Matakuliah
Tahun
: F0632/Accounting Software Package
: 2006
Jurnal Transaksi
Pertemuan 4 s.d 13
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JURNAL ENTRY
• Journal entry is an entry to the journal .
• Journal is a record that keeps accounting transactions in
chronological order, i.e. as they occur.
• Ledger is a record that keeps accounting transactions by accounts.
• Account is a unit to record and summarize accounting transactions.
• All accounting transactions are recorded through journal entries that
show account names, amounts, and whether those accounts are
recorded in debit or credit side of accounts.
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DOUBLE ENTRY IN ACCOUNTING
• To record transactions, accounting system uses double-entry
accounting.
• Double-entry implies that transactions are always recorded using
two sides, debit and credit.
• Debit refers to the left-hand side and credit refers to the right-hand
side of the journal entry or account.
• The sum of debit side amounts should equal to the sum of credit
side amounts.
• A journal entry is called "balanced" when the sum of debit side
amounts equals to the sum of credit side amounts.
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T-ACCOUNT
• This form looks like a letter "T", so it is called a T-account. Taccount is a convenient form to analyze accounts, because it
shows both debit and credit sides of the account.
Account
Debit
Credit
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Debits and Credits of Accounts
Debit
Credit
Increase in asset accounts
Decrease in asset accounts
Increase in expense accounts
Decrease in expense accounts
Decrease in liability accounts
Increase in liability accounts
Decrease in equity accounts
Increase in equity accounts
Decrease in revenue accounts
Increase in revenue accounts
5
Normal Balances of Accounts
• Accounts have normal balances on the side where the increases in
such accounts are recorded.
• Asset accounts have normal balances on debit side.
• Expense accounts have normal balances on debit side.
• Liability accounts have normal balances on credit side.
• Equity accounts have normal balances on credit side.
• Revenue accounts have normal balances on credit side.
• On the financial statements, accounts are reported on the sides
where they have normal balances.
• Liability accounts have normal balances on credit side.
• Equity accounts have normal balances on credit side.
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Normal Balances of Accounts
Balance Sheet
Assets
Liabilities
Owners’ Equity
Income Statement
Expenses
Revenues
7
ADJUSTING JURNAL ENTRY
• Adjusting journal entry is a journal entry prepared to adjust account
balances.
• The only way of changing account balances is to make journal
entries.
• Account balances cannot be changed without journal entries.
• If current account balances do not represent correct amounts,
journal entries are needed to change current balances to the correct
balances.
--> Journal entries prepared with this purpose are adjusting journal
entries.
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ADJUSTING JURNAL ENTRY
Companies need Adjusting Journal Entries because :
• Current account balances may not represent correct balances due
to following reasons:
• Company made mistakes in preparing journal entries in the
past.
• Accounting records are not updated to reflect new
transactions or amount changes in previous transactions.
• Adjusting journal entries are usually prepared at the end of an
accounting period to update account balances to reflect correct
balances as of the balance sheet date (the date at the end of an
accounting period).
• The timing differences in recognizing revenues and expenses
between accrual basis and cash basis accounting are frequently
corrected by adjusting journal entries.
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JURNAL ENTRY
Three steps of preparing adjusting journal entries :
• Step 1: Identify the original journal entries that have been made
during the period.
• Step 2: Identify the correct account balances.
• Step 3: Analyze the differences between correct and current
balances and prepare journal entries to adjust such
differences.
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INVENTORY SYSTEM
• PERPETUAL INVENTORY SYSTEM
• Perpetual inventory system updates inventory accounts after
each purchase or sale.
• Inventory subsidiary ledger is updated after each transaction.
• Inventory quantities are updated continuously.
• PERIODIC INVENTORY SYSTEM
• Periodic inventory system records inventory purchase or sale
in "Purchases" account.
• "Purchases" account is updated continuously, however,
"Inventory" account is updated on a periodic basis, at the end
of each accounting period (e.g., monthly, quarterly)
• Inventory subsidiary ledger is not updated after each
purchase or sale of inventory.
• Inventory quantities are not updated continuously.
• Inventory quantities are updated on a periodic basis.
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