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Accounting Chapter 3. Journalizing Transactions Kayla Wegley. Basic Terms. Journal: A form for recording transactions in chronological order Journalizing: Recording transactions Special Amount Column: Account with a heading in the journal
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Accounting Chapter 3 Journalizing Transactions Kayla Wegley
Basic Terms • Journal: A form for recording transactions in chronological order • Journalizing: Recording transactions • Special Amount Column: Account with a heading in the journal • General Amount Column: Account without a heading in the journal • Source document: Business paper from which information is obtained for an entry • Proving cash: Determining that the amount of cash agrees with the accounting records
Types of Source Documents Check Memorandum Sales Invoice Receipt
Journalizing Transactions • Each transaction must be journalized with the date, Account Title, Document number, and a credit and debit entry to a general column, and a cash or sales column.
Journalizing an Investment • Account title is business owners name • Source document is a receipt • Credit to general, debit to cash Debit Credit Debit Credit
Journalizing Purchases, On Account Purchases • A purchase made with Cash is titled with the account to purchase was made to, debited in general, and credited in cash • Purchases made on account are journalized only in the general column because no cash is leaving the business Debit Credit Debit Credit Debit Credit Debit Credit
Journalizing Sales • Journalizing Sales will utilize the Sales Credit column and the Cash Debit Column. Source document number will always be the day of the month. A check mark is used for the account title, and in the Post Reference Column Debit Credit Debit Credit Sales
Journalizing Selling Services on Account, Paying for Expenses, and Owner Withdrawals • Services on account are titled with the business sold to, debited to general, and credited to Sales • Expenses are debited to general, and credited to cash • Drawing is debited to general, and credited to cash Debit Credit Debit Credit Sales Debit Credit Debit Credit Debit Credit Debit Credit
Proving the Journal • To prove a journal page, debits and credits must be verified to be equal Each column of journal
Ruling a Journal, and Beginning a New Page • At the end of each journal page, each column must be totaled and double ruled underneath. • Totals are labeled at the end of the new page “carried forward” and at the beginning of the new page “brought forward” • At the end of the fiscal period, the last journal page is totaled in each column, and then double ruled