Fundamentals of Accountancy Business

Learning Area Grade Level 11

W4 Quarter
and Management 1
Fourth Date
I. LESSON TITLE General and Special Journals
II. MOST ESSENTIAL LEARNING Record transactions of a merchandising business in the general and special journals
COMPETENCIES (MELCs) (ABM_FABM11-IVe-j-36)
III. CONTENT/CORE CONTENT Accounting Cycle of a Merchandising Business
IV. LEARNING PHASES AND ACTIVITIES
I. Introduction (Time Frame: 10 minutes)
Good day learners! Welcome to another day of learning. After analyzing transactions from source documents, we can now proceed to
the next step which is journalizing. Journalizing is the process of recording transactions chronologically in a journal. The journal is also known as
the book of original entry because it is where the first record of a business transaction can be seen.
By the end of our topic, you should be able to:
1. analyze business transaction of a merchandising business,
2. records transactions of a merchandising business in the general and special journals, and
3. display a professional commitment to ethical practice of generally accepted accounting principles or GAAP.

D. Development (Time Frame: 100 minutes)

Learning Task 1 - Call a Friend
Directions: Let us start with a short warm-up! Call a friend and try to do the given task. Complete the journal entry with the correct account title/
name and/or amount.
On February 01, 2018, the owner invested 100,000. 30% owed from A. Alvarez and 70% is his own initial capital.
Date Particulars Debit Credit
2018
Feb 1 Cash 100,000
? ?
Owner, Capital 70,000
In your previous lesson, you had thought about how to record transactions in a general journal (GJ). However, there are instances where
a transaction happens repetitively which is not beneficial for a company to record it again and again in a general journal. The best example is
selling merchandise, so basically you will have numerous transactions about sales. It’s not beneficial for a company to just use a general journal
for repetitive transactions. With this, we have a special journal that will help our general journal in recording transactions.
Special Journal is a journal other than a general journal that records types of transactions which occur frequently. It may be seen as a
repetitive list of entries when a general journal is used. The following are the four common types of special journals:
● Sales Journal (SJ) is used to record sales of merchandising on account. It repeatedly records debit on accounts receivable and credit on
sales.
● Purchases Journal (PJ) is used to record purchase merchandise on account. It repeatedly records debit to purchases and credit to
accounts payable.
● Cash Receipts Journal (CRJ) is used to record receipts of cash from whatever source. It repeatedly records a debit to cash.
● Cash Disbursements Journal (CDJ) is used to record payments of cash for whatever purpose. It repeatedly records a credit to cash.
Transactions that cannot be recorded in any of the above special journals are recorded in the general journal.
Some of the advantages of a special journal are the following:
1. saves time in journalizing and posting,
2. special journals promote division of labor,
3. special journals help in management analysis
Let us now analyze and journalize transactions in merchandising business using CRJ, CDJ, and GJ.

Date Transaction
2018
June 1 L, the owner, invested P300,000 cash and P50,000 worth of merchandise into the business. The merchandise has an unpaid P10,000 account from N
to be assumed by the business (OR#001).
2 Purchased from G store supplies worth P3,000 on cash basis (CV#001)
3 Returned P3,000 worth of store supplies purchased from G (OR#002)
4 Purchased from H store supplies worth P4,000 on account
5 Returned P400 worth of store supplies purchased from H
6 Purchased from J store equipment worth P30,000 on cash basis (CV#002)
7 Was granted a P2,500 allowance on store equipment purchased from J (OR#003)
8 Purchased from K store equipment worth P40,000 on terms P10,000 down, balance on account (CV#003)
9 Was granted a P3,500 allowance on store equipment purchased from K
10 Received from Meralco the electricity bill for the month of May amounting to P11,000
11 Paid rent of P20,000 (CV#004) for the month
12 Paid the utility bill received last June 10 (CV#007)
13 The owner invested additional merchandise worth P12,000 into the business
 30 The owner withdrew merchandise worth P6,000 for personal use
June 1- this transaction is recorded in the CRJ since it involved an increase in the cash balance of the business.
CASH RECEIPTS JOURNAL CR1
Date OR Received Ref. Cash Dr Accounts Receivable Dr Merchandise Inventory Dr Accounts Payable Cr L, Capital
No. from (Cr) Cr
June 1 001 L 300,000 50,000 10,000 340,000
The amount credited (Cr) to L, Capital is the difference between the assets invested and liabilities transferred into the business. This is equal to P340,000 (P300,000
+ P50,000 – P10,000).
June 2 – this transaction involves payment of cash and is recorded in the CDJ. In the CDJ, a special column for “Store Supplies Dr” is set up to record this
transaction.
CASH DISBURSEMENT JOURNAL CD1
Date Check Paid to Ref. Accounts Payable Dr Purchases Dr Store Supplies Purchase Discount Cr Cash Cr
Voucher No. (Cr) Dr
June 2 001 G 3,000 3,000
June 3 - the return of supplies originally purchased on cash basis is recorded in the CRJ as a debit to Cash and a credit to Store Supplies.
The “Store Supplies Cr” column is set up to recognize the return of supplies purchased.
CASH RECEIPTS JOURNAL CR1
Date OR Received Ref. Cash Dr Sales Discount Accounts Receivable Dr Sales Store Supplies
No. from Dr (Cr) Cr Cr
June 3 002 G 300 300
June 4 - this transaction is a credit purchase but is not recorded in the PJ since the items purchased are supplies and not merchandise. Should the business wish to have all its
purchases recorded in the PJ, then special columns for “Supplies” and “Equipment” are to be set up in the PJ. However, following the format of the PJ used by the business,
there are no special columns for supplies and therefore the purchase of supplies is recorded in the GJ.
GENERAL JOURNAL G1
Date Particulars Ref. Dr Cr
June 4 Store Supplies 4,000
Accounts Payable 4,000
Purchase store supplies
June 5 – this transaction involves the return of supplies originally purchased on credit. This does not involve cash.
GENERAL JOURNAL G1
Date Particulars Ref. Dr Cr
June 5 Accounts Payable – H 400
Store Supplies 400
Returned store supplies purchased
June 6 –this transaction involves a credit to Cash and is recorded in the CDJ. A special column for “Store Equipment Dr” is set up to record the cost of store equipment
purchased.
CASH DISBURSEMENT JOURNAL CD1
Date Check Paid to Ref. Accounts Payable Dr Purchases Dr Store Equipment Dr Purchase Discount Cr Cash Cr
Voucher No. (Cr)
June 6 002 J 30,000 30,000
June 7 - this transaction is similar to the June 3 transaction, an allowance granted on the store equipment purchased originally on cash basis increases the Cash account of the
business and is recorded in the CRJ. A special column for “Store Equipment Cr” is set up to recognize the decrease in the cost of store equipment.
CASH RECEIPTS JOURNAL CR1
Date OR Received Ref. Cash Dr Sales Discount Accounts Receivable Dr Sales Store Equipment Cr
No. from Dr (Cr) Cr
June 7 003 J 2,500 2,500
June 8 - this transaction involves purchase of equipment with downpayment and is recorded in the CDJ.
CASH DISBURSEMENT JOURNAL CD1
Date Check Paid to Ref. Accounts Payable Dr Purchases Dr Store Equipment Dr Purchase Discount Cr Cash Cr
Voucher No. (Cr)
June 8 003 K 30,000 40,000 10,000
Notice that a column for “Store Equipment Dr” isset up to reflect the increase in Store Equipment. If there is limited space, a sundry column for miscellaneous
receipts and disbursements can be used. The sundry column acts as a general journal in special journals. Also, in this case, we assume the gross method so the credit
to Accounts Payable is simply the difference between the P40,000 cost of store equipment and P10,000 down payment. The other method, the net method, would
have taken out any cash discount from the P30,000 Accounts Payable immediately on date of purchase.
June 9 - this transaction is not a purchase or sale of merchandise on accounts and does not involve cash.
GENERAL JOURNAL G1
Date Particulars Ref. Dr Cr
June 9 Accounts Payable – K 3,500
Store Equipment 3,500
Allowance on store equipment purchased

June 10 - the receipt of the utility bill does not involve cash and is recorded in the GJ.
GENERAL JOURNAL G1
 Date Particulars Ref. Dr Cr
June 10 Utilities Expense 11,000
Accounts Payable – Meralco 11,000
Received utility bill
June 11 - payment of expenses such as rent is recorded in the CDJ.
CASH DISBURSEMENT JOURNAL CD1
Date Check Paid to Ref. Accounts Payable Dr Purchases Rent Expense Purchase Discount Cr Cash Cr
Voucher No. (Cr) Dr Dr
June 11 004 Lessor 20,000 20,000
June 12 - the payment of utility bill which involves a debit to the liability set up upon receipt of the bill and credit to the cash account is recorded in the CDJ.

CASH DISBURSEMENT JOURNAL CD1

Date Check Paid to Ref. Accounts Payable Dr Purchases Other Accounts Dr Purchase Discount Cr Cash Cr
Voucher No. (Cr) Dr
June 13 12
June - additional investment
007 of merchandise
Meralco is recorded in GJ.
(11,000) 11,000

GENERAL JOURNAL G1
Date Particulars Ref. Dr Cr
June 13 Purchases 12,000
L, Capital 12,000
June 30 – this transaction does not involve cash, thus is recorded in the GJ.
Additional investment by the owner

GENERAL JOURNAL G1
Date Particulars Ref. Dr Cr
June 30 L, Drawing 6,000
Purchases 6,000
Withdrawal of merchandise by the owner
E. Engagement (Time Frame: 80 minutes)
“Luke 16:10 He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in
much”
Learning Task 2 –General and Special Journal Entries
Directions: To practice mastery of the topic, on your accounting journal, make journal entries of L Company for June 2018 transactions. This time
a more complete view of the business operation with combined transactions such as purchase- related, sales-related, and other transactions is
provided. Be reminded that the company uses both general and special journals. When journalizing, assume a periodic inventory system.

Date Transaction
June 1 L, the owner, invested P300,000 cash and P50,000 worth of merchandise into the business. The merchandise has an unpaid P10,000 account from N
2018 to be assumed by the business (OR#001).
2 Purchased from G store supplies worth P3,000 on cash basis (CV#001)
3 Returned P3,000 worth of store supplies purchased from G (OR#002)
4 Purchased from H store supplies worth P4,000 on account
5 Returned P400 worth of store supplies purchased from H
6 Purchased from J store equipment worth P30,000 on cash basis (CV#002)
7 Was granted a P2,500 allowance on store equipment purchased from J (OR#003)
8 Purchased from K store equipment worth P40,000 on terms P10,000 down, balance on account (CV#003)
9 Was granted a P3,500 allowance on store equipment purchased from K
10 Received from Meralco the electricity bill for the month of May amounting to P11,000
11 Paid rent of P20,000 (CV#004) for the month Purchased
10,000 ( CV#005 )
from A merchandise on cash basis, P
Paid freight on merchandise purchased from A, P800 (CV#006)
12 Paid the utility bill received last June 10 (CV#007)
Purchased from B merchandise worth P15,000 on terms 2/10, n/30
13 The owner invested additional merchandise worth P12,000 into the business
Purchased from C merchandise worth P20,000 on terms 50% down, balance 2/10, n/30 (CV#008)
14 Returned P500 worth of merchandise purchased from A (OR#004)
15 Returned P1,000 worth of merchandise purchased from B Sold to D
merchandise on cash basis P10,000 (OR#005) Paid freight on
merchandise sold to D, P800 (CV#009)
16 Returned P1,500 worth of merchandise purchased from C
Sold to E merchandise worth P15,000 on terms 2/10,n/30 (SI#001)
17 Paid P2,000 in partial payment of an account to C (CV#010)
Sold to F merchandise worth P20,000 on terms 50% down, balance 2/10, n/30 (OR#006)
18 Received the return of P500 worth of merchandise sold to D (CV#011)
19 Received the return of P1,000 worth of merchandise sold to E
20 Received the return of P1,500 worth of merchandise sold to F
21 Collected P2,000 from F for partial payment of account (OR#007)
22 Paid in full account with B (CV#012)
26 Collected in full account with E (OR#008)
30 The owner withdrew merchandise worth P6,000 for personal use
Paid in full account with C (CV#013) Collected in full
account with F (OR#009)
 Provided below is the Chart of Accounts of L Company as your reference.
Account Account Classification Account Title
Number
001 Current Assets Cash
031 Current Assets Accounts Receivable
041 Current Assets Merchandise Inventory
056 Current Assets Store Supplies
63 Non-current Assets Store Equipment
64 Non-current Assets – contra account Accumulated Depreciation – Store Equipment
071 Current Liability Accounts Payable
075 Current Liability Salaries Payable
101 Owner’s Equity L, Capital
102 Owner’s Equity L, Drawing
111 Revenues Sales
112 Revenue-contra Sales Returns and Allowances
113 Revenue-contra Sales Discount
121 Cost and Expense Purchases
122 Cost and Expense – contra account Purchase Returns and Allowances
123 Cost and Expense – contra account Purchase Discount
125 Cost and Expense Freight – In
131 Cost and Expense Utilities Expense
132 Cost and Expense Salaries Expense
133 Cost and Expense Rent Expense
137 Cost and Expense Store Supplies Expense
139 Cost and Expense Freight – Out
141 Cost and Expense Depreciation Expense – Store Equipment
180 Others Income Summary

A. Assimilation (Time Frame: 20 minutes)

Learning Task 3– Mind Mapping
Directions: On a whole sheet of bond paper do the following instruction and
paste the bond paper to your accounting journal.
1. Create a cluster map as shown on the side.
2. Write the advantages of using a special journal.
3. Write a brief explanation of the cluster map.

V. ASSESSMENT (Time Frame: 20 minutes)

(Learning Activity Sheets for Enrichment, Remediation, or Assessment to be given on Weeks 3 and 6)
To test your understanding of the topics, in your own words describe and explain clearly and in detail the purpose of Special Journals.
Write your answer in your accounting journal.
VI. REFLECTION (Time Frame: 10 minutes)
● Communicate your personal assessment as indicated in the Learner’s Assessment Card.
Personal Assessment on Learner’s Level of Performance
Using the symbols below, choose one which best describes your experience in working on each given task. Draw it in the column for Level of
Performance (LP). Be guided by the descriptions below:
✰ - I was able to do/perform the task without any difficulty. The task helped me in understanding the target content/ lesson.
✔ - I was able to do/perform the task. It was quite challenging, but it still helped me in understanding the target content/lesson.
? – I was not able to do/perform the task. It was extremely difficult. I need additional enrichment activities to be able to do/perform this task.

Learning Task L Learning Task L Learning Task L Learning Task L

P P P P
Number 1 Number 3 Number 5 Number 7
Number 2 Number 4 Number 6 Number 8
VII. REFERENCES Rabo, Joy S., Herminigilda E. Salendrez,&Florenz C. Tugas. Fundamentals of Accountancy, Business and Management 1. Q
Teaching Guide for Senior High School Fundamentals of Accountancy Business and Management 1. Commission on Higher E
QuexhubPERC Learning Portal

Josephine P. Canlas/ Adora G. del Mundo/ Cherie L.

Prepared by: Jennifer B. Fernandez Checked by:
Logatoc/ Feliz A. Tayao