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Department of Education
PUBLIC TECHNICAL -VOCATIONAL
HIGH SCHOOLS
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HOW TO USE THIS MODULE
Welcome to the Module “Preparing and Maintaining Financial
Records and Reports”. This module contains training materials and
activities for you to complete.
The unit of competency “Prepare and Maintain Financial
Record and Reports” contains the knowledge, skills and attitudes
required for the course Entrepreneurship.
You are required to go through a series of learning activities in
order to complete each of the learning outcomes of the module. Follow
these activities on your own and answer the Self-Check at the end of
each learning activity.
If you have questions, don’t hesitate to ask your teacher for
assistance.
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COURSE : ENTREPRENEURSHIP IV
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WHAT WILL YOU LEARN?
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6. It refers to the things of value owned by a business.
a. capital
b. inventory
c. cash
d. asset
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LESSON 1
Prepare and Maintain Financial Records and Reports
LET US STUDY
WORDS TO STUDY
Assets are things of value owned by the business
ACCOUNTING
The language of business
The art of recording, classifying, summarizing in a significant
manner and in terms of money, those transactions and events
which are part, at least of a financial character and interpreted
as the results thereof.
BOOKKEEPING
The act of recording business and events in systematic and
chronological manner. The person involved in this task is the
bookkeeper. His main job is to record and process data in the
accounting system
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Using the example on the below, let us illustrate the ‘Dual Aspect
Convention of Bookkeeping:
After the previous example let us assume that Bert buys a t-shirt from
Rene for Php.130.00. We can see here that although we are concerned
with a single commercial transaction (from Bert’s point of view –
buying chicken for cash, from Rene’s point of view – selling chicken
for cash.) We are still left with the ‘dual aspect.’
In bookkeeping, each
Debitsingle commercial
and Credit Rule transaction is
recorded twice. On the ‘received’ side and then again on the ‘Gave’
side. Debit is on the left side of an account journal.
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Type of To Debit the Account To Credit the Account
Account
1. Personal When the person in When the person in whose
whose name the account name the account is kept
is kept is in debt to us. is in credit with us.
2. Real When the account When the account gives us
received money or money equivalent.
equivalent
3. Profit and Any account that ends Any account that ends
Loss with the words “Expense with the words ‘Revenue
Accounts” Account”.
COMPREHENSIVE EXAMPLE
1.1 We bought goods from GMC Grocery for an overall sum of
Php.100.00 (invoice no.123)
2.1 We sold part of the goods for Php.600.00 cash (receipt no.1950).
3.1 We paid Php.200.00 cash for electricity expenses (expense
voucher no.001)
4.1 We bought a stone from Rene for Php.20,000.00 (invoice no.953)
5.1 We rented the store out for Php.700.00 cash invoice no. 001
In the first part of the solution, the records will be presented in the form
of a “T Account” and they will be presented textually in the second part.
T Accounts
Event 1
Event 2
Event 3
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Event 4
Event 5
Business Transaction
Date:
2008
August 1 Cash Investment amounting to- Php.10,000.00
Received Group Amounting to- Php.25,000.00
Investment Canteen – equipment- Php.15,000.00
Paid Permit and License Php.500.00
Purchase Merchandise
Php.25,000.00
And paid
Php150.00
Transportation only 90% of the amount purchased was
paid in cash
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August 2-6 : Sold cooked food and merchandise for
Php.30,000.00 only 95% was collected in cash.
FINANCIAL STATEMENTS
INCOME
BALANCESTATEMENT
SHEET
It is a formal
Balance Sheetstatement of the financial position of the
It
business isthat
a report
Income showsthat
thesummarizes
Statement the revenue,
assets, liabilities items,equity.
and owner’s
expense and
It contains the
too
Statement difference
main between
sections:
of Cash Receipt called net profit/loss for 11
andisDisbursement
the period. Assets
Liabilities
BALANCE SHEET ACCOUNTS
Cash reported in the balance shows in your cash book,
with the total cash on hand and the bank deposits
Receivables or payables – are summarized from the
accounts maintained with debtors and creditors.
Merchandise and supplies inventory – are determined by
having physical count.
Capital is simply the excess of assets over liabilities
Assets – are things of value owned by a business
o Assets are normally classified as current, fixed
and other assets.
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Cost of Goods Sold – the inventory balance shown on in the
balance sheet is reported in the profit and loss statement and is
listed at the beginning of inventory.
LET US REMEMBER:
Activity 1
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Accounts Classification
1. G.M. Capital
2. Land
3. Cash
4. Building
5. Accounts receivables
6. Delivery truck
7. Service Income
8. Sales
9. Prepaid Insurance
10. Accounts Payable
Activity 2
Direction: Prepare a cash flow statement and income statement
of school canteen business for the period August 1-31, 2008. Refer to
the business transactions given below.
BISCUCHO SANTINO
Cash Flow Statement
For the Period _____________
August 1-15 August 16-31
CASH FLOW
Cash investment
Cash Grants
Cash Sales
Collection of Receivables
TOTAL CASH FLOWS
LESS: Cash Outflows
Cash Purchases
Freight in
Permit & License
Electricity
Wages
Salary
LPG fuel
Rental
Payment of Payables
TOTAL CASH OUTFLOWS
Net Cash Indlows (Outflows)
Add: Cash balance beg.
Cash Balance Ending
BISCUCHO SANTINO
Income Statement
For the Period _____________
Sales
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Less Cost of Goods Sold
Raw Food and Merchandise Invent. (Beg.)
Add: Purchases
Transportation
Wages
LPG
Total
Less: Raw Food & Mdse. Invent. (End)
Cost of Goods Sold
Gross Profit
Less: Operating Expenses
Electricity/Water
Permit/License
Salary
Rental
Depreciation
Total Operating Expenses
Net Income for the Period
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It is always important to update and keep financial records and
reports. On your own perception express your point of view on the
importance of updating and maintaining financial records and reports
by completing the open sentences below:
POST TEST
B. MULTIPLE CHOICE:
Direction: Answer the questions honestly. Write the letter of
your choice in your notebook.
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4. It refers to the financial position of the business that
shows the assets, liabilities, and owner’s equity.
a. financial statement
b. balance sheet
c. income statement
d. journalizing
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RESOURCES:
- pencil
- calculator
- handouts
- writing materials
REFERENCES:
- Camposano, Jorge A. Entrepreneurship for Modern
Business Philippines, Copyright 2006
- Technology and Home Economics II SEDP Textbook First
Edition 1991
- Saguinsin,
Artemio T. Bookkeeping for beginners with Taxation Law,
Philippine Copyright 2006
- Feliciano Fajardo R. Entrepreneurship, Copyright 1994
- Pamphlets from DTI on Bookkeeping
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ANSWER KEY
A. MULTIPLE CHOICE
1. A
2. A
3. A
4. B
5. C
6. D
7. A
8. A
9. B
10. B
B. CLASSIFICATION
1. C
2. A
3. A
4. A
5. A
6. A
7. C
8. A/E
9. E
10. L
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ACKNOWLEDGMENT
Copyright Department of Education 2009
Writer/Facilitator:
Mr. Rene G. Delfino
Muntinlupa Business High School
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ACKNOWLEDGMENT
Copyright Department of Education 2009
Writer/Facilitator:
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ACKNOWLEDGMENT
Copyright Department of Education 2009
Writer/Facilitator:
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TABLE OF CONTENTS
Let Us Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Activity 1
Activity 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Let Us Remember
Let Us Apply What You Have Learned . . . . . . . . . . . . . . . . . . . . 15
Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Key to Correction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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