This document discusses accounting concepts and processes including: 1. The key accounting documents used in transactions such as invoices, cash bills, credit notes, and debit notes. 2. The basic steps in the accounting cycle including recording transactions in a journal, transferring information to ledger accounts, preparing a trial balance, adjusting entries, preparing financial statements and reports. 3. Details on journals, including their purpose to disclose full transaction effects and provide a chronological record, with debits and credits balancing. 4. An example of a simple journal entry and compound journal entry.

2. 1.Source of
Documents 2.Journal 3.Ledger
7.Financial
Statements
5.Adjustment
6.AdjustedTrial
Balance
4.Trial Balance
8.Financial
Reports/Annual
Reports

3. Invoices
i. Used in Credit
transactions only
ii. Issued by seller

4. Cash Bills
i. Used in cash
transactions only
ii. Issued by seller

5. Credit Note
i. Used to inform buyer
that his or her account
has been credited with
the stated amount
ii. Usually issue when
there is sales return or
when the price is
overstated

6. Debit Note
i. Used to inform buyer
that his or her account
has been debited with
the stated amount
ii. Usually issue when the
sales price is
understated

7. Receipts
i. Issued by a receiver of
payment to the payer
for payment made by
cash or cheque

8. Business documents, such as a sales slip, a check, a bill, or a cash register
tape, provide evidence of the transaction.
Analyze each transaction Enter transaction in a journal
Transfer journal information to
ledger accounts
Illustration 2-12

9. Statement of Financial Position Income Statement
= + -
Asset Liability Equity Revenue Expense
Debit
Credit

10. Book of original entry.
Transactions recorded in chronological order.
Contributions to the recording process:
1. Discloses the complete effects of a transaction.
2. Provides a chronological record of transactions.
3. Helps to prevent or locate errors because the debit and credit
amounts can be easily compared.

11. Journalizing - Entering transaction data in the journal.
Illustration: On September 1, Ray Neal invested RM15,000
cash in the business, and Softbyte purchased computer
equipment for RM7,000 cash.
Account Title Ref. Debit Credit
Date
Cash
R. Neal, Capital
Sept. 1 15,000
15,000
General Journal
Computer equipment
Cash
7,000
7,000

12. Simple and Compound Entries
Illustration: Assume that on July 1, Butler Company purchases
a delivery truck costing RM14,000. It pays RM8,000 cash now
and agrees to pay the remaining RM6,000 on account.
Account Title Ref. Debit Credit
Date
Delivery equipment
Cash
Sept. 1 14,000
8,000
General Journal
6,000
Accounts payable

13. Any
Questions?