CP ACCOUNTING
Chapter 3: The General Journal and the General Ledger
PERFORMANCE OBJECTIVES
1.
2.
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5.
Record a group of transactions pertaining to a service enterprise in a two-column general journal.
Post entries from a two-column general journal to general ledger accounts.
Prepare a trial balance from the ledger accounts.
Explain the importance of source documents.
Correct entries using the ruling or correcting entry method.
KEY POINTS
1. Transactions are recorded first in a journal.
2. Cross-referencing is recording the journal page number in the Post. Ref. column of the ledger and the
ledger account number in the Post. Ref. column of the journal.
3. The numbering system in the chart of accounts identifies the classification, account title, and position of the
account in the general ledger.
4. A trial balance consists of a list of the account balances in general ledger order and provides proof of the
equality of debits and credits.
5. The method used to correct errors depends on what type of error was made and at what step in the
accounting process it was made.
Chapter 3 Vocabulary Words:
Cost Principle
Cross-reference
General Ledger
Journal
Journalizing
Ledger Account
Posting
Source Documents
Two-column General Journal
A source document is necessary for all transactions as proof that the transaction occurred.
Source Documents to Know
Purpose
Check
When Cash is paid – it is through a check
Receipt
When cash is RECEIVED, a receipt is given.
Invoice
An invoice is used when we BUY on ACCOUNT (AP)
Sales Invoice
A sales invoice is used when we SELL on ACCOUNT (AR)
Memo (and/or letter)
A memo is used for all other transactions
Please refer to the chapter review Practice Exercises (with solutions) on pages 117-121.
Additional enrichment activities can be found on the student companion website. (Cengage.com)
Chapter 3
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