The document discusses the recording process in accounting. It covers key concepts like accounts, debits and credits, journals, ledgers, and posting. It explains that accounts track increases and decreases to specific items, and that debits and credits are used according to rules to record transactions. Journal entries are made for each transaction and then posted to ledger accounts to update balances. The steps of journalizing, posting, and preparing a trial balance are important parts of the recording process.
The document discusses the basic steps in the accounting recording process:
1. Transactions are recorded in a journal which shows debits and credits.
2. Journal entries are then posted to individual accounts in the general ledger.
3. Accounts in the general ledger track increases and decreases to assets, liabilities, equity, revenues and expenses through debit and credit entries.
The document provides an overview of the accounting recording process. It discusses key concepts like accounts, debits and credits, journals, ledgers, and the steps involved in recording transactions. Specifically, it covers:
- What accounts are and how they are used to record increases and decreases in assets, liabilities, and equity.
- How transactions are initially recorded in journals before being transferred to ledger accounts.
- The purpose of ledgers and how they contain all asset, liability, and equity accounts.
- The basic steps of analyzing transactions, journalizing them, and then posting to ledger accounts.
So in summary, the document outlines the fundamental components and process of recording business transactions in accounting from
The document summarizes accounting concepts related to the recording process. It discusses [1] accounts and how they are used to record transactions, [2] debits and credits and how they affect account balances, and [3] the basic steps in recording transactions, including journalizing, posting to ledgers, and preparing a trial balance.
1) The document discusses the accounting process and how to analyze and record business transactions. It explains the key steps which include examining source documents, analyzing transactions using debits and credits, recording transactions in a journal, posting to ledgers, and preparing a trial balance.
2) An example transaction is provided to demonstrate how to apply the accounting equation to identify impacts on asset, liability and equity accounts and how to record the journal entry and post to ledger accounts.
3) The revenue recognition principle is explained as recognizing revenue when it is earned rather than when payment is received. An example transaction illustrates revenue being recognized with a receivable recorded before cash is received.
The document discusses journalizing, which is the process of recording business transactions in a journal. It describes the key components of a journal entry such as the date, account titles, debits and credits, and an explanation. It also outlines the accounting cycle and explains rules for debit and credit, such as how different types of accounts are impacted by debits versus credits. Journalizing ensures all effects of a transaction are properly recorded through debits and credits to update relevant accounts.
Accounts project on Ledger and Trial BalanceYash Trivedi
A ledger is an accounting book that records journal entries in individual accounts in chronological order. There are three main types of ledgers: the purchase ledger, which records supplier accounts and purchases; the sales ledger, which records customer accounts and sales; and the general ledger, which organizes transactions from all journals. A trial balance is a worksheet that compiles the debit and credit balances of all ledger accounts to check that the accounting entries are mathematically correct. An unbalanced trial balance indicates there is an error in the accounting process, while a balanced trial balance means the debit and credit totals match.
Accounting Cycle - Ledgers - Capturing accounting eventFaHaD .H. NooR
What is a general ledger account?
A general ledger account is an account or record used to sort and store balance sheet and income statement transactions. Examples of general ledger accounts include the asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and Equipment. Examples of the general ledger liability accounts include Notes Payable, Accounts Payable, Accrued Expenses Payable, and Customer Deposits. Examples of income statement accounts found in the general ledger include Sales, Service Fee Revenues, Salaries Expense, Rent Expense, Advertising Expense, Interest Expense, and Loss on Disposal of Assets.
Some general ledger accounts are summary records which are referred to as control accounts. The detail that supports each of the control accounts will be found outside of the general ledger in what is known as a subsidiary ledger. For example, Accounts Receivable could be a control account in the general ledger, and there will be a subsidiary ledger which contains each customer's credit activity. The general ledger accounts Inventory, Equipment, and Accounts Payable could also be control accounts and for each there will be a subsidiary ledger containing the supporting detail.
Chapter 2, Fundamentals of Accounting I (2).pptxKalkaye
This document provides an overview of the accounting cycle for service businesses. It discusses key concepts like accounts, debits and credits, journals, ledgers, and the steps in the recording process. The recording process involves analyzing transactions, recording them in a journal, and then posting the journal entries to the appropriate accounts in the general ledger. Adjusting entries, preparing an adjusted trial balance, and closing entries are also part of the full accounting cycle.
The document discusses the basic steps in the accounting recording process:
1. Transactions are recorded in a journal which shows debits and credits.
2. Journal entries are then posted to individual accounts in the general ledger.
3. Accounts in the general ledger track increases and decreases to assets, liabilities, equity, revenues and expenses through debit and credit entries.
The document provides an overview of the accounting recording process. It discusses key concepts like accounts, debits and credits, journals, ledgers, and the steps involved in recording transactions. Specifically, it covers:
- What accounts are and how they are used to record increases and decreases in assets, liabilities, and equity.
- How transactions are initially recorded in journals before being transferred to ledger accounts.
- The purpose of ledgers and how they contain all asset, liability, and equity accounts.
- The basic steps of analyzing transactions, journalizing them, and then posting to ledger accounts.
So in summary, the document outlines the fundamental components and process of recording business transactions in accounting from
The document summarizes accounting concepts related to the recording process. It discusses [1] accounts and how they are used to record transactions, [2] debits and credits and how they affect account balances, and [3] the basic steps in recording transactions, including journalizing, posting to ledgers, and preparing a trial balance.
1) The document discusses the accounting process and how to analyze and record business transactions. It explains the key steps which include examining source documents, analyzing transactions using debits and credits, recording transactions in a journal, posting to ledgers, and preparing a trial balance.
2) An example transaction is provided to demonstrate how to apply the accounting equation to identify impacts on asset, liability and equity accounts and how to record the journal entry and post to ledger accounts.
3) The revenue recognition principle is explained as recognizing revenue when it is earned rather than when payment is received. An example transaction illustrates revenue being recognized with a receivable recorded before cash is received.
The document discusses journalizing, which is the process of recording business transactions in a journal. It describes the key components of a journal entry such as the date, account titles, debits and credits, and an explanation. It also outlines the accounting cycle and explains rules for debit and credit, such as how different types of accounts are impacted by debits versus credits. Journalizing ensures all effects of a transaction are properly recorded through debits and credits to update relevant accounts.
Accounts project on Ledger and Trial BalanceYash Trivedi
A ledger is an accounting book that records journal entries in individual accounts in chronological order. There are three main types of ledgers: the purchase ledger, which records supplier accounts and purchases; the sales ledger, which records customer accounts and sales; and the general ledger, which organizes transactions from all journals. A trial balance is a worksheet that compiles the debit and credit balances of all ledger accounts to check that the accounting entries are mathematically correct. An unbalanced trial balance indicates there is an error in the accounting process, while a balanced trial balance means the debit and credit totals match.
Accounting Cycle - Ledgers - Capturing accounting eventFaHaD .H. NooR
What is a general ledger account?
A general ledger account is an account or record used to sort and store balance sheet and income statement transactions. Examples of general ledger accounts include the asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and Equipment. Examples of the general ledger liability accounts include Notes Payable, Accounts Payable, Accrued Expenses Payable, and Customer Deposits. Examples of income statement accounts found in the general ledger include Sales, Service Fee Revenues, Salaries Expense, Rent Expense, Advertising Expense, Interest Expense, and Loss on Disposal of Assets.
Some general ledger accounts are summary records which are referred to as control accounts. The detail that supports each of the control accounts will be found outside of the general ledger in what is known as a subsidiary ledger. For example, Accounts Receivable could be a control account in the general ledger, and there will be a subsidiary ledger which contains each customer's credit activity. The general ledger accounts Inventory, Equipment, and Accounts Payable could also be control accounts and for each there will be a subsidiary ledger containing the supporting detail.
Chapter 2, Fundamentals of Accounting I (2).pptxKalkaye
This document provides an overview of the accounting cycle for service businesses. It discusses key concepts like accounts, debits and credits, journals, ledgers, and the steps in the recording process. The recording process involves analyzing transactions, recording them in a journal, and then posting the journal entries to the appropriate accounts in the general ledger. Adjusting entries, preparing an adjusted trial balance, and closing entries are also part of the full accounting cycle.
i have made this ppt for my college ,,i will share this for those gyes who want a specimen of bfa subject
and this slide making crdt goes to my sir.. thank you sir
Accounting Cycle - Journals - Capturing accounting eventFaHaD .H. NooR
What is the accounting cycle?
The accounting cycle is often described as a process that includes the following steps: identifying, collecting and analyzing documents and transactions, recording the transactions in journals, posting the journalized amounts to accounts in the general and subsidiary ledgers, preparing an unadjusted trial balance, perhaps preparing a worksheet, determining and recording adjusting entries, preparing an adjusted trial balance, preparing the financial statements, recording and posting closing entries, preparing a post-closing trial balance, and perhaps recording reversing entries.
Cycle and steps seem to be a carryover from the days of manual bookkeeping and accounting when transactions were first written into journals. In a separate step the amounts in the journal were posted to accounts. At the end of each month, the remaining steps had to take place in order to get the monthly, manually-prepared financial statements.
Today, most companies use accounting software that processes many of these steps simultaneously. The speed and accuracy of the software reduces the accountant's need for a worksheet containing the unadjusted trial balance, adjusting entries, and the adjusted trial balance. The accountant can enter the adjusting entries into the software and can obtain the complete financial statements by simply selecting the reports from a menu. After reviewing the financial statements, the accountant can make additional adjustments and almost immediately obtain the revised reports. The software will also prepare, record, and post the closing entries
The document summarizes key aspects of the accounting recording process. It explains that the recording process involves (1) analyzing transactions, (2) journalizing transactions by recording them in a journal, and (3) posting journal entries to individual accounts in the general ledger. It also describes what a journal and general ledger are and how they are used. The chapter concludes by explaining what a trial balance is and that its purpose is to ensure total debits equal total credits.
presentation slide on Accounting General ledger & trial balanceDaySpring Limited
This presentation discusses the general ledger, trial balance, and their purpose and process. The general ledger contains all balance sheet accounts and records transactions through debits and credits. A trial balance is created by summing the balances of each ledger account and comparing total debits to total credits to check for errors. An example transaction is provided to demonstrate preparing ledger accounts and a trial balance.
Accounting general ledger and trail balance presentation slide DaySpring Limited
This document provides an overview of general ledgers, trial balances, and the accounting process. It defines general ledgers and trial balances, explains how to prepare ledger accounts and post transactions, and describes how an unbalanced or balanced trial balance can indicate errors in the accounting process. Examples are provided to illustrate key concepts like preparing a trial balance and detecting errors.
BASIC ACCOUNTING FOR ALL INCLUDING MANAGERS. ACCOUNTING, DOUBLE ENTRY SYSTEM, JOURNEL (defination,advantages/limitations, how to make,) TRAIL BALANCE(defination,limitations/advantages, steps}
Financial accounting mgt101 power point slides lecture 06Abdul Wadood Ansary
This document discusses the basic accounting process and books of accounts. It explains that transactions are first recorded in vouchers and then the general journal. The general journal records are then posted to individual accounts in the general ledger. The general ledger contains T-accounts for each ledger account, where debits and credits from transactions are recorded. The balance of each ledger account, which is the difference between total debits and credits, represents the net amount for that account.
The document describes the accounting cycle and process of journalizing business transactions. It explains that companies initially record transactions in chronological order in a general journal. Journalizing involves making separate entries for each transaction with the date, accounts and amounts to be debited and credited, and an explanation. Journal entries can be simple, involving two accounts, or compound, involving three or more accounts. Sample transactions are provided as an example of journalizing entries.
The document discusses the income statement and how it is used to report revenues and expenses to calculate income over an accounting period. Revenues increase retained earnings and are recorded as credits, while expenses decrease retained earnings and are recorded as debits. The income statement classifies expenses as operating or non-operating and reports gross profit, operating income, income before taxes, and net income. It also discusses the retained earnings statement and how the journal and ledger are used to record transactions that affect account balances over time.
The document discusses accounting journals and ledgers. It explains that journals are used to initially record transactions in chronological order, while ledgers provide a complete record of financial transactions over the life of a company. It also distinguishes between general ledgers, which provide a summary of all financial transactions, and subsidiary ledgers, which store specific transaction types to avoid cluttering the general ledger. Finally, it emphasizes that every transaction in a subsidiary ledger is periodically summarized and posted to a corresponding general ledger account.
ACCOUNTING PRINCIPLES 1. Which of the following is not a core financial statement?
a. The Income Statement
b. Statement of Cash Flows
c. The Trial Balance
d. The Balance Sheet
2. The income statement, which presents the results of operations, can be prepared in many forms including:
a. Single Step Income Statement
b. Condensed Income Statement
c. Common Sized Income Statement
d. All of the above
3. Which of the following account types increase by debits in double-entry accounting?
a. Assets, Expenses, Losses
b. Assets, Revenue, Gains
c. Expenses, Liabilities, Losses
d. Gains, Expenses, Liabilities
4. Which of the following is true?
a. Accounts receivable are found in the current asset section of a balance sheet.
b. Accounts receivable increase by credits.
c. Accounts receivable are generated when a customer makes payments.
d. Accounts receivable become more valuable over time.
5. A company that uses the cash basis of accounting will:
a. Record revenue when it is collected.
b. Record revenue when it is earned.
c. Record revenue at the same time as accounts receivable.
d. Record bad debt expense on the income statement.
6. What are the main sections on a balance sheet?
a. Assets, liabilities, income
b. Assets, liabilities, equity
c. Assets, liabilities, expenses
d. Assets, gains, revenue
7. How are a company’s financial statements used?
a. For internal analysis
b. For external negotiation
c. For compliance
d. All of the above
8. Which of the following scenarios increases accounts payable?
a. A customer fails to pay an invoice.
b. A supplier delivers raw materials on credit.
c. Office supplies are purchased with cash.
d. None of the above
9. Which of the following must a certified public accountant (CPA) have in-depth knowledge of to pass the CPA licensing exam? (Check all that apply.)
a. Accounting software packages
b. Auditing
c. Derivatives
d. International banking laws
10. What is the result of the following transaction for Company A? Company A’s customer is unable to pay for a previous credit sale in accordance with Company A’s 90-day payment terms. The customer makes a promissory note to Company A that extends payment over a 24-month term including 5% interest.
a. No result because the customer didn’t pay.
b. Accounts receivable increases because of the interest.
c. A note receivable is recorded in non-current assets.
d. Company A records the loan as a liability.
11. When are liabilities recorded under the accrual basis of accounting?
a. When incurred
b. When paid
c. At the end of the fiscal year
d. When bank accounts are reconciled
12. Which is true about time in accounting?
a. Current liabilities are debts payable within 2 years.
b. Balance sheets reflect a company’s financial position at a certain point in time.
c. The time value of money is a finance concept, not relevant in accounting.
d. Accounts receivable are more easily collected as time passes.
13. When a company purchases property, plant, and equipment, how is it reflected on the
This document provides an overview of bookkeeping concepts including:
- Chart of accounts which lists account names for recording transactions. Common sections include assets, liabilities, equity, income and expenses.
- T-accounts which are used to record changes to account balances, with debits on the left and credits on the right.
- Rules of debit and credit which specify whether increases and decreases to different types of accounts are recorded as debits or credits. For assets, increases are debits and decreases are credits.
Several examples then demonstrate how to analyze transactions and apply debits and credits to the appropriate T-accounts.
The general journal is used to record transactions not recorded in specialty journals. It provides a chronological record of non-specialized entries. Examples include asset sales, depreciation, interest income/expense, and stock sales. The document also provides an example general journal entry and explains the format for recording debit/credit journal entries with date, account titles, amounts, and narration.
This document contains a presentation on accounting concepts and principles. It defines accounting and discusses key accounting concepts such as business entity, money measurement, accounting period, cost, dual aspect, matching, realization and full disclosure. It also covers accounting principles including consistency, materiality, conservatism and double entry system. The document concludes with explaining accounting processes such as journal, ledger, trial balance and financial statements including trading account, profit and loss account and balance sheet. It also discusses ratio analysis and different types of ratios to analyze business performance.
Accounting Cycle - Trial Balance - Easy AccountingFaHaD .H. NooR
1. The accounting cycle involves journalizing transactions, posting entries to ledger accounts, preparing a trial balance to check that debits equal credits, making adjustments, and generating financial statements.
2. A trial balance lists accounts and balances to prove that total debits equal total credits, but it does not guarantee the ledger is correct as errors can still exist.
3. Net income represents the increase in owners' equity from profits over the lifetime of a business, and is reflected in the Retained Earnings account rather than as an asset.
Here are the steps to analyze and post a journal entry:
1. Analyze the journal entry to determine the accounts involved and whether each account increased or decreased.
2. Determine if each account is an asset, liability, equity, revenue or expense account based on the general ledger chart of accounts.
3. Translate increases in asset and expense accounts and decreases in liability, equity and revenue accounts into debits, and increases in liability, equity and revenue accounts and decreases in asset and expense accounts into credits.
4. Record the debits and credits in the appropriate general ledger accounts.
Posting
Question
LO 6
NetSolutions records business transactions using double-entry accounting. Transactions include Chris Clark investing $25,000 cash in the business, purchasing $20,000 of land, buying $1,350 of supplies on account, earning $7,500 in fees, paying $3,650 in expenses, paying $950 to creditors, using $800 of supplies, and Chris Clark withdrawing $2,000 cash. Debits and credits are equal for each transaction to maintain the accounting equation of assets = liabilities + owner's equity.
This document provides an overview of topics covered in ACCT 101 Accounting and Financial Management for weeks 1 and 2. It discusses the differences between not-for-profit and for-profit organizations, the importance and purpose of accounting, accounting terminology and language, the double-entry accounting system, the accounting equation, accrual versus cash basis accounting, and the development of financial reporting standards. Key accounting concepts such as assets, liabilities, revenues, and expenses are defined. Examples are also provided to demonstrate how to record accounting transactions and how transactions affect the accounting equation.
The document provides an introduction to books of accounts used in accounting. It discusses the general journal as the book of original entry where transactions are initially recorded. It also discusses special journals like the cash receipts journal, cash disbursements journal, sales journal and purchase journal that are used to record specific recurring transactions. The journalizing process of entering debit and credit entries for each transaction in the general journal is also explained along with examples.
Communicating effectively and consistently with students can help them feel at ease during their learning experience and provide the instructor with a communication trail to track the course's progress. This workshop will take you through constructing an engaging course container to facilitate effective communication.
i have made this ppt for my college ,,i will share this for those gyes who want a specimen of bfa subject
and this slide making crdt goes to my sir.. thank you sir
Accounting Cycle - Journals - Capturing accounting eventFaHaD .H. NooR
What is the accounting cycle?
The accounting cycle is often described as a process that includes the following steps: identifying, collecting and analyzing documents and transactions, recording the transactions in journals, posting the journalized amounts to accounts in the general and subsidiary ledgers, preparing an unadjusted trial balance, perhaps preparing a worksheet, determining and recording adjusting entries, preparing an adjusted trial balance, preparing the financial statements, recording and posting closing entries, preparing a post-closing trial balance, and perhaps recording reversing entries.
Cycle and steps seem to be a carryover from the days of manual bookkeeping and accounting when transactions were first written into journals. In a separate step the amounts in the journal were posted to accounts. At the end of each month, the remaining steps had to take place in order to get the monthly, manually-prepared financial statements.
Today, most companies use accounting software that processes many of these steps simultaneously. The speed and accuracy of the software reduces the accountant's need for a worksheet containing the unadjusted trial balance, adjusting entries, and the adjusted trial balance. The accountant can enter the adjusting entries into the software and can obtain the complete financial statements by simply selecting the reports from a menu. After reviewing the financial statements, the accountant can make additional adjustments and almost immediately obtain the revised reports. The software will also prepare, record, and post the closing entries
The document summarizes key aspects of the accounting recording process. It explains that the recording process involves (1) analyzing transactions, (2) journalizing transactions by recording them in a journal, and (3) posting journal entries to individual accounts in the general ledger. It also describes what a journal and general ledger are and how they are used. The chapter concludes by explaining what a trial balance is and that its purpose is to ensure total debits equal total credits.
presentation slide on Accounting General ledger & trial balanceDaySpring Limited
This presentation discusses the general ledger, trial balance, and their purpose and process. The general ledger contains all balance sheet accounts and records transactions through debits and credits. A trial balance is created by summing the balances of each ledger account and comparing total debits to total credits to check for errors. An example transaction is provided to demonstrate preparing ledger accounts and a trial balance.
Accounting general ledger and trail balance presentation slide DaySpring Limited
This document provides an overview of general ledgers, trial balances, and the accounting process. It defines general ledgers and trial balances, explains how to prepare ledger accounts and post transactions, and describes how an unbalanced or balanced trial balance can indicate errors in the accounting process. Examples are provided to illustrate key concepts like preparing a trial balance and detecting errors.
BASIC ACCOUNTING FOR ALL INCLUDING MANAGERS. ACCOUNTING, DOUBLE ENTRY SYSTEM, JOURNEL (defination,advantages/limitations, how to make,) TRAIL BALANCE(defination,limitations/advantages, steps}
Financial accounting mgt101 power point slides lecture 06Abdul Wadood Ansary
This document discusses the basic accounting process and books of accounts. It explains that transactions are first recorded in vouchers and then the general journal. The general journal records are then posted to individual accounts in the general ledger. The general ledger contains T-accounts for each ledger account, where debits and credits from transactions are recorded. The balance of each ledger account, which is the difference between total debits and credits, represents the net amount for that account.
The document describes the accounting cycle and process of journalizing business transactions. It explains that companies initially record transactions in chronological order in a general journal. Journalizing involves making separate entries for each transaction with the date, accounts and amounts to be debited and credited, and an explanation. Journal entries can be simple, involving two accounts, or compound, involving three or more accounts. Sample transactions are provided as an example of journalizing entries.
The document discusses the income statement and how it is used to report revenues and expenses to calculate income over an accounting period. Revenues increase retained earnings and are recorded as credits, while expenses decrease retained earnings and are recorded as debits. The income statement classifies expenses as operating or non-operating and reports gross profit, operating income, income before taxes, and net income. It also discusses the retained earnings statement and how the journal and ledger are used to record transactions that affect account balances over time.
The document discusses accounting journals and ledgers. It explains that journals are used to initially record transactions in chronological order, while ledgers provide a complete record of financial transactions over the life of a company. It also distinguishes between general ledgers, which provide a summary of all financial transactions, and subsidiary ledgers, which store specific transaction types to avoid cluttering the general ledger. Finally, it emphasizes that every transaction in a subsidiary ledger is periodically summarized and posted to a corresponding general ledger account.
ACCOUNTING PRINCIPLES 1. Which of the following is not a core financial statement?
a. The Income Statement
b. Statement of Cash Flows
c. The Trial Balance
d. The Balance Sheet
2. The income statement, which presents the results of operations, can be prepared in many forms including:
a. Single Step Income Statement
b. Condensed Income Statement
c. Common Sized Income Statement
d. All of the above
3. Which of the following account types increase by debits in double-entry accounting?
a. Assets, Expenses, Losses
b. Assets, Revenue, Gains
c. Expenses, Liabilities, Losses
d. Gains, Expenses, Liabilities
4. Which of the following is true?
a. Accounts receivable are found in the current asset section of a balance sheet.
b. Accounts receivable increase by credits.
c. Accounts receivable are generated when a customer makes payments.
d. Accounts receivable become more valuable over time.
5. A company that uses the cash basis of accounting will:
a. Record revenue when it is collected.
b. Record revenue when it is earned.
c. Record revenue at the same time as accounts receivable.
d. Record bad debt expense on the income statement.
6. What are the main sections on a balance sheet?
a. Assets, liabilities, income
b. Assets, liabilities, equity
c. Assets, liabilities, expenses
d. Assets, gains, revenue
7. How are a company’s financial statements used?
a. For internal analysis
b. For external negotiation
c. For compliance
d. All of the above
8. Which of the following scenarios increases accounts payable?
a. A customer fails to pay an invoice.
b. A supplier delivers raw materials on credit.
c. Office supplies are purchased with cash.
d. None of the above
9. Which of the following must a certified public accountant (CPA) have in-depth knowledge of to pass the CPA licensing exam? (Check all that apply.)
a. Accounting software packages
b. Auditing
c. Derivatives
d. International banking laws
10. What is the result of the following transaction for Company A? Company A’s customer is unable to pay for a previous credit sale in accordance with Company A’s 90-day payment terms. The customer makes a promissory note to Company A that extends payment over a 24-month term including 5% interest.
a. No result because the customer didn’t pay.
b. Accounts receivable increases because of the interest.
c. A note receivable is recorded in non-current assets.
d. Company A records the loan as a liability.
11. When are liabilities recorded under the accrual basis of accounting?
a. When incurred
b. When paid
c. At the end of the fiscal year
d. When bank accounts are reconciled
12. Which is true about time in accounting?
a. Current liabilities are debts payable within 2 years.
b. Balance sheets reflect a company’s financial position at a certain point in time.
c. The time value of money is a finance concept, not relevant in accounting.
d. Accounts receivable are more easily collected as time passes.
13. When a company purchases property, plant, and equipment, how is it reflected on the
This document provides an overview of bookkeeping concepts including:
- Chart of accounts which lists account names for recording transactions. Common sections include assets, liabilities, equity, income and expenses.
- T-accounts which are used to record changes to account balances, with debits on the left and credits on the right.
- Rules of debit and credit which specify whether increases and decreases to different types of accounts are recorded as debits or credits. For assets, increases are debits and decreases are credits.
Several examples then demonstrate how to analyze transactions and apply debits and credits to the appropriate T-accounts.
The general journal is used to record transactions not recorded in specialty journals. It provides a chronological record of non-specialized entries. Examples include asset sales, depreciation, interest income/expense, and stock sales. The document also provides an example general journal entry and explains the format for recording debit/credit journal entries with date, account titles, amounts, and narration.
This document contains a presentation on accounting concepts and principles. It defines accounting and discusses key accounting concepts such as business entity, money measurement, accounting period, cost, dual aspect, matching, realization and full disclosure. It also covers accounting principles including consistency, materiality, conservatism and double entry system. The document concludes with explaining accounting processes such as journal, ledger, trial balance and financial statements including trading account, profit and loss account and balance sheet. It also discusses ratio analysis and different types of ratios to analyze business performance.
Accounting Cycle - Trial Balance - Easy AccountingFaHaD .H. NooR
1. The accounting cycle involves journalizing transactions, posting entries to ledger accounts, preparing a trial balance to check that debits equal credits, making adjustments, and generating financial statements.
2. A trial balance lists accounts and balances to prove that total debits equal total credits, but it does not guarantee the ledger is correct as errors can still exist.
3. Net income represents the increase in owners' equity from profits over the lifetime of a business, and is reflected in the Retained Earnings account rather than as an asset.
Here are the steps to analyze and post a journal entry:
1. Analyze the journal entry to determine the accounts involved and whether each account increased or decreased.
2. Determine if each account is an asset, liability, equity, revenue or expense account based on the general ledger chart of accounts.
3. Translate increases in asset and expense accounts and decreases in liability, equity and revenue accounts into debits, and increases in liability, equity and revenue accounts and decreases in asset and expense accounts into credits.
4. Record the debits and credits in the appropriate general ledger accounts.
Posting
Question
LO 6
NetSolutions records business transactions using double-entry accounting. Transactions include Chris Clark investing $25,000 cash in the business, purchasing $20,000 of land, buying $1,350 of supplies on account, earning $7,500 in fees, paying $3,650 in expenses, paying $950 to creditors, using $800 of supplies, and Chris Clark withdrawing $2,000 cash. Debits and credits are equal for each transaction to maintain the accounting equation of assets = liabilities + owner's equity.
This document provides an overview of topics covered in ACCT 101 Accounting and Financial Management for weeks 1 and 2. It discusses the differences between not-for-profit and for-profit organizations, the importance and purpose of accounting, accounting terminology and language, the double-entry accounting system, the accounting equation, accrual versus cash basis accounting, and the development of financial reporting standards. Key accounting concepts such as assets, liabilities, revenues, and expenses are defined. Examples are also provided to demonstrate how to record accounting transactions and how transactions affect the accounting equation.
The document provides an introduction to books of accounts used in accounting. It discusses the general journal as the book of original entry where transactions are initially recorded. It also discusses special journals like the cash receipts journal, cash disbursements journal, sales journal and purchase journal that are used to record specific recurring transactions. The journalizing process of entering debit and credit entries for each transaction in the general journal is also explained along with examples.
Communicating effectively and consistently with students can help them feel at ease during their learning experience and provide the instructor with a communication trail to track the course's progress. This workshop will take you through constructing an engaging course container to facilitate effective communication.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
-------------------------------------------------------------------------------
Find out more about ISO training and certification services
Training: ISO/IEC 27001 Information Security Management System - EN | PECB
ISO/IEC 42001 Artificial Intelligence Management System - EN | PECB
General Data Protection Regulation (GDPR) - Training Courses - EN | PECB
Webinars: https://pecb.com/webinars
Article: https://pecb.com/article
-------------------------------------------------------------------------------
For more information about PECB:
Website: https://pecb.com/
LinkedIn: https://www.linkedin.com/company/pecb/
Facebook: https://www.facebook.com/PECBInternational/
Slideshare: http://www.slideshare.net/PECBCERTIFICATION
How to Setup Warehouse & Location in Odoo 17 InventoryCeline George
In this slide, we'll explore how to set up warehouses and locations in Odoo 17 Inventory. This will help us manage our stock effectively, track inventory levels, and streamline warehouse operations.
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
2. After studying this chapter, you should be able to:
CHAPTER 2
THE RECORDING PROCESS
1 Explain what an account is and how it
helps in the recording process
2 Define debits and credits and explain
how they are used to record business
transactions
3 Identify the basic steps in the
recording process
4 Explain what a journal is and how it
helps in the recording process
3. 5 Explain what a ledger is and how it
helps in the recording process
6 Explain what posting is and how it helps
in the recording process
7 Prepare a trial balance and explain its
purpose
After studying this chapter, you should be able to:
CHAPTER 2
THE RECORDING PROCESS
4. THE ACCOUNT
STUDY OBJECTIVE 1
• An account is an individual
accounting record of increases
and decreases in a specific asset,
liability, or owner’s equity item.
• There are separate accounts for
the items we used in transactions
such as cash, salaries expense,
accounts payable, etc.
5. BASIC FORM OF ACCOUNT
STUDY OBJECTIVE 2
• The simplest form an account consists of
1 the title of the account
2 a left or debit side
3 a right or credit side
• The alignment of these parts resembles the
letter T = T account
Left or debit side
Title of Account
Right or credit side
Debit balance Credit balance
6. DEBITS AND CREDITS
• Debit indicates left and Credit indicates right
• Recording $ on the left side of an account is
debiting the account
• Recording $ on the right side is crediting the
account
• If the total of debit amounts is bigger than
credits, the account has a debit balance
• If the total of credit amounts is bigger than
debits, the account has a credit balance
8. Cash
Debits Credits
15,000
Example: The owner makes an initial
investment of $15,000 to start
the business. Cash is debited
as the owner’s Capital is
credited.
DEBITING AN ACCOUNT
9. Example: Monthly rent of $7,000 is paid.
Cash is credited as Rent
Expense is debited.
CREDITING AN ACCOUNT
Cash
Debits Credits
7,000
10. DEBITING / CREDITING AN
ACCOUNT
Cash
Debits Credits
15,000 7,000
8,000
Example: Cash is debited for $15,000
and credited for $7,000, leaving
a debit balance of $8,000.
11. DOUBLE-ENTRY SYSTEM
• equal debits and credits made
accounts for each transaction
• total debits always equal the total
credits
• accounting equation always stays
in balance
Assets Liabilities Equity
12. DEBIT AND CREDIT EFFECTS —
ASSETS AND LIABILITIES
Debits Credits
Increase assets Decrease assets
Decrease liabilities Increase liabilities
13. NORMAL BALANCE
• every account has a
designated normal balance.
–It is either a debit or credit.
• accounts rarely have an
abnormal balance.
14. NORMAL BALANCES — ASSETS
AND LIABILITIES
Assets
Increase Decrease
Debit Credit
Decrease Increase
Debit Credit
Liabilities
•Normal
Balance
Normal
Balance
15. DEBIT AND CREDIT EFFECTS —
OWNER’S CAPITAL
Debits Credits
Decrease owner’s capital Increase owner’s capital
16. NORMAL BALANCE — OWNER’S
CAPITAL
Owner’s Capital
Decrease Increase
Debit Credit
Normal
Balance
17. DEBIT AND CREDIT EFFECTS —
REVENUES AND EXPENSES
Decrease revenues Increase revenues
Increase expenses Decrease expenses
Debits Credits
18. NORMAL BALANCES —
REVENUES AND EXPENSES
Increase Decrease
Debit Credit
Expenses
Revenues
Decrease Increase
Debit Credit
Normal
Balance
Normal
Balance
19. EXPANDED BASIC EQUATION
AND DEBIT/CREDIT RULES AND
EFFECTS
Liabilities
Assets Owner’s Equity
= + -
+
=
+ -
Assets
Dr. Cr.
+ -
Liabilities
Dr. Cr.
- +
Dr. Cr.
Owner’s
Drawing
+ -
Dr. Cr.
Revenues
- +
Dr. Cr.
Expenses
+ -
Dr. Cr.
Owner’s
Capital
- +
20. Chapter 2
Which of the following is not true of the
terms debit and credit.
a. They can be abbreviated as Dr. and Cr.
b. They can be interpreted to mean increase and
decrease.
c. They can be used to describe the balance of an
account.
d. They can be interpreted to mean left and right.
21. Chapter 2
Which of the following is not true of the
terms debit and credit.
a. They can be abbreviated as Dr. and Cr.
b. They can be interpreted to mean increase and
decrease.
c. They can be used to describe the balance of an
account.
d. They can be interpreted to mean left and right.
22. THE RECORDING
PROCESS
STUDY OBJECTIVE 3
1 analyze each transaction (+, -)
2 enter transaction in a journal
3 transfer journal information to
ledger accounts
23. THE JOURNAL
STUDY OBJECTIVE 4
• Transactions
– Are initially recorded in chronological
order before they are transferred to the
ledger accounts.
• A general journal has
1 spaces for dates
2 account titles and explanations
3 references
4 two amount columns
24. A journal makes several contributions to
recording process:
1 discloses in one place the complete effect of a
transaction
2 provides a chronological record of transactions
3 helps to prevent or locate errors as debit and
credit amounts for each entry can be compared
THE JOURNAL
25. JOURNALIZING
• Entering transaction data in the journal
is known as journalizing.
• Separate journal entries are made for
each transaction.
• A complete entry consists of:
1 the date of the transaction,
2 the accounts and amounts to be
debited and credited,
3 a brief explanation of transaction.
26. TECHNIQUE OF
JOURNALIZING
The date of the transaction is entered into the
date column.
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 15,000
R. Neal, Capital 15,000
(Invested cash in business)
1 Computer Equipment 7,000
Cash 7,000
(Purchased equipment for
cash)
27. TECHNIQUE OF
JOURNALIZING
The debit account title is entered at the extreme
left margin of the Account Titles and Explanation
column. The credit account title is indented on the
next line.
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 15,000
R. Neal, Capital 15,000
(Invested cash in business)
1 Computer Equipment 7,000
Cash 7,000
(Purchased equipment for
cash)
28. TECHNIQUE OF
JOURNALIZING
The amounts for the debits are recorded in the
Debit column and the amounts for the credits are
recorded in the Credit column.
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 15,000
R. Neal, Capital 15,000
(Invested cash in business)
1 Computer Equipment 7,000
Cash 7,000
(Purchased equipment for
cash)
29. TECHNIQUE OF
JOURNALIZING
A brief explanation of the transaction is given.
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 15,000
R. Neal, Capital 15,000
(Invested cash in business)
1 Computer Equipment 7,000
Cash 7,000
(Purchased equipment for
cash)
30. TECHNIQUE OF
JOURNALIZING
A space is left between journal entries. The
blank space separates individual journal entries
and makes the entire journal easier to read.
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 15,000
R. Neal, Capital 15,000
(Invested cash in business)
1 Computer Equipment 7,000
Cash 7,000
(Purchased equipment for
cash)
31. TECHNIQUE OF
JOURNALIZING
The column entitled Ref. is left blank at the time
journal entry is made and is used later when the
journal entries are transferred to the ledger
accounts.
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 15,000
R. Neal, Capital 15,000
(Invested cash in business)
1 Computer Equipment 7,000
Cash 7,000
(Purchased equipment for
cash)
32. GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
July 1 Cash 20,000
K. Browne, Capital 20,000
(Invested cash in the
business)
If an entry involves only two accounts, one debit
and one credit, it is considered a simple entry.
SIMPLE AND COMPOUND
JOURNAL ENTRIES
33. When three or more accounts are required in
one journal entry, the entry is referred to as a
compound entry.
COMPOUND JOURNAL
ENTRY
2
1
3
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
July 1 Delivery Equipment 14,000
Cash 8,000
Accounts Payable 6,000
(Purchased truck for cash
with balance on account)
34. GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
July 1 Cash 8,000
Delivery Equipment 14,000
Accounts Payable 6,000
(Purchased truck for cash
with balance on account)
COMPOUND JOURNAL
ENTRY
This is the wrong format; all debits must be listed
before the credits are listed.
35. THE LEDGER
STUDY OBJECTIVE 5
A Group of accounts maintained by a
company is called the ledger.
A general ledger contains all the
assets, liabilities, and owner’s
equity accounts
36. POSTING A JOURNAL ENTRY
In the ledger, enter in the appropriate columns of the account(s)
debited the date, journal page, and debit amount shown in the journal.
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 10 15,000
R. Neal, Capital 25 15,000
(invested cash in business)
R. NEAL, CAPITAL NO. 25
Date Explanation Ref. Debit Credit Balance
2019
Sept. 1 J1 15,000 15,000
GENERAL LEDGER
CASH NO. 10
Date Explanation Ref. Debit Credit Balance
2019
Sept. 1 J1 15,000 15,000
37. POSTING A JOURNAL ENTRY
R. NEAL, CAPITAL NO. 25
Date Explanation Ref. Debit Credit Balance
2019
Sept. 1 J1 15,000 15,000
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 10 15,000
R. Neal, Capital 25 15,000
(invested cash in business)
GENERAL LEDGER
CASH NO. 10
Date Explanation Ref. Debit Credit Balance
2019
Sept. 1 J1 15,000 15,000
In the reference column of the journal, write the account
number to which the debit amount was posted.
38. POSTING A JOURNAL ENTRY
In the ledger, enter in the appropriate columns of the account(s) credited the date, journal
page, and credit amount shown in the journal.
R. NEAL, CAPITAL NO. 25
Date Explanation Ref. Debit Credit Balance
2019
Sept. 1 J1 15,000 15,000
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 10 15,000
R. Neal, Capital 25 15,000
(invested cash in business)
GENERAL LEDGER
CASH NO. 10
Date Explanation Ref. Debit Credit Balance
2019
Sept. 1 J1 15,000 15,000
39. POSTING A JOURNAL ENTRY
In the reference column of the journal, write the account number to which the
credit amount was posted.
R. NEAL, CAPITAL NO. 25
Date Explanation Ref. Debit Credit Balance
2019
Sept. 1 J1 15,000 15,000
GENERAL JOURNAL J1
Date Account Titles and Explanation Ref. Debit Credit
2019
Sept. 1 Cash 10 15,000
R. Neal, Capital 25 15,000
(invested cash in business)
GENERAL LEDGER
CASH NO. 10
Date Explanation Ref. Debit Credit Balance
2019
Sept. 1 J1 15,000 15,000
40. A Chart of Accounts lists the accounts and the
account numbers which identify their location in the
ledger.
CHART OF ACCOUNTS
41. INVESTMENT OF CASH BY
OWNER
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 1, C.R. Byrd invests $10,000 cash in an
advertising business known as:
The Pioneer Advertising Agency.
•The asset Cash is increased $10,000
•Owner’s equity, C. R. Byrd, Capital is increased
$10,000.
Debits increase assets: debit Cash $10,000.
Credits increase owner’s equity: credit C.R. Byrd,
Capital $10,000.
42. PURCHASE OF OFFICE
EQUIPMENT
C. R. Byrd, Capital 301
Oct. 1 10,000
Cash 101
Oct. 1 10,000
Date Account Titles and Explanation Ref. Debit Credit
Oct. 1 Cash 101 10,000
C. R. Byrd, Capital 301 10,000
(Owner invests $10,000
In the business)
JOURNAL ENTRY
POSTING
43. INVESTMENT OF CASH BY
OWNER
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 1, C. R. Byrd purchases $5,000 of
equipment by issuing a 3-month, 12% note
payable.
•The asset Office Equipment is increased $5,000.
•The liability, Notes Payable is increased $5,000.
Debits increase assets: debit Office Equipment
$5,000.
Credits increase liabilities: credit Notes Payable
$5,000.
45. RECEIPT OF CASH FOR
FUTURE SERVICE
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 2, a $1,200 cash advance is received from a
client, for advertising services expected to be
completed by December 31.
Asset Cash is increased $1,200
Liability Unearned Fees is increased $1,200
•Service has not been rendered yet.
Liabilities often have the word “payable” in their
title, Unearned fees are a liability.
Debits increase assets: debit Cash $1,200.
Credits increase liabilities: credit Unearned Fees
$1,200.
46. RECEIPT OF CASH FOR
FUTURE SERVICE
Unearned Fees 209
Oct. 2 1,200
Cash 101
Oct. 1 10,000
2 1,200
Date Account Titles and Explanation Ref. Debit Credit
Oct. 2 Cash 101 1,200
Unearned Fees 209 1,200
(Received advance from R.
Knox for future services)
JOURNAL ENTRY
POSTING
47. PAYMENT OF MONTHLY
RENT
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 3, office rent for October is paid in cash,
$900.
The expense Rent is increased $900
Payment pertains only to the current month
Asset Cash is decreased $900.
Debits increase expenses: debit Rent Expense $900.
Credits decrease assets: credit Cash $900.
48. PAYMENT OF RENT
EXPENSE
Cash 101
Oct. 1 10,000 Oct. 3 900
Oct. 2 1,200
Rent Expense 729
Oct. 3 900
Date Account Titles and Explanation Ref. Debit Credit
Oct. 3 Rent Expense 729 900
Cash 101 900
(Paid $900 for October rent)
JOURNAL ENTRY
POSTING
49. PAYMENT FOR INSURANCE
-Asset Prepaid Insurance increases $600
-Payment extends to more than the current month
-Asset Cash is decreased $600.
-Payments of expenses benefiting more than one
period are prepaid expenses or prepayments.
Transaction
October 4, $600 Paid one-year insurance policy-
expires next year on September 30.
Debit-Credit
Analysis
Debits increase assets: debit Prepaid Insurance
$600. Credits decrease assets: credit Cash $600.
Basic
Analysis
50. PAYMENT FOR
INSURANCE
Cash 101
Oct. 1 10,000 Oct. 3 900
2 1,200 4 600
Date Account Titles and Explanation Ref. Debit Credit
Oct. 4 Prepaid Insurance 130 600
Cash 101 600
(Paid one-year policy;
effective date October 1)
JOURNAL ENTRY
POSTING
Prepaid Insurance 130
Oct. 4 600
51. PURCHASE OF SUPPLIES
ON CREDIT
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 5, an estimated 3-month supply of
advertising materials is purchased on account from
Aero Supply for $2,500.
The asset Advertising Supplies is increased $2,500;
the liability Accounts Payable is increased $2,500.
Debits increase assets: debit Advertising Supplies
$2,500. Credits increase liabilities: credit
Accounts Payable $2,500.
52. PURCHASE OF SUPPLIES
ON CREDIT
Accounts Payable 201
Oct. 5 2,500
Advertising Supplies 126
Oct. 5 2,500
Date Account Titles and Explanation Ref. Debit Credit
Oct. 5 Advertising Supplies 126 2,500
Accounts Payable 201 2,500
(Purchased supplies on
account from Aero Supply)
JOURNAL ENTRY
POSTING
53. HIRING OF EMPLOYEES
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 9, hire four employees to begin work on
October 15. Each employee is to receive a weekly
salary of $500 for a 5-day work week, payable every
2 weeks -- first payment made on October 26.
A business transaction has not occurred only an
agreement between the employer and the
employees to enter into a business transaction
beginning on October 15.
A debit-credit analysis is not needed because there is
no accounting entry.
54. WITHDRAWAL OF CASH BY
OWNER
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 20, C. R. Byrd withdraws $500 cash for
personal use.
The owner’s equity account C. R. Byrd, Drawing is
increased $500.
The asset Cash is decreased $500.
Debits increase drawings: debit C. R. Byrd,
Drawing $500. Credits decrease assets: credit
Cash $500.
55. WITHDRAWAL OF CASH BY
OWNER
C. R. Byrd, Drawing 306
Oct. 20 500
Cash 101
Oct. 1 10,000 Oct. 3 900
2 1,200 4 600
20 500
Date Account Titles and Explanation Ref. Debit Credit
Oct. 20 C. R. Byrd, Drawing 306 500
Cash 101 500
(Withdrew cash for personal
use)
JOURNAL ENTRY
POSTING
56. PAYMENT OF SALARIES
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 26, employee salaries of $4,000 are owed
and paid in cash. (See October 9 transaction.)
The expense account Salaries Expense is increased
$4,000; the asset Cash is decreased $4,000.
Debits increase expenses: debit Salaries Expense
$4,000. Credits decrease assets: credit Cash $4,000.
58. RECEIPT OF CASH FOR FEES
EARNED
Basic
Analysis
Debit-Credit
Analysis
Transaction
October 31, received $10,000 in cash from Copa
Company for advertising services rendered in
October.
The asset Cash is increased $10,000; the revenue
Fees Earned is increased $10,000.
Debits increase assets: debit Cash $10,000. Credits
increase revenues: credit Fees Earned $10,000.
60. THE TRIAL BALANCE
STUDY OBJECTIVE 7
• The trial balance is a list of accounts and
their balances at a given time.
• The primary purpose of a trial balance is
to prove debits = credits after posting.
• If debits and credits do not agree, the
trial balance can be used to uncover
errors in journalizing and posting.
61. THE TRIAL BALANCE
The Steps in preparing the Trial Balance are:
1. List the account titles and balances
2. Total the debit and credit columns
3. Prove the equality of the two columns
62. PIONEER ADVERTISING AGENCY
Trial Balance
October 31, 2019
Debit Credit
Cash $ 15,200
Advertising Supplies 2,500
Prepaid Insurance 600
Office Equipment 5,000
Notes Payable $ 5,000
Accounts Payable 2,500
Unearned Fees 1,200
C. R. Byrd, Capital 10,000
C. R. Byrd, Drawing 500
Fees Earned 10,000
Salaries Expense 4,000
Rent Expense 900
$ 28,700 $ 28,700
The total
debits must
equal the total
credits.
A TRIAL BALANCE
63. LIMITATIONS OF A
TRIAL BALANCE
• A trial balance does not prove all transactions
have been recorded or the ledger is correct.
• Numerous errors may exist even though the
trial balance columns agree. For example, the
trial balance may balance even when:
– a transaction is not journalized
– a correct journal entry is not posted
– a journal entry is posted twice
– incorrect accounts used in journalizing or
posting
– offsetting errors are made in recording
64. Chapter 2
Which one of the following represents the expanded
basic accounting equation?
a. Assets = Liabilities + Owner’s Capital + Owner’s
Drawings – Revenue - Expenses.
b. Assets + Owner’s Drawings + Expenses = Liabilities
+ Owner’s Capital + Revenue.
c. Assets – Liabilities – Owner’s Drawings = Owner’s
Capital + Revenue – Expenses.
d. Assets = Revenue + Expenses – Liabilities.
65. Chapter 2
Which one of the following represents the expanded
basic accounting equation?
a. Assets = Liabilities + Owner’s Capital + Owner’s
Drawings – Revenue - Expenses.
b. Assets + Owner’s Drawings + Expenses = Liabilities
+ Owner’s Capital + Revenue.
c. Assets – Liabilities – Owner’s Drawings = Owner’s
Capital + Revenue – Expenses.
d. Assets = Revenue + Expenses – Liabilities.