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JOURNAL: Organizing transactions

JOURNAL: Organizing transactions. Ref: Chapt. 6, p. 157-164 Practice p. 161 A) exercises # 1,2,3, B) exercises # 4,5,6. Journaling.

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JOURNAL: Organizing transactions

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  1. JOURNAL: Organizing transactions Ref: Chapt. 6, p. 157-164Practice p. 161 A) exercises # 1,2,3, B) exercises # 4,5,6

  2. Journaling • Business transactions have been recorded in ________________called. __________ . This can be cumbersome, and can result in the parts of a transaction being difficult to put back together. Thus accountants use a ________ to record business transactions _______ they are put into the ledger.

  3. Recall: What is double entry accounting? The value of the debit entry ALWAYS equals the value of the credit entry. What are the accounts and how are they affected by the following transaction: Schlecky buys $400 worth of widjits, pays cash What has happened if your DR does not equal your CR value for a transaction?

  4. Example: Ashley purchases a new delivery truck for her business. The truck costs $37,000. She pays $7000 down payment and puts the rest on credit

  5. DR CR Double entry accounting Date PR=Posting Reference Account affected by transaction When transaction occurred Total DR value must equal to the total CR value Account number Account affected by transaction A journal entry Match the Journal term with the definition

  6. TECHNIQUE OF JOURNALIZING What is significant about all of the circled info on the General Journal below? J1 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 2002 Sept. 1 Cash 15,000 M. Doucet, Capital 15,000 Invested cash in business. 1 Equipment 7,000 7,000 Cash Purchased equipment for cash. Complete the example

  7. TECHNIQUE OF JOURNALIZING The date of the transaction is entered in the date column. J1 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 2002 Sept. 1 Cash 15,000 M. Doucet, Capital 15,000 Invested cash in business. 1 Equipment 7,000 7,000 Cash Purchased equipment for cash.

  8. TECHNIQUE OF JOURNALIZING The debit account title is entered at the extreme left margin of the Account Titles and Explanation column. The credit account title is indented on the next line. J1 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 2002 Sept. 1 Cash 15,000 M. Doucet, Capital 15,000 Invested cash in business. 1 Equipment 7,000 Cash 7,000 Purchased equipment for cash.

  9. TECHNIQUE OF JOURNALIZING The amounts for the debits are recorded in the Debit column and the amounts for the credits are recorded in the Credit column. J1 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 2002 Sept. 1 Cash 15,000 M. Doucet, Capital 15,000 Invested cash in business. 1 Equipment 7,000 7,000 Cash Purchased equipment for cash.

  10. TECHNIQUE OF JOURNALIZING A brief explanation of the transaction is given. J1 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 2002 Sept. 1 Cash 15,000 M. Doucet, Capital 15,000 Invested cash in business. 1 Equipment 7,000 Cash 7,000 Purchased equipment for cash.

  11. TECHNIQUE OF JOURNALIZING A space is left between journal entries. The blank space separates individual journal entries and makes the journal easier to read. J1 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 2002 Sept. 1 Cash 15,000 M. Doucet, Capital 15,000 Invested cash in business. 1 Equipment 7,000 Cash 7,000 Purchased equipment for cash.

  12. TECHNIQUE OF JOURNALIZING The column entitled Ref. is left blank at the time the journal entry is made and is used later when the journal entries are transferred to the ledger accounts. J1 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 2002 Sept. 1 Cash 15,000 M. Doucet, Capital 15,000 Invested cash in business. 1 Equipment 7,000 Cash 7,000 Purchased equipment for cash.

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