II.

Nature of Accounts

1.

Assets

Cash in bank- this includes demand deposit or checking account and savings
deposit which are unrestricted as to withdrawal
Debited for: Deposits, Credit memos
Credited for: Cash disbursements, Debit memos

Cash on hand- this includes undeposited cash collections and other cash
items awaiting deposit such as customers checks, cashiers or ,managers checks,
travellers check and money orders
Debited for: Cash receipts
Credited for: Payment for expenses and liabilities

Petty cash fund- money set aside to pay small expenses which to be paid
conveniently by means of check
Debited for: Establishment of fund, Increases in fund
Credited for: Decrease in petty cash fund

Office supplies- inventories to be consumed in performing administrative

function indirectly related to the rendering of services
Debited for: Purchase of supplies
Credited for: Returns or refund, recording of office supplies used

Playing supplies- the inventories consumed directly in the rendering of the

companys services
Debited for: Purchase of playing supplies
Credited for: Returns or refund, recording of playing supplies

Land- is a fixed asset of the company used as a business site

Debited for: Purchase or acquisition of the land

Credited for: Sale or disposal of land

Building- is a tangible asset, particularly an infrastructure for the use in the

supplies of services and are expected to be used during more than one period

Debited for: Acquisition, purchase, or construction of building

Credited for: Sale or disposition of building

Accumulated depreciation-building- cumulative amount of allocated

depreciation amount of the building for the period used
Debited for: Sale or retirement of the building
Credited for: Periodic depreciation of building

Office equipment this includes computers, adding machines, cash registers,

calculators and similar assets
Debited for: Acquisition or purchase of office equipment
Credited for: Sale or disposition of office equipment

Accumulated depreciation-office equipment- cumulative amount depreciated

of the equipment for the portion of useful life that lapsed
Debited for: Sale or retirement of office equipment
Credited for: Periodic depreciation of office equipment

Playing equipment- equipment directly used in business operations

Debited for: Acquisition or purchase of playing equipment

Credited for: Sale or disposition of playing equipment

Accumulated depreciation- playing equipment- cumulative amount of

depreciation of playing equipment for the period consummated
Debited for: Sale or retirement of playing equipment
Credited for: Periodic depreciation of playing equipment

Furniture and fixture- items considered as personal property unless affixed to

the real property, such as chairs, desks, and filing cabinets.
Debited for: Acquisition or purchase of furniture and fixtures
Credited for: Sale or disposition of furniture and fixtures

Accumulated depreciation- furniture and fixtures- cumulative amount of

depreciation pertaining to the use of furniture and fixtures over nits consummated
life
Debited for: Sale or retirement of furniture and fixtures

Credited for: Periodic depreciation of furniture and fixture

2.

Liabilities

Withholding tax payable

Debited for: Remittances to the BIR representing income taxes withheld from
employees salaries
Credited for: The amount deducted from employees salaries as employees income
tax on their compensation

SSS premium payable

Debited for: The amount of the employer and employees contribution remitted to
SSS
Credited for: The amount withheld from the employees salaries representing
employees personal contribution to SSS, the recognition of the employers SSS
contribution liability

Phil health premium payable

Debited for: The amount the employer and employees contribution remitted to Phil
Health
Credited for: The amount withheld from the employees salaries representing
personal contribution to Phil Health, the recognition of the employers Phil health
contribution liability

Pag-IBIG premium payable

Debited for: The amount of employers and employees contribution remitted to

Pag-IBIG
Credited for: The amount withheld from the employees salaries representing
personal contribution to Pag-IBIG, The recognition of the employers Pag-IBIG
contribution liability

Vat payable

Debited for: The amount of output Vat over input vat remitted to the BIR

Credited for: The net amount of output VAT aver input VAT recognized as a liability
by the company

Income tax payable

Debited for: The amount of income taxes paid to the BIR

Credited for: The amount of income tax liability recognized by the company

Utilities payable

Debited for: The amount of utilities paid to the respective collecting offices
Credited for: The amount of utilities recognized as liability
3.

Partners Capital

Debited for: Whenever there is withdrawal and whenever there is a net loss
Credited for: Whenever there is a net income and when additional investment
are made
4.

Income

Service income- income derived from rendering of service

Debited for: Closing the balance of the account to income summary

Credited for: Actual rendition of services to clients

Rent Income- income derived from leasing the space

Debited for: Amount of cash received from lessee

Credited for: Income from rent
5.

Operating expense

Operating expense

Debited for: Recognition and classification and classification of periodic operating

expense
Credited for: Closing the periodic operating expense to the income summary
account

Salaries expense

Debited for: The amount of salaries paid t the employees

Credited for: Closing the periodic balance to the Operating Expense Control Account

SSS employer contribution expense

Debited for: The amount of employer contribution paid

Credited for: Closing the periodic balance to the Operating Expense Control Account

PhilHealth employer Contribution Expense

Debited for: The amount of employer contribution paid

Credited fo: Closing the periodic balance to the Operating Expense Control Account

Pag-Ibig Employer contribution Expense

Debited for: The amount of employer contribution paid

Credited for: Closing the periodic balance to the Operating Expense Control Account

Business Taxes and Licenses- a fee paid to the government for the privilege of
being licensed to do business
Debited for: The amount of related business taxes and licenses paid by the
company
Credited for: Closing the periodic balance to the Operating Expense Control Account

Depreciation expense- the systematic allocation of the depreciable amount of

an asset over its useful life
Debited for: The amount of periodic depreciation of asset
Credited for: Closing the periodic balance to the Operating Expense Control Account

Office supplies expense- office supplies used

Debited for: The amount of office supplied purchased and actually used
Credited for: Closing the periodic balance to the Operating Expense Control Account

Playing supplies expense- playing supplies used

Debited for: The amount of playing supplies purchased and actually used
Credited for: Closing the periodic balance to the Operating Expense Control Account

Utilities expense- expense for consumption of electricity, water and

telecommunication services

Debited for: The total amount of utilizes for the period

Credited for: Closing the periodic balance to the Operating Expense Control Account

Advertising expense- expense attributed to the printing of flyers, banners and

the like
Debited for: The amount of advertisement expenses incurred for the period
Credited for: Closing the periodic balance to the Operating Expense Control Account
6.

Income Summary

Debited for: Closing the amount of net income to the partners capital
Credited for: Closing the amount of net loss to the partners capital