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Entrepreneurship
Quarter 2 – Module 6
Business Records

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Entrepreneurship – Grade 12
Alternative Delivery Mode
Quarter 2 – Module 6: Business Records

First Edition, 2020

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Published by the Department of Education

Secretary: Leonor Magtolis Briones
Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Writer: Ronquilio G. Daño, LPT

Editor: Felicilda S. alipe
Management Team: Bianito A. Dagatan EdD, CESO V
Schools Division Superintendent

Casiana P. Caberte PhD

Assistant Schools Division Superintendent

Felix C. Galacio Jr. PhD

EPS, Mathematics

Josephine D. Eronico PhD

EPS, LRMDS

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 Lesson 1: Business Records

Learning Competencies: Identify the reasons for keeping business records

(CS_EP11/12B-ENTREP-IV-j-4)

At the end of the lesson, you are expected to:

 identify the reasons for keeping business records
 identify financial forms or records, and
 perform key bookkeeping tasks.

What is it?

A business record is a document (hardcopy or digital) that records business

dealings. A business record includes the following:
 meeting minutes
 memoranda
 employment contracts
 accounting source documents

IMPORTANCE OF KEEPING RECORDS

1. Monitor the progress of the business – this to closely monitor the progress
of the business like its improvements, which items are selling, and
changes to make.
2. Prepare the financial statements – this includes the income statement
and balance sheet
 Income statement shows the income and expenses of the business
for given period of time.
 Balance sheet shows the assets, liabilities, and equity in the
business on a given date.
3. Identify sources of income – this information will help to separate
business from non-business receipts and taxable form non-taxable.
4. Keep track of the deductible expenses – this will keep the record
especially the expenses that will greatly needed when preparing the tax
return.
5. Keep track as the basis in property – this record serves as the basis
amount of the investment in property for tax purposes.
6. Prepare the tax returns
7. Support items reported on the tax returns

What’s more?

Directions:
Pick out from the box the importance of keeping business records as
described in each item. Use the answer sheet provided.

a. monitor the progress of the business

b. prepare the financial statements
c. identify sources of income
d. keep track of the deductible expenses
e. keep track the basis in property

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 1. The good records need to prepare accurate financial statement.
2. The good records need to monitor the progress of a business.
3. The good records can identify the sources of income.
4. The good records can be a basis to figure gain or loss on disposition of
property.

Lesson 2: Financial Forms

What is it?

Financial forms/records usually have set of standards or reporting and any

differences are very minimal. Samples obtained from an existing similar project will
definitely prove helpful for your design requirements. These are:
 Accounts receivables – these are valuable not only to decision on
extension of credits, but also to make accurate billing and maintenance
of good relations with customer. These records will reveal how effective if
your firm’s credit and collection.
 Inventory records – these records will be used to control your inventory
items.
 Accounts payable – these liability records show what your firm owes.
 Sales records – these could be used in the analysis of the effectiveness in
advertising and promotions.
 Production records – these records provide a basis for your product
costing and detect lost profits/costs as a result of idle manpower.
 Payroll records – show the total payments you pay your employees and
provide a basis for computing some legal payments.
 Cash records – show all receipts and disbursements made by your firm.

SPECIFIC TYPES OF ACCOUNTING RECORDS

1. Journals

 Sales journal (sales book) – these are used to record your company’s
sales.
 Purchase journal (purchase book) – these are used to record your
company’s purchase.
 Cash receipts journal (cash receipts book) – these are used to record your
company’s cash receipts
 Cash payments journal (cash payments book or cash disbursement book) –
these are used to record your company’s payment in cash.
 General journal – these are used to your company’s transaction
mentioned in a, b, and c.

2. Ledgers

 Accounts receivable ledgers – contain your company’s individual trade

with customer.
 Accounts payable ledgers – contain your company’s individual accounts
with creditors.
 Plant ledgers – contain your company’s list of all fixed assets.

What’s more?
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Directions:
Pick out from the box the financial forms or records as described in each
item. Use the answer sheet provided.

a. Accounts receivables
b. Inventory records
c. Accounts payable
d. Sales records
e. Cash records

1. This refers to the amount collectible from the customers.

2. This includes debts arising from the purchases.
3. This record contains firm’s cash flow and petty cash balances.
4. This record serves as the basis for computing salesmen’s
compensation.

Lesson 3: Bookkeeping

What is it?

Bookkeeping is the recording of financial transactions, and is part of the

process of accounting in business. Transactions include purchases, sales, receipts,
and payments by an individual person or an organization or corporation. Bookkeeping
is usually performed by a bookkeeper.

BOOKKEEPER
 A person who records the day-to-day financial transactions of
business
 He is responsible for writing the daybooks which contain records
of purchases, sales receipts, and payments
 He is responsible for ensuring that all transaction whether it is
cash transaction or credit transaction are recorded

RECORDING TRANSACTIONS

Bookkeeping involves the recording of the financial transactions. The

transactions will have to be identified, approved, sorted and stored in a manner
so they can be retrieved and presented in the financial statement of the
company’s and other reports.

Here are few examples of some of the financial transactions of a

company:

 Purchase of office supplies with cash

Account Title Debit Credit

Office supplies P xxx
Cash P xxx

 Purchase of office supplies on credit

Account Title Debit Credit
Office supplies P xxx

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 Accounts payable P xxx
 Paid rent for the business office used for the month
Account Title Debit Credit
Rent expense P xxx
Cash P xxx
 Borrow money from the bank
Account Title Debit Credit
Cash P xxx
Loan Payable P xxx

What’s more?

Directions:
Using the following situation, prepare recording transactions.

1. Bought office supplies worth P800, 000 in cash.

2. Bought office supplies worth P600, 000 on credit.
3. Paid Mr. Daño, building owner amounting to P50, 000 for the
rent of the month.
4. Borrow money amounting to P1,000,000 from EastWest Bank
as additional capital.

Assessment

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Direction: Read each item carefully and write the letter of your choice on your answer
sheet.

1. This refers to a person who records the day-to-day financial transactions of

business
A. accountant C. bookkeeper
B. financial adviser D. cashier
2. This refers to the recording of financial transactions, and is part of the
process of accounting in business.
A. accounting C. financing
B. bookkeeping D. investing
3. These records will reveal how effective if your firm’s credit and collection.
A. accounts receivables C. sales records
B. accounts payable D. payroll records
4. This includes the income statement and balance sheet
A. identify sources of income C. prepare the financial statements
B. prepare the tax returns D. monitor the progress of the business
5. This refers to a document that records business dealings.
A. business plans C. business journals
B. business forms D. business records
6. This refers to information that will help to separate business from non-
business receipts and taxable form non-taxable.
A. monitor the progress of the business C. identify sources of income
B. prepare the financial statements D. prepare the tax returns
7. These records provide a basis for the product costing and detect lost
profits/costs as a result of idle manpower.
A. production records C. sales records
B. payroll records D. cash records
8. These shows the total payments paid to employees and provide a basis for
computing some legal payments.
A. cash records C. sales records
B. payroll records D. production records
9. These are used to record company’s sales.
A. sales records C. cash records
B. production records D. payroll records
10. These are used to record company’s payment in cash.
A. cash payments journal C. payment journal
B. sales journal D. general journal

Answer Sheet

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Name: __________________________________________________________
Grade & Section: ________________ Score: _______

Quarter 2 – Module 6

Lesson 1
What’s more?
1.
2.
3.
4.

Lesson 2
What’s more?
1.
2.
3.
4

Lesson 3
What’s more?
Account Title Debit Credit
1.

2.

3.

4.

Assessment

1. 2. 3. 4. 5. 6. 7.

8. 9. 10.

References

Dr. Marife Agustin-Acierto (2017). Entrepreneurship. Room 215 ICP Building,

CabildoSt., Intramuros Manila: Unlimited Books Library Services and Publishing, Inc.
ENTREPRENEURSHIP 11 & 12
SUMMATIVE TEST 3

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Direction: Read each item carefully and write the letter of your choice on your answer
sheet.

1. This refers to the digital machines needed for optimum business operations.
A. process C. equipment
B. location D. staffing
2. This refers to the place where the business operation is happening.
A. staffing C. location
B. equipment D. process
3. This refers to any activity that you cannot drop on your foot.
A. product C. goods
B. service D. income
4. This refers to something you can pin point at.
A. goods C. income
B. product D. service
5. This is to have a long interval between repeat purchased because of the long-
lasting nature of the product.
A. durable C. services
B. non-durable D. perishable
6. These are essentially tangible because there are no physical products involved.
a. perishable C. non-durable
b. services D. durable
7. This is to have stronger repeat purchases because products are consumable
A. non-durable C. durable
B. services D. perishable
8. This refers to a person who records the day-to-day financial transactions of
business
A. accountant C. bookkeeper
B. financial adviser D. cashier
9. This refers to the recording of financial transactions, and is part of the process
of accounting in business.
A. accounting C. financing
B. bookkeeping D. investing
10.These records will reveal how effective if your firm’s credit and collection.
A. accounts receivables C. sales records
B. accounts payable D. payroll records
11.This includes the income statement and balance sheet
A. identify sources of income C. prepare the financial statements
B. prepare the tax returns D. monitor the progress of the business
12.This refers to a document that records business dealings.
A. business plans C. business journals
B. business forms D. business records
13.This refers to information that will help to separate business from non-business
receipts and taxable form non-taxable.
A. monitor the progress of the business C. identify sources of income
B. prepare the financial statements D. prepare the tax returns
14.These records provide a basis for the product costing and detect lost
profits/costs as a result of idle manpower.
A. production records C. sales records
B. payroll records D. cash records
15.These shows the total payments paid to employees and provide a basis for
computing some legal payments.
A. cash records C. sales records
B. payroll records D. production records