UNIT 2 + -

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UNIT 2
RECORDING
=
ASSETS
DR. CR.
+
'
TRANSACTIONS
-
DR.
OWNER'SEOUITY
DR.
CR.
+
LIABILITIES
-
.
I
.
WITHDRAWAT ,R
+
DR.
I.
+
I
-
I
CR.
EXPENSES
REVENUE
+
DR.
+
DR.
CR.
I
CR.
I
JOURNALENTRIES
In the preceding learning unit, transactions were recorded in T accounts because students find it easier to analyze transactions with T accounts. This learning unit makes the transition from T accounts to Journal Entries, the first step of
the accounting process.
JOURNALIZING TRANSACTIONS
DR.
CR.
ANALYZING TRANSACI'IONS
Assets
+
Liabilities
Account Debited
Account Credited
Owner IS Equity
1. Darin Jones, a sophomore at State University, started the
Quick Clean Laundry Service with a $100 cash investment.
Cash
Capital. Darin Jones
100
I
100
I
2. On Sept. 1, paid $50 for 5 months of ads in the school newspaper.
Pr~id
Advertising
50
Cash
Capital,Darin Jones
XXX
XXX
100
100
Prepaid Advertising
Cash
50
Laundry Supplies
25
LaundryEquipment
Cash
48
50
I
~
50
I
3. On Sept. 1, purchased Laundry Supplies for $25 cash.
Laundry S~plies
25
25
Cash
I
Cash
25
I
4. On Sept. 1, purchased
Laundry Eq\l:i.pment
48
$48 of Laundry Equipment
Accounts Payable
I
paying
down.
$8
40
I
Cash
8
40
Accounts Payable
8
I
5. Darin made an additional investment
of $50.
Capital.
Cash
Capital,Darin Jones
50
6. Paid one-fourth the amount owed on the Laundry Equipment.
Cash
Accounts Payable
Accounts Payable
10
10
10
7. Darin withdrew$20 for personaluse.
Cash
Withdrawals.Darin Jones
20
20
Withdrawals,Darin Jones 20
Cash
~
50
Darin
I
Jones
50
[
I
50
10
Cash
I
I
20
I
8. Cash collected for Laundry Services performed during the month
amounted to $140. $10 was also due for services rendered.
~
140
Laundry Revenue
I
I
150
Cash
Accounts Receivable
Laundry Revenue
140
10
150
Accounts
Receivable
10
I
9. Paid $75 for the use of washers and dryers for September.
Cash
Washer/DJ:yer~e
75
I
10. Received
75
75
75
I
$5 on account.
Cash
AccountsReceivable
Cash
5
Washer/Dryer Expense
Cash
I
5
5
Accounts Receivable
I
5
11. On Sept. 26, two students paid $10 for next week I s Laundry Service.
Cash
20
Unearned LaundryRevenue
I
12. Paid monthly phone bill of $10.
Cash
10
I
I
20
Telephone~se
10
I
8
Cash
UnearnedLaundry
Revenue
20
Telephone Expense
10
Cash
20
10
II.
(1)
(5)
(8)
(10)
(11)
-
100
50
140
5
-2Q
315
Bal.
117
Accounts
(8)
10
Accounts
(6) 10
50
25
8
10
20
75
JQ
198
(2)
(3)
(4)
(6)
(7)
(9)
(12)
Receivable
I (10)
GENERAL LEDGER
Payable
(4)
40
I
Capital.
1
Unearned
Darin
(1)
(5)
LaunCb:y Revenues
I (11) 20
Withdrawals,
Darin
Jones
(7) 201
5
Washer Dryer
~se
(9) 7S1
Pre~aid
Advertising
I
(2)
50
LaunCb:y
(3)
25
Sup.plies
LaunCb:y
(4)
48
E~ipment
Jones
100
50
!
Laundry
Revenue
1(8)
150
Tele~hone ~nse
(12) 10 I
!
III.
TRIAL
Quick
BALANCE
Clean Laundry
Service
Trial
Balance
September
30, 1991
Cash
Accounts Receivable
Prepaid Advertising
Laundry Supplies
Laundry Equipment
Accounts Payable
Unearned Laundry Revenue
Capital,
Darin Jones
Withdrawals,
Darin Jones
Laundry Revenue
Washer/Dryer
Expense
Telephone Expense
$117
5
50
2S
48
$ 30
20
150
20
150
7S
-ll.
$350
$350
Note: Transaction
No.1 has been formally
journalized
and posted below.
PR stands for Post Reference.
The relevant
account number or General
Journal page number is placed in the PR column at the time of posting.
IV.
DATE
ACCOUNTTITLE
GENERAL JOURNAL
AND EXPLANATION
PR
Page
DEBIT
Sept.
1
Cash
1
Capital,
To record
Darin
cash
Sept.
Sept.
00
100
00
investment.
GENERAL LEDGER
CASH
PR
EXPLANATION
1
DATE
100
100
Jones
v.
DATE
CREDIT
II
I
1
I
ACCOUNT
NO.1
DEBIT
II
100
l");l\.RTN r(')N'R
PR
DEBIT
EXPLANATION
1
1
9
BALANCE
CREDIT
I
00
100
NO lO(
BALANCE
CREDIT
100
00
00
100
00
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