Journalizing Transactions
page 56
7. Journals and Journalizing
Journal – a form for recording transactions in
chronological order
Journalizing – recording transactions in a journal
5 column journal
2
page 57
Journals and Journalizing
Special amount column – a journal amount column
headed with an account title, used for transactions that
occur frequently
General amount column – a journal amount column that
is NOT headed with an account title
3
page 57
Journals and Journalizing
Entry – information for each transaction recorded in a
journal
Double-entry accounting – the recording of the debit and
credit parts of a transaction
4
page 57
8. Source Documents
Source document – a business paper from which
information is obtained for a journal entry
Accounting Concept: Objective Evidence
•When a source document is prepared for each
transaction
5
page 58
Source Documents
Check (C) – a business form ordering a bank to pay cash
from a bank account
6
page 58
Source Documents
Invoice – a form describing the goods or services sold, the
quantity, and the price
Sales invoice (S) – an invoice used as a source document
for recording a sale on account
7
page 59
Source Documents
Receipt (R) – a business form giving written
acknowledgement for cash received
receipt
8
page 59
Source Documents
Memorandum (M) – a form on which a brief message is
written describing a transaction
memorandum
9
page 59
Source Documents
Calculator tape (T) – printed total of the amount of cash
received for a time period (day)
calculator tape
10
RECEIVED CASH FROM OWNER AS
AN INVESTMENT
page 60
August 1. Received cash from owner as an investment, $5,000.00.
Receipt No. 1.
1
3
4
3
2
1. Write the date in the Date column.
2. Write the debit amount in the Cash
Debit column.
3. Record the credit amount in the General Credit column. Write the
title of the account in the Account Title column.
4. Write the source document number in the Doc. No. column.
11
LESSON 3-1
PAID CASH FOR SUPPLIES
page 61
August 3. Paid cash for supplies, $275.00. Check No. 1.
1
2
2
3
4
1. Write the date in the Date column.
2. Record the debit amount in the General
Debit column. Write the title of the
account in the Account Title column.
3. Write the credit amount in the Cash Credit column.
4. Write the source document number in the Doc. No. column.
12
LESSON 3-1
PAID CASH FOR INSURANCE
August 4. Paid cash for insurance, $1,200.00. Check No. 2.
1
2
2
3
4
1. Write the date in the Date column.
2. Record the debit amount in the General
Debit column. Write the title of the
account in the Account Title column.
3. Write the credit amount in the Cash Credit column.
4. Write the source document number in the Doc. No. column.
13
LESSON 3-2
page 63
BOUGHT SUPPLIES ON ACCOUNT
page 64
August 7. Bought supplies on account from Supply Depot, $500.00.
Memorandum No. 1.
1
2
4
3
2
3
1. Write the date in the Date column.
2. Record the debit amount in the General Debit
column. Write the title of the account in the
Account Title column.
3. Record the credit amount on the next line in
the General Credit column. Write the title of
the account in the Account Title column.
4. Write the source document number in the Doc. No. column on the first line
of the entry.
14
LESSON 3-2
PAID CASH ON ACCOUNT
page 65
August 11. Paid cash on account to Supply Depot, $300.00. Check No. 3.
2
1
2
3
4
1. Write the date in the Date column.
2. Record the debit amount in the General
Debit column. Write the title of the
account in the Account Title column.
3. Write the credit amount in the Cash Credit column.
4. Write the source document number in the Doc. No. column.
15
LESSON 3-2
page 73
MORE TRANSACTIONS
16
RECEIVED CASH FROM SALES
August 12. Received cash from sales, $295.00. Tape No. 12.
1
3
4
3
3
1. Write the date in the Date column.
2. Write the debit amount in the Cash
Debit column.
3. Write the credit amount in the Sales
Credit column. Place a check mark in
the Account Title column. A check mark
is also placed in the Post. Ref. column.
4. Write the source document number in the Doc. No. column.
17
LESSON 3-3
2
page 67
SOLD SERVICES ON ACCOUNT
page 68
August 12. Sold services on account to Oakdale School, $350.00. Sales
Invoice No. 1.
2
1
4
2
3
1. Write the date in the Date column.
2. Record the debit amount in the General
Debit column. Write the title of the
account in the Account Title column.
3. Write the credit amount in the Sales Credit column.
4. Write the source document number in the Doc. No. column.
18
LESSON 3-3
PAID CASH FOR AN EXPENSE
August 12. Paid cash for rent, $300.00. Check No. 4.
1
2
4
2
3
1. Write the date in the Date column.
2. Write the debit amount in the General
Debit column. Write the title of the
account in the Account Title column.
3. Write the credit amount in the Cash
Credit column.
4. Write the source document number in the Doc. No. column.
19
LESSON 3-3
page 69
RECEIVED CASH ON ACCOUNT
page 70
August 18. Received cash on account from Oakdale School, $200.00.
Receipt No. 2.
3
1
3
4
1. Write the date in the Date column.
2. Write the debit amount in the Cash
Debit column.
3. Record the credit amount in the General
Credit column. Write the title of the
account in the Account Title column.
4. Write the source document number in the Doc. No. column.
20
LESSON 3-3
2
PAID CASH TO OWNER FOR
PERSONAL USE
page 71
August 18. Paid cash to owner for personal use, $125.00. Check No. 6.
1
2
4
2
3
1. Write the date in the Date column.
2. Write the debit amount in the General
Debit column. Write the title of the
account in the Account Title column.
3. Write the credit amount in the Cash
Credit column.
4. Write the source document number in the Doc. No. column.
21
LESSON 3-3
page 73
9. Proving and Ruling a Journal
o Proving a Journal
o Performed before using the last line in a journal
before totals are carried forward
o Verifies debits = credits
o 3 steps
1. Add each of the amount columns
2. Add the debit and credit column totals
3. Verify total debits
= total credits
22
page74
Proving and Ruling a Journal
o Ruling a Journal…end of page
1. Rule a single line across all amount columns below
last entry
2. Write the current date
3. Write “Carried Forward” in Account Title column
and place a check mark in Post Ref. column
4. Write each column total below the single line
5. Rule a double line below column totals to indicate
total debits = total credits
23
RULING A JOURNAL PAGE
page 74
1
2
3
1. Rule a single line.
2. Write the date.
3. Write Carried Forward.
4. Write each column total.
5. Rule double lines.
24
LESSON 3-4
5
4
page75
Proving and Ruling a Journal
o Starting a new Journal Page
1. Write the page number at the top
2. Write the current date
3. Write “Brought Forward” in Account Title column
and place a check mark in Post Ref. column
4. Record the column totals
25
page 75
STARTING A NEW JOURNAL PAGE
1
2
3
1. Write the page number.
4
2. Write the date.
3. Write Brought Forward in the Account Title column. A check
mark is also placed in the Post. Ref. column.
4. Record the column totals brought forward from the previous page.
26
LESSON 3-4
page75
Proving and Ruling a Journal
o End of Month Ruling
o Follow the same steps of ruling except
1. Write “Totals” in Account Title column and DO
NOT put a check mark in Post Ref. column
27
PROVING AND RULING A JOURNAL
AT THE END OF A MONTH
page 75
1
2
1.
2.
3.
4.
5.
28
3
5
Rule a single line.
On the next line, write the date.
Write the word Totals.
Write each column total.
Rule double lines.
LESSON 3-4
4
page76
Proving Cash
oProving cash – determining that the amount of cash
agrees with the accounting record
o Start with cash on hand at the beginning of the
month
o Add cash received (cash debit column)
o Total
o Minus cash paid (cash credit column)
o Total
o Verify this amount matches balance in checkbook
29
STANDARD ACCOUNTING
PRACTICES
2
3
4
1
5
6
8
9
30
page 77
LESSON 3-4
7