Category 1
What is the basic accounting equation?
Assets = Liabilities + Equity
Which journal records all cash received by the business?
Cash Receipt Journal (CRJ)
Give one example of a source document.
Official Receipt (Other acceptable answers: Service Invoice, Check Voucher, Check, Statement of Account, Payroll Summary, Delivery Receipt, Purchase Invoice, Credit Memo, Sales Invoice.)
What does RJ stand for?
Revenue Journal
What does CRJ stand for?
Cash Receipt Journal
What is the first step in the bookkeeping process?
Arrange the source documents in chronological order and compile the attachments according to the nature of each transaction.
Why are source documents important?
They serve as evidence of business transactions and are used to record transactions in the appropriate journals.
Which journal is used when a company pays rent by check?
Cash Disbursement Journal (CDJ)
What account is debited when PHP 10,000 rent is paid by check?
Rent Expense — Debit PHP 10,000
What account is credited when PHP 10,000 rent is paid by check?
Cash — Credit PHP 10,000
A company issues a service invoice to a client, but the client has not yet paid. Which journal should record the transaction?
Revenue Journal (RJ)
Why is the service invoice recorded in the Revenue Journal instead of the Cash Receipt Journal?
Because the service has already been rendered, but the client has not yet made the payment.
A customer pays PHP 15,000 in cash for services rendered on the same day. Which journal is used?
Cash Receipt Journal (CRJ)
In the PHP 15,000 cash service transaction, which account is debited and which is credited?
Debit: Cash PHP 15,000; Credit: Service Revenue PHP 15,000.
After transactions are recorded in the journals, what is the next step?
Post them to the General Ledger.
Why is posting transactions to the General Ledger important?
It summarizes all transactions and determines the running balance of each account, which is later used to prepare the worksheet and financial statements.
Why are Revenue Journal transactions posted to the Accounts Receivable Subsidiary Ledger?
To track and record each client's outstanding balance with the company.
A company paid PHP 10,000 rent by check. Identify the journal, debit, and credit.
CDJ; Debit Rent Expense PHP 10,000; Credit Cash PHP 10,000.
Office equipment has a depreciation rate of 15% per annum. What information from the General Ledger is needed to calculate depreciation expense?
The total running balance of the Office Equipment account.
What is the formula shown in the review for calculating monthly depreciation expense?
Equipment Balance × Depreciation Percentage ÷ 12 = Monthly Depreciation Expense.
A client receives a service invoice but has not paid yet. Which journal is used, and what does the transaction represent?
Revenue Journal. It represents a service already rendered with payment still outstanding.
A customer pays PHP 15,000 cash for services rendered on the same day. If Cash is debited, what account must be credited and why?
Service Revenue is credited PHP 15,000 because the business earned revenue from providing the service.
Put these bookkeeping steps in the correct order: Post to General Ledger → Arrange source documents → Record in journals.
1. Arrange source documents → 2. Record in journals → 3. Post to General Ledger.
The Office Equipment balance is PHP 200,000 and the annual depreciation rate is 15%. Using the formula in the PPT, what is the monthly depreciation expense?
PHP 2,500 → PHP 200,000 × 15% ÷ 12
A transaction has been recorded in the Revenue Journal. Why might the same transaction also appear in the Accounts Receivable Subsidiary Ledger?
Because the Revenue Journal records the transaction, while the Accounts Receivable Subsidiary Ledger tracks the individual client's outstanding balance.