Transactions, Posting & the Eight-Column Worksheet

1. Transactions, Posting & the Eight-Column Worksheet

2. Case Development-Step 7: Journalizing Business Transactions • Account names need to be entered ONLY if there is NOT a special column. • Mini-Case • One line is sufficient for most transactions. • Exception - purchasing a computer system on account from Computers, Inc. requires two entry lines in the general columns. • If two special columns are used, such as debiting CASH and crediting REVENUE, a check mark is placed in the ACCOUNT column

3. Case Development-Step 7: Journalizing Transactions (continued) • Record the given transactions within the journal.

4. Case Development-Step 8: Posting • After recording the transactions in the journal, they need to be posted to the General Ledger. • Before posting the journal entries, ensure the Cash (debit), Supplies (debit), and <Owner’s Name>, Capital (credit) ledger accounts have a Beginning Balance. • Post only the totals of the three special columns (Revenue, Cash debit, and Cash credit). • For the General column, each transaction must be posted individually.

5. Eight-Column Worksheet • Facilitates the preparation of financial statements. • Used to record the end-of-cycle account balance of each General Ledger account (Trial Balance). • Used to identify adjusting entries and then distribute these account balances to the appropriate financial statement columns (Balance Sheet & Income Statement). • Used to assign adjusted trial balances to the appropriate financial statement. • The first-step in preparing the worksheet is to record the General Ledger account balances in the Trial Balance columns (covered in next slide show). • See the provided solutions