QUARTER 1

ENTREPRENEURSHIP
HANDOUT

LESSON 1

The term "entrepreneur" originates from the French word entreprendre which means "to undertake." It
connotes a business paradigm. which signifies the start of a new business undertaking.

On the other hand, the term "entrepreneurship" comes from the word entrepreneur. It refers to a
particular field of practice or process, as compared to an entrepreneur which is a person practicing
entrepreneurship.

SMALL BUSINESS refers to a business or enterprise that correctly adopts and practices the principles
of entrepreneurship. It is owned by one person with a limited workforce of not more than 20 persons.

The term also includes the small and medium enterprises (SMEs) that have been strongly promoted by
both government and non-governmental organizations (NGOs) in their desire to improve the lives of
the Filipino people through entrepreneurship.

ORDINARY SMALL BUSINESS pertains to a business enterprise and operated by an owner who is
not an advocate of and does not practice the concepts and principles of entrepreneurship.

Entrepreneur refers to a person who strongly advocates and correctly practices the concepts and
principles of entrepreneurship in operating and managing the self-owned entrepreneurial venture.

Entrepreneurship is the art of observing correct practices in managing and operating a self-owned,
wealth-creating business enterprise by providing goods and services that are valuable to the customers.

From its operational definition, entrepreneurship consists of five salient features.

1. It is an art of correct practices.

2. It is a wealth-creating venture.

3. It provides valuable goods and services.

4. It entails opening and managing the self-owned enterprise.

5. It is a risk-taking venture.

LESSON 2

SALIENT FEATURES OF ENTREPRENEURSHIP

• Providing values to customers
• Opening and managing self-owned business
• Risk-taking venture
• Art of correct practices
• Wealth-creating venture

Planning is an important principle in management. It refers to the process of setting the goals of the
business. The entrepreneur, being the owner and manager, must clearly set the goals of his/her
business.
LESSON 3

A theory is a generalization that explains a set of facts or phenomena. It is not an absolute truth. It can
be supported by another observation or proven to be otherwise.

There are several theories on entrepreneurship. Here are some of them:

 The innovation theory on entrepreneurship was contributed by Joseph Schumpeter, an Austrian
economist and political scientist. He wrote about it in his book, The Theory of Economic
Development. The innovation theory regards economic development as the product of structural
change or innovation. Schumpeter argued that the chances for economic evelopment to take place
would be slim unless revolutionary changes in the circular flow of economy would happen. An
economy without any revolutionary change is deemed to be static and cannot expect. any
economic development. Simply put, there will be no development in any economic equilibrium or
status quo.
It becomes the primary role of the entrepreneur to introduce innovation in any of the following
forms:
1. new product
2. new production method
3. new market
4. new supplier
5. new industry structure
 The Keynesian theory on entrepreneurship was developed by John Maynard Keynes, a British
economist. The key concepts of the theory were included in his book, The General Theory of
Employment, Interest and Money, which was published during the Great Depression in 1936. The
theory put so much emphasis on the role of the government in entrepreneurial and economic
development, most especially when the economy was experiencing depression. It suggests that
entrepreneurial activities may not be favorable in the future unless the short- term problem of
economic disequilibrium is finally resolved through the active participation of the government.
 The entrepreneurship theory of Alfred Marshall, an English economist, was introduced in his
book, Principles of Economics. As he strongly asserted that there are four factors in the
production (land, labor, capital, and organization) of goods and services in the economy, he
considered organization as the coordinating element. Without the active participation of
organization, the other factors of production will remain inactive in their role for economic
development.
 Frank Hyneman Knight, an American economist, conceptualized the risk and uncertainty- bearing
theory of entrepreneurship in his book, Risk, Uncertainty and Profit.
 By adopting some concepts of the early economists, Knight viewed an entrepreneur as an agent of
the production process where he/she connects the producers and the consumers. Knight, however,
added risk-taking as an important dimension that will differentiate an entrepreneur from a
worker.."
 Weber's sociological theory - In sociological theory, Max Weber stressed that socia cultures are
the primary driving elements of entrepreneurship. The entrepreneur expected to perform the role
of a good constituent by executing his/her entrepreneurial activities in line with good customs and
traditions, religious beliefs, and morals.
 Kaldor's technological theory - The technological theory was developed by Nichola Kaldor who
considered modern technology as an essential factor in production In the absence of modern
technology application in entrepreneurship, economic development would be slow and growth
might not be expected. The entrepreneuri expected to keep abreast with modern technology and
find ways to apply the same in the entrepreneurial endeavor. Proper application of modern
technology will promote efficiency in the production of goods and services.
 Leibenstein's gap-filling theory - In this theory on entrepreneurship, Henry Leibenstein proposed
that the primary role of entrepreneurship in any economic activity is to fill the existing gap.
Entrepreneurship is responsible for recognizing trends in the market. The entrepreneur is expected
to possess abilities that will conned the different markets. He/She must extend assistance to
entrepreneurial ventures experiencing failures and deficiencies.
 Kirzner's learning-alertness theory - Israel Kirzner was the main proponent of this theory. He
pointed out spontaneous learning and alertness as the two major attributes of entrepreneurship in
any given economy. The entrepreneur must be alert in recognizing entrepreneurial opportunities
 and the ignorance of consumers as well He/She must immediately find appropriate remedy to co
rect the error or wrong perception.
LESSON 4

ENTREPRENEURSHIP

 Entrepreneurship is quality of being an entrepreneur.

 Different from ordinary small businesses activity. The distinction lies in the descriptive word
"ordinary."
 Covers small and medium-scale businesses.
 Entrepreneurship is different from inheriting and/or running an existing businesses (e.g. Family
owned, co-owned), working for other business, and selling already available goods or services.

Entrepreneurship and the activities of ordinary small businesses differ in the following areas:
 Motive in opening a business
 Perception of risk in the business
 Reactions to changes in the environment
 View on competition
 Vision for the development and growth
 Horizon of business operation
 Sources of business funds

LESSON 5

Listed below are some misconceptions on entrepreneurship. Knowing them will enable you to
understand the concept of entrepreneurship and differentiate it from the activities of ordinary small
businesses.
 Entrepreneurship applies only to manufacturing businesses.
 Entrepreneurship applies only to small businesses.
 Entrepreneurship applies mostly to persons with good educational background in business
courses.
 Entrepreneurship applies only to a good economy.
 Entrepreneurship is simply opening a small business.

Entrepreneurial concepts and principles do not make any distinction as to the size of the business
venture. The amount of the business capital does not serve as a reckoning ground for classifying
whether the venture is operating within the concept of entrepreneurship in ordinary small business.
Nevertheless, when the business venture becomes big, expands its operations or open other
branches locally or abroad, the owner usually employs a qualified manager to run the day-to-day
operations of the branches. In effect, entrepreneurship becomes corporate entrepreneurship, which is
a process that goes on inside an existing business venture and may lead to development of new product
and services.

LESSON 6

COMPOUNDED BENEFITS OF ENTREPRENEURSHIP

First, it is important to have a background understanding of the effects of entrepreneurship on the
lives of individual Filipinos, the local community, the Philippine economy. Basically the benefits
derived from entrepreneurship are compounded from one level to the next. It produces a chain of
progressive results from the individual entrepreneur to the community and finally to the whole
Philippine economy.

The list of the possible effects and contributions of entrepreneurship seems limitless. Nevertheless,
this book simply groups the major contributions of entrepreneurship to the Filipino people, the local
community, and the Philippine economy. The listings indicated in a particular group are not all
inclusive.
IMPORTANCE TO THE FILIPINO PEOPLE
1. It provides guidelines in their wealth-creating ventures.
2. It helps improve their financial and social life.
3. It helps broaden their creativity.
4. It helps make their lives happy, fruitful, and successful.
IMPORTANCE TO THE LOCAL COMMUNITY
1. It provides employment in the community.
2. It creates new demand in the market.
3. It makes substantial contribution to the raising and collection of taxes.
4. It facilitates the movement of the factors of production.
5. It creates new business opportunities.
6. It promotes a peaceful and loving community.
7. It increases constructive competition.

IMPORTANCE TO THE PHILIPPINE ECONOMY

1. It encourages competitiveness and thereby challenges entrepreneurs to keep improving their products
and services.
2. It helps find an entrepreneurial niche in the world market.
3. It helps ha en the economic recovery process of the Philippines during financial turmoil or
crackdown.
4. It facilitates the smooth flow of money in the local market.
5. It assists the national government in its desire to have favorable economic ratings in the world
market.

LESSON 7
SOURCES OF ENTREPRENEURIAL IDEAS

As a future entrepreneur, always remember that a business must be firmly established on existing
business opportunities, and that there can be no business opportunities in the absence of an
entrepreneurial idea.
In contrast, the owner of an ordinary small business usually opens a business even if there are no
business opportunities existing in the community. As a result, the business can hardly move from
where it started even after several years of operation.
Thus, it all boils down to the basic need to identify the sources of entrepreneurial ideas, some of
which are as follows:
 Changes in the environment
1. The physical environment includes:
a. climate
b. natural resources
c. Wildlife
2. The societal environment includes the various forces like:
a. economic forces
b. sociocultural forces
c. political forces
d. technological environment
3. The industry environment of the business includes:
a. government
b. competitors
c. suppliers
d. customers
e. creditors
f. employees
 Technological discovery and advancement
 Government's thrust, programs, and policies
 People's interests
 Past experiences
SKILLS AND CORE COMPETENCIES IN ENTREPRENUERSHIP

Skills are considered as the personal abilities to do things well.

Sources of skills:
• Knowledge
• Practice/Experience
• Aptitude

ENTREPRENEURIAL SKILLS

What kind of skills should be acquired and developed in a deliberate and systematic fashion by a
person who has an intense desire of becoming a successful entrepreneur?

The answer is simple— entrepreneurial skills. These refer to the set of cognitive, technical and
interpersonal skills required in the practice of entrepreneurship.

Cognitive Skills
the mental ability of the entrepreneur to learn new things, generate new ideas, and express both
knowledge in oral and written form.
The Cognitive Skills of an entrepreneur include:
1. Ability to understand written materials
2. Ability to learn and apply new information
3. Ability to solve problems systematically
4. Ability to create new ideas
5. Ability to innovate new products and procedures or methods

why Problem-Solving Skill Matter?

Problems are common in the life of an entrepreneur as he/she manages day by day operations of the
business venture.
The scientific approach in solving business problems involves:
1. defining the real problem,
2. gathering information about the problem,
3. formulating alternative solutions,
4. evaluating alternative solutions
5. selecting and implementing the optimal solution, and
6. evaluating the decision

SCIENTIFIC APPROACH IN PROBLEM-SOLVING

The first step is to define the real problem. The real problem must be correctly identified. The
entrepreneur must be aware that the symptoms of the problem are merely pointers towards the actual
problem.

For example, the owner of the business notices that the net profit has been decreasing for the past five
months. He/She may then consider that the problem of the business is decreasing of the net profit so
he/she should come up with a solution that will lead to an increase in the net profit.

SCIENTIFIC APPROACH IN PROBLEM-SOLVING

Different ways to increase the net profit of the business. Some of these are:
1. increasing the sales volume of the products,
2. increasing the selling price,
3. decreasing the costs of production and expenses, and
4. improving the marketing program by introducing a heavy promotional campaign.
SCIENTIFIC APPROACH IN PROBLEM-SOLVING

Once the necessary or required information is gathered, the next step is to formulate alternate solutions.
The possible effects of each alternative solutions must be spelled out.
These can be grouped into the following categories:
1. Effects to the business in general
2. Effect to the work force
3. Effect to the supplier of raw materials and utility provider
4. Effect to the end user and prospective consumers
5. Effect to the future operation
6. Effect to other departments or units
7. Effect to the financial, marketing and production operations

The next step is to evaluate the alternative solutions

In the process of evaluating alternative solutions the following criteria must be considered:

1. Availability of production resources

2. Cost involved in the implementation
3. Degree of the risk involved
4. Effect to the whole business
5. Nature, type and size of the problem
6. Level of urgency
7. Different forces in the environment

TECHNICAL SKILLS
– It must be studied and learned in the most practical way. The result of cognitive skills may not carry
a significant value without technical skills. An idea will remain an idea without the technical skills.
Technical skills are the external replica of a person's cognitive skills.

TECHNICAL SKILLS
Entrepreneurs must develop their technical writing skills to be able to.

1. Respond immediately to the problems of customers,

2. Negotiate easily with suppliers,
3. Make the necessary financial arrangement with creditors, and
4. Attract prospective consumers without difficulty.

INTRAPERSONAL
The relationship of the entrepreneur to the workers, suppliers, creditors, prospective consumers, and
the members of the business community.

The Intrapersonal skills of the entrepreneur may include:

1. Skills in verbal communication
2. Skills in Non- verbal communication
3. Skills in Listening
4. Skills in Leading
 5. Skills in Negotiating

They must be developed and enhanced to equip the entrepreneur in:

1. Saying what he/she wants and how he/she say it;
2. Working with his/her workers and employees;
3. Relating, negotiating and dealing with his/her consumers, suppliers, and creditors;
4. Communicating his/her ideas, beliefs, values, and opinions to the people whom he/she
worked with

The Entrepreneurial Competency

— Entrepreneurial concepts and principles
— Entrepreneurial Character and Traits
— Entrepreneurial Skills
These three competencies indicates that a successful entrepreneur successfully possess and
understand the concepts and principles, character and traits, and competent entrepreneurial skills.

CORE COMPETENCY
The combination of the Entrepreneurial Competency that provide and become the ultimate source of
competitive advantage of the entrepreneur
Entrepreneurial Competency » Entrepreneurial Competitive advantage

Competitive Advantage
Refers to the specific condition or position of the entrepreneurial venture that:
1. Provides the necessary attributes to outperform competitors,
2. Distinguishes the venture between competitors,
3. Achieves superior performance in the industry, and
4. Produce a product or develop production methods that can hardly be copied by
competitors
Total Perspective of a successful Entrepreneur
— Fully understand the entrepreneurial concept and principle.
— Equipped with character traits common among successful entrepreneur
— Acquires, develops and sharpens entrepreneurial skills.

The business plan

The business plan is actually the roadmap of the new business. It is the road map of the entrepreneur.
It is the only written document that must be prepared before opening a new business or expanding
existing business it provides a clear direction to any uncertain business endeavor

business plan - defined as the detailed and integrated written document that describes the various
activities involved in opening and operating a new entrepreneurial venture.

MAJOR PARTS OF THE BUSINESS PLAN

Though there are universally accepted standard format or structure of business plan this
books adopts the following format for the major parts of the business plan
1. Introduction
The introduction presents the general perspective of the business it may consist of
one to two page it includes among others, the following questions
1. Proposed name of the business
2. Address of the business
3. Name of the owner
4. Description of the business
5. Location of the business
6. Funding requirements and source
2. Executive summary
EXECUTIVE SUMMARY is commonly the last section to be written after all other major parts
have been completed, it is the next major part of the business plan after the introduction. It
points out the overall highlights of the business plan as well as bird's-eye view of its sections.
Executive summary must include:
1. Vision, mission, goals, and objectives of the business
2. Business model
3. Business and product position
4. Wealth improvement approaches maintain a competitive advantage, position the
business in the market, improve the market share, and maximize the utilization of
resources
5. Parties supporting the business
Consumers
Creditors
Suppliers
Employees and Staff

3. Environmental analysis
 The next major or section of the business plan after the executive summary is the
environmental analysis.
 It is a strategic tool that helps determine the external and internal factors affecting
the performance of the business. These factories be political, economic, social, or
technological in nature.
 The environmental analysis may consist of at least 20 pages including the graphical
representations, tables, and computations.
 The environmental analysis section is considered the heart of the business plan.

The next step is to present the societal analysis and determine the different variables
affecting the societal environment.
These variables include:
1. political forces,
2. economic forces,
3. socioeconomic forces,
4. technological forces,
5. ecological forces, and
6. legal forces
The third level of environmental analysis is the industry analysis. The industry analysis
basically involves three important related tasks as follows:
1. Conducting a critical evaluation of the forces in the industry that affect the proposed
business.
2. Evaluating the probable position of the business in the industry.
3. Determining the most appropriate strategy that may be adopted by the proposed
business.

4. Business description
The business description section presents the nature and form of the business to
undertaken, and may cover two to three pages.
In addition, the business description also includes the following information:
1. Product or service that it plans to produce or serve
2. Various plant and office equipment
3. Size of the proposed business
4. Future parties with whom contracts may be necessary
5. Personnel requirement
6. Administrative operation
5. Organization plan
The following plan provides a details description of the business in terms of the following:
Form of the business organization
Liability of the owner or owners
Organizational structure
Roles and responsibilities
Salary requirements
In case a feasibility study has been prepared prior to the preparation of the business plan,
most of the information contained in the organization plan can be found in the management
aspect of the feasibility study.

Form of the Business Organization

A business organization can come in the form of a sole proprietorship, a partnership, or a
corporation. There must be a purpose for the selection of the most appropriate business
form. In other words, the statement, “The ABC Manufacturing shall be in the form including
the following:
Capital requirement
Liability of the owner or owners
Management and supervisory skills
Tax implication
Government intervention
Nature of the business

Liability of the Owner or Owners

 This section described the extent of the owner’s financial obligation with creditors.
 The term limited liability means that in the case of business dissolution and there still
remains unsettled financial obligation of the business, the creditor cannot go after the
personal property of the business owner.
 On the other hand, the term unlimited liability means that the creditors can run after the
personal property of the owner in the event that the business fails to fully settle its financial
obligation during business dissolution.

Organizational Structure
 The organizational structure of the business is usually shown or reflected in the
organizational chart.
 It shown and defines the hierarchy of the different positions in the organization and the
interrelationships of the different offices or departments.
 The organizational chart depicts the flow of communication within the organization, and
the line and staff authority that must be observed and executed.

6. Production plan
PRODUCTION PLAN
The production plan presents or describes activities related to the production of goods. The
production plan is the results of the industry analysis, particularly the study of supply and
demand and consumer behavior.
The production plan usually includes the following:
 Production schedule
 Production process
 Processing plant and equipment
 Sources of material
 Production cost
This section basically applies to manufacturing entities. For service entities, this section must
be modified and labeled as Service Provision Plan.
7. Operation plan
The operation plan is majority section plan that outlined the various activities, from the
acquisition of raw materials to the delivery of the products to the target consumer.
The operation plan commonly covers the following areas:
 Evaluation of suppliers
 Materials requisition and receiving procedures
 Storage and inventory control system
 Shipping system and control
 Function of support services

8. Marketing plan
The marketing plan details how the proposed business will sell its product to the target
customers. It may consist of some or all of the following important sections:
 Product
 Place
 Price
 Promotion
 People
 Packaging
 Positioning

9. Financial plan
It accumulates and describes all the data expressed in monetary units from the other
sections of the business plan.
The financial plan simply collates and describes the various sets of information derived from
the other sections of the business plan. It is composed of the following important areas:
1. Major assumptions
2. Projected statement of comprehensive income
3. Projected statement of cash flows
4. Projected statement of changes in equity
5 Projected statement of financial position
6. Financial statement analysis

10. Appendix

SIMPLE BOOKKEEPING

The business performs various activities everyday from the day it is created until the end of its
operation. The volume of these transactions depends on its size, complexity, and scope.

Bookkeeping refers to the recording of business transactions in the books of the business. However,
only those transactions that are considered quantifiable are given recognition. A transaction is
considered quantifiable when it affects the elements of accounting namely assets, liabilities, capital,
income, and expense and can be expressed in peso.

The term transaction refers to events where there are exchanges of values that are measurable in one
common denominator which is the Philippine peso.
Bookkeeping involves the chronological writing or recording of business transactions and events in the
books of accounts for the first time. All transactions will be recorded in the journal which is the book
of the original entry and the ledger which is the book of final entry.

JOURNAL
DATA COLUMN
shows the year and the month of the occurrence of the transaction.

PARTICULARS
shows the debit and credit amount and a brief explanation
POSTING REFERENCE
it is used when the entries are posted after the amounts are transferred to related ledger accounts.
DEBIT COLUMN
second money column where the amount credited is recorded

CREDIT COLUMN
first money column where the amount debited is recorded.

LABELING THE JOURNAL

 On the top of the first page, write at the center the caption “General Journal”
 On the rightmost side, write the page number of the journal.
 On the succeeding page, write only the page number of the journal.

WRITING THE DATE

 Fill up the data for the year, month and day.

 Write the year and the month on every page.
 If there are two or more transactions in one day, do not repeat the day.

WRITING THE DEBIT AND CREDIT ACCOUNT TITLES

 The debit account title must be written first.

 The credit account title must be indented from the debit account title.
 Abbreviation of an account is not allowed.
 The explanation must be indented from the credit account title.
 There must be no blank space in the succeeding transaction.

WRITING THE AMOUNT

The debit amount must be written in the first column aligned with the debit account title.

ACCOUNT TITLES
The recording of business transactions involves the use of account titles. The account title provides the
description of the type and nature of the business transactions. The account titles are grouped into five
categories technically referred to as the accounting elements. The five categories of accounts or
elements of accounting are as follows:
 Assets
 Liabilities
 Capital
 Income
 Expense
ASSET ACCOUNT TITLES
 CASH- describes money, either in paper or coins.
 ACCOUNTS RECEIVABLES- describes collectibles from customers who made sales transaction
on credit.
 NOTES RECEIVABLE- describes collectibles that are supported with promissory notes.
 SUPPLIES ON HAND- describes unused office or store supplies.
 UNUSED FACTORY SUPPLIES- describes unutilized manufacturing supplies.
 INVENTORY- describes unsold goods that are intended for sale. The types of inventories for
manufacturing businesses are as follows:
 RAW MATERIALS INVENTORY- refers to unutilized materials in the production of goods.
 WORK-IN-PROCESS INVENTORY- refers to unfinished goods at the end of the period.
 FINISHED GOODS- refers to unsold finished goods.
 EQUIPMENTS- describe tools and equipment like calculators, computers, or any equipment
directly related to the production of goods.
 FURNITURE AND FIXTURES- describe assets like chairs, tables and display cases.

LIABILITY ACCOUNT TITLES

 ACCOUNTS PAYABLE- describes the financial obligations arising from goods purchased or
services received.
 NOTES PAYABLE- describes the financial obligations supported with notes.
 UTILITIES PAYABLE- describes the unpaid obligations on light and water consumption.
 SALARIES PAYABLE- describes the unpaid salaries of the workers.
 CAPITAL- describes the original and additional investment of the owner.
 DRAWING- describes the temporary withdrawal of capital by the owner.

EXPENSE ACCOUNT TITLES

 SALARIES AND WAGES- describes the expenses on payments or salaries.

 STORE SUPPLIES EXPENSE- describes the expenses on store supplies.
 TAXES AND LICENSES- describes the expenses on taxes, permits, fees, and licenses.
 UTILITIES EXPENSE- describes the expenses on light and water.
 TRAVELLING EXPENSE- describes the expenses on transportation or fare of personnel.

BUSINESS DOCUMENTS
The business transactions that are recorded in the two-column general journal are based in the business
documents, which basically support the existence of transaction. All entries appearing in the general
journal are fully supported with business documents. Before any recording process takes place, all the
supporting documents must be arranged chronologically.

PURCHASE ORDER- an official business document issued by the buyer to the seller of goods.
SALES INVOICE- a commercial business document issued by the seller to the buyer.
OFFICIAL RECEIPT- a commercial document indicates payments or receipt of cash.

RECEIVING REPORT- document used within the business upon receipt of goods shipped by the
courier or forwarder.
CHECK- document that orders a payment of money from the current account maintained in bank.
VOUCHER- internal business document that authorizes the incurrence or payment of obligations.

CLASSIFYING
Bookkeepers, therefore, are responsible for recording the transaction of the business daily. This activity
is technically called CLASSIFYING. It refers to the grouping of similar business transaction and
events. It is the second mechanical phase of the entire accounting procedure.
The process of classifying similar transactions, the same info’s were found in the journal will be
transferred to the ledger. The process of transferring the same information from the journal to the
ledger is technically called posting.

LEDGER
The ledger is another book of accounts used to record business transactions and events. It is a book of
final entry. It acts as tool in accounting that accumulates all the necessary information prior to the
preparation of financial statement.

The ledger appears like capital letter T. The left side will be debit, on the other hand, credit will be the
right side. Both side however, consist of the same columns which are as follows:
1. Date
2. Particulars
3. Post Reference
4. Amount

POSTING
STEP 1
Check the completeness and arrangement. All the accounts appearing must have a separate ledger. A
chart of accounts is a list of account titles that organize the process and segregate accounting values
into assets, liabilities, capital, income and expenses. In case of no chart of accounts, the accounts in
journalizing must have a ledger.

STEP 2
Label the different sections of the ledger properly. The account title must be at the center. Indicate the
number at the rightmost side in line with the account title. Don't forget to write the year and the month
only once on both debit and credit.

STEP 3
Start the posting process with the first debit entry found in the journal. In posting the debit entry,
observe the ff. procedures:
• transfer the date first, followed by the amount.
• Indicate the folio column of the ledger the page number of the journal.
• Indicate the folio column of the general journal the page number of the ledger.
• make a brief explanation in the particular column of the ledger (optional)

STEP 4
Repeat all the procedures in step 3 for the credit entry.

STEP 5
Repeat step 3 and 4 in the next entry in the journal until all entries are completely posted. Remember
the posting is usually made at the end of the month after recording the last transaction.

FOOTING THE ACCOUNT

After all the entries have been posted, the next bookkeeping procedure is to foot the account.
Footing is the process of adding the debit and the credit money columns of the ledger and
finding their balances.

TRIAL BALANCE
After all the accounts in the ledger have been added and the balances have been completed,
the real bookkeeping procedure is to prepare the trial balance.
Trial Balance is the listing of the debit and credit balances of accounts from the general ledger
with the following purposes:
 To prove the equality of debit credit
 To determine the nominal accounts to be closed
 To serve as basis for making draft financial statements
The trial balance has two major parts, namely the heading and the body.
Heading normally has three lines intended for the name of the business, title, and the date of
the trial balance.
 Body presents the different account titles and their balances.
There are two kinds of trial balance. These are the trial balance of totals and the trial balance of
balances. The trial balance of balances is commonly used trial balance among the different businesses.