Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
GOOD MORNING!!
 Reminder: A business transaction is anytime
that an exchange of value happens within the
normal operation of a business
...
 The owner invests $20 000 into the business
Cash T. Rantula, Capital
20 000 20 000
 The concepts of “T-Accounts” remain
 Debits = Credits
 At least two accounts are affected
 But rather than entering t...
 Your personal diary
 The textbook says:
 “The journal records all parts of a transaction in
one place. The date, the d...
 Think of the stereotypical girl that enters her
thoughts into a journal every night before
bed
 The accountant loves to get his/her thoughts
and feelings (transactions) into his/her
journal as soon as something happe...
 ADVANTAGES
 The complete transaction is recorded in one
place
 Reduces Errors
 Easier to make a mistake in T-Accounts...
 This unit is all about the different steps of
the accounting cycle
 The accounting cycle is the process an
accountant g...
Transaction
Ledger
Trial
Balance
Adjusting
Entries
Financial
Statements
Closing
Entries
Date Particulars P
r
DR CR
Has four
steps:
• 1. Record the date
• 2. Record the account
debited and its amount
• 3. Record the account
credited and i...
 Summarize each transaction with words and
as short as possible
 Example: Owner invested cash
 Example: Made cash sale ...
 An increase in amount:
Debit Credit
Assets
Drawings
Expenses
Liabilities
Owner’s Equity
Revenue
 A decrease in amount:
Debit Credit
Liabilities
Owner’s Capital
Revenue
Assets
Drawings
Expenses
Account DEBIT CREDIT
Assets
Liabilities
Owner’s Equity
Drawings
Revenues
Expenses
 On October 1st the owner, T. Rantula invests
$20 000 into the business
 On October 4th the business sold $16 000
worth ...
Date Particulars P
r
DR CR
Oct 1 Cash 20 0 0 0 00
T. Rantula, Capital 20 0 0 0 00
Invested additional cash
4 Cash 16 0 0 0...
 BEGIN ON PAGE 112 in your text
 Question #1-3
 We will take up #1 in 15 minutes
Upcoming SlideShare
Loading in …5
×

3. journal entries

  • Login to see the comments

3. journal entries

  1. 1. GOOD MORNING!!
  2. 2.  Reminder: A business transaction is anytime that an exchange of value happens within the normal operation of a business  Every transaction must be recorded  Every transaction affects at least two accounts  Up to now:  We have been using T-Accounts  Debits = Credits
  3. 3.  The owner invests $20 000 into the business Cash T. Rantula, Capital 20 000 20 000
  4. 4.  The concepts of “T-Accounts” remain  Debits = Credits  At least two accounts are affected  But rather than entering transactions into the T-Accounts immediately, we use the General Journal
  5. 5.  Your personal diary  The textbook says:  “The journal records all parts of a transaction in one place. The date, the debit, the credit and an explanation for each transaction are recorded together.”  Can record manually or electronically
  6. 6.  Think of the stereotypical girl that enters her thoughts into a journal every night before bed
  7. 7.  The accountant loves to get his/her thoughts and feelings (transactions) into his/her journal as soon as something happens within the business.
  8. 8.  ADVANTAGES  The complete transaction is recorded in one place  Reduces Errors  Easier to make a mistake in T-Accounts (Debit but no credit, only one account, etc)  Transactions are listed in chronological order  Shows a picture of every day at the business
  9. 9.  This unit is all about the different steps of the accounting cycle  The accounting cycle is the process an accountant goes though during a fiscal periods  Begins with a business transaction  Ends with the preparation of the Financial Statements & Closing Entries
  10. 10. Transaction Ledger Trial Balance Adjusting Entries Financial Statements Closing Entries
  11. 11. Date Particulars P r DR CR
  12. 12. Has four steps: • 1. Record the date • 2. Record the account debited and its amount • 3. Record the account credited and its amount • 4. Record the explanation or details
  13. 13.  Summarize each transaction with words and as short as possible  Example: Owner invested cash  Example: Made cash sale of tickets  Example: Bought equipment on account  THIS IS A MUST FOR EACH AND EVERY TRANSACTION!
  14. 14.  An increase in amount: Debit Credit Assets Drawings Expenses Liabilities Owner’s Equity Revenue
  15. 15.  A decrease in amount: Debit Credit Liabilities Owner’s Capital Revenue Assets Drawings Expenses
  16. 16. Account DEBIT CREDIT Assets Liabilities Owner’s Equity Drawings Revenues Expenses
  17. 17.  On October 1st the owner, T. Rantula invests $20 000 into the business  On October 4th the business sold $16 000 worth of tickets
  18. 18. Date Particulars P r DR CR Oct 1 Cash 20 0 0 0 00 T. Rantula, Capital 20 0 0 0 00 Invested additional cash 4 Cash 16 0 0 0 00 Ticket Sales 16 0 0 0 00 Ticket sales for the week
  19. 19.  BEGIN ON PAGE 112 in your text  Question #1-3  We will take up #1 in 15 minutes

×