1 / 22

Chapter 3

Chapter 3. Journalizing Transactions . Objectives . Define accounting terms related to journalizng transactions Identify accounting concepts and practices related to journalizing transactions Record transactions to set up a business in a five column journal

ayame
Download Presentation

Chapter 3

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 3 Journalizing Transactions

  2. Objectives • Define accounting terms related to journalizng transactions • Identify accounting concepts and practices related to journalizing transactions • Record transactions to set up a business in a five column journal • Record transactions to buy insurance for cash and supplies on account in a five-column journal

  3. Objectives Con’t. • Record transactions that affect owner’s equity and receiving cash on account in a five-column journal • Prove and rule a five-column journal and prove cash

  4. Section 3 -1 Journals, Source Documents, and Recording Entries in a Journal

  5. Journals & Journalizing • Journals create a more permanent record of transactions • The nature of the business & the number of transactions to be recorded determines the kind of journal a business uses • Businesses usually make entries into the journal every day

  6. A Five-Column Journal • Special amount column – a journal amount column headed with an account title • special amount columns: • are used for transactions that occur frequently • Saves time and space • General amount column – a journal amount column that is not headed with an account title • Transactions in a journal are recorded in chronological order

  7. A Five-Column Journal Con’t. • Purpose is so that both parts of a transaction are recorded in 1 place • Can verify accuracy by checking it against the transaction data • Transactions are recorded in chronological order • Entry – information for each transaction recorded in a journal • double-entry accounting – the recording of debit and credit parts of a transaction

  8. A Five-Column Journal Con’t. • In double entry accounting: • Each trans affects at least 2 accts • It assures that debits = credits

  9. A FIVE-COLUMN JOURNAL page 57 LESSON 3-1

  10. Source Documents • They prove that the transaction did occur • 5 source documents • Checks • Used for all cash payments • Sales invoices • For sales on acct • aka sales ticket or sales slip • Prepared in duplicate; original goes to customer • Receipts • Used for sources other than sales • i.e. received cash from owner as an investment

  11. Calculator tapes • Lists the total sales of the day • It saves time and space be recording 1 entry for all the days sales • Memorandums (Memos) • Used when no other source document is prepared or when additional info is needed about a transaction • A brief note is written on it to describe the trans

  12. CHECKS page 58 LESSON 3-1

  13. SALES INVOICES page 58 LESSON 3-1

  14. calculator tape receipt memorandum OTHER SOURCE DOCUMENTS page 59 LESSON 3-1

  15. Journal Rules • Debits are ALWAYS listed first • Credits are listed second and must be indented • A new journal page is started when there is insufficient space on the last journal page to record a transaction • Journal entries should not be split

  16. Standard Accounting Practices • If an error is recorded, then cancel the error by neatly drawing a line through the incorrect item – write the correct item immediately above the canceled item • Sometimes an entire entry is incorrect and is discovered before recording the next trans; draw neat lines through all parts of the incorrect entry and journalize it correctly on the next blank lines

  17. Sometimes several entries are recorded after the incorrect entry is made; draw neat lines through all incorrect parts of the entry and record the correct items on the same lines as the incorrect items directly above them

  18. Words are only abbreviated when space is limited AND are written legibly • Do not use dollars & cent signs or decimal points • Always use 2 zeros for cents • A ruler is always used to draw lines

  19. Vocabulary • journal – a form for recording transactions in chronological order • journalizing – recording transactions in a journal • entry – information for each transaction recorded in a journal • general journal – a journal with two amount columns in which all kinds of entries can be recorded

  20. double-entry accounting – the recording of debit and credit parts of a trans • source document – a business paper from which info is obtained for a journal entry • check – a business form ordering a bank to pay cash from a bank account • invoice – A form describing the goods or services sold, the quantity, and the price

  21. sales invoice – an invoice used as a source document for recording a sale on account • receipt – a business form giving written acknowledgement for cash received • memorandum – a form on which a brief message is written describing a transaction

  22. Accounting Concepts • objective evidence – applied when a source document is prepared for each transaction

More Related