable Income
30 Cash Service
Income
31 Accounts Service
Receivable Income

The selected transactions of Mrs. Evangeline Pingoy, a practicing accountant, are narrated hereunder:

Jan. 1 Mrs. Evangeline Pingoy made an initial cash investment.

5 Rendered professional service on account.
9 Collected cash from a client account.
14 Mrs. Evangeline Pingoy withdrew cash from his business for personal use.
19 Bought a car on account.
20 Paid rental for the month.
23 Paid salaries for the month.
25 Paid the car acquired on account.
27 Bought office cabinet on account.
29 Received a promissory note for services rendered.
30 Rendered professional service for cash.
31 Billed a customer for professional service rendered.
F. Determine the Value Received or Debit and the Value Parted With or Credit and indicate the account classification as to Asset,
Liability, Owner’s Equity, Income or Expenses. The transaction of May 1 is answered for your guide.

Value Received Account Value Parted With Account

Date or Debit Classification or Credit Classification
May 1 Cash Asset __ H. Labasan, Capital Owner’s Equity___
- Gasoline & Oil Expense _Expense ________ __Cash__________ __Asset___________
2 _Cash___________ _Asset___________ _Service Income___ __Income_________
3 _Taxes & Licenses_ _Expense_________ _Cash___________ __Asset___________
7 _Cash___________ _Asset___________ _Service Income___ __Income_________
8 _Gasoline & Oil Expense _Expense_________ _Accounts Payable__ __Liability_______
9 _Prepaid Insurance_ _Asset___________ _Cash___________ __Asset__________
10 Tires & Tubes Inventory_ Asset____________ _Accounts Payable_ __Liability________
14 Cash; Accounts Receivable _Asset; Asset______ _Service Income___ _Income__________
- Accounts Payable___ _Liability_________ _Cash___________ _Asset___________
15 _Commission Expense_ _Expense_________ _Cash___________ _Asset___________
16 Repairs & Maintenance Expense__________ _Cash___________ __Asset__________
17 _Gasoline & Oil Expense _Expense_________ _Accounts Payable_ _Liability_________
22 _Cash___________ _Asset___________ _Unearned Service Income _Liability_________
- _Cash; Accounts Receivable Asset; Asset_______ _Service Income____ _Income__________
- _Commission Expense___ _Expense_________ _Cash___________ _Asset____________
23 _Cash___________ _Asset___________ _Account Receivable _Asset____________
24 _Accounts Payable_ _Liability_________ _Cash___________ _Asset____________
25 _Accounts Payable_ _Liability_________ _Cash___________ _Asset____________
26 _Cash___________ _Asset___________ _Service Income___ _Income___________
- _Gasoline & Oil Expense _Expense_________ _Cash___________ _Asset____________
27 _Unearned Rental Revenue _Liability_________ _Cash___________ _Asset____________
28 Cash; Accounts Receivable Asset; Asset_______ _Service Income___ _Income___________
29 _Commission Expense__ _Expense_________ _Cash__________ _Asset____________
30 _Gasoline & Oil Expense _Expense_________ _Accounts Payable_ _Liability__________
31 _Accounts Payable____ _Liability_________ _Cash___________ _Asset____________
- _Cash___________ _Asset___________ _Accounts Receivable__ _Asset____________
- _Cash___________ _Asset___________ _Unearned Service Income _Liability__________
- _Repairs & Maintenance _Expense_________ _Cash____________ _Asset_____________

The following were the scrambled transactions.

May 1 Mr. Henry Labasan invested cash which he deposited the RCBC, P50,000.
- Bought gasoline and oil for the 2 units Toyota Van, P3,500.
2 Rendered transportation service to various tourists who roamed around the city to watch the Sandugo Festival, P20,000.
3 Paid business permits and licenses including that of the Land Transportation Office, P15,000.
7 Rental revenue for the week from tourists for visiting Panglao Beach Resort, Loboc River and Chocolate Hills, P12,000.
8 Received a bill from Petron Service Center for gasoline withdrawn on account, P15,000.
9 Paid in advance car insurance (own damaged and third party liability) P7,300.
10 Bought spare tire on account from Tagbilaran Dura-Trac, P8,500.
14 Rental revenue for the week:
Cash, P25,000
On account, P10,000
- Payment of the Petron Service Center bill, P15,000.
15 Paid driver’s commission for the week, P7,000.
16 Check-up of Toyota Van and replacement of exploded tire and repair of side mirror, P3,500.
17 Received a bill from Petron Service Center for gasoline withdrawn on account, P17,500.
22 Received cash of P15,000 from Cebu Lions Club for services that has not yet been rendered.
- Rental revenue for the week:
Cash, P12,000
On account, P15,000
- Paid driver’s commission, P7,000.
23 Collected the customer’s account of May 14, P10,000.
24 Partial payment of account with Petron Service Center, P12,000.
25 Paid the account of May 10 with Tagbilaran Dura-Trac in the amount of P8,500.
26 Received P2,800 as payment for a special trip to Baclayon Church.
- Paid gasoline and oil for cash, P1,000.
27 Refunded the amount of P15,000 to Cebu Lions Club re-May 22 transaction. Trip was cancelled.
28 Rental revenue for the week, P27,000 broken down as follows:
Cash, P20,000
On account, P7,000
29 Paid the driver’s commission, P5,600.
30 Bought gasoline on account from Caltex Philippines, P1,000.
31 Paid the account with Caltex Philippines, P1,000.
- Collected in full the customers’ account of May 28 – P7,000 and May 22 – P15,000.
- Received cash of P3,000 from Cebu Employees Union for services that has to be rendered yet.
- Minor repair of Toyota Van, P2,500.