Accounting
Chapter 3 notes
3-1
Form for recording transactions in date order is called a journal. There are many
different kinds of journals depending on the business type. TechKnow uses a 5column that has special columns for CASH and SALES because most of the transactions
involve cash and selling their services.
We use source documents such as check stubs, memorandums, sales invoices,
receipts, and calculator tapes to get our information for recording.
Transaction information is recorded in the journal and is called an entry. The entry
has 4 parts—
o Date
o Debit
o Credit
o Source document.
On the account title line you write the account that doesn’t have the special
column. For example, if you paid cash for supplies, you have a special column for
cash so you credit cash, but write SUPPLIES on the account title column and debit
supplies.;
Work through transactions, p. 60-61
COMPLETE WORK TOGETHER IN CLASS, GO OVER ANSWERS
3-2
Buying and paying on account sometimes involves using 2 lines in the journal because
there are no special amount columns for their accounts. See example on p. 64.
Write the debit amount first, then include the credit amount underneath
Work through transactions on p. 64-65
COMPLETE WORK TOGETHER IN CLASS, GO OVER ANSWERS
3-3
Receiving CASH for a SALE uses both special columns, so we simply put a check mark
in the account title column. Record debits/credits and place another check mark in
the Post. Ref. column as well (explained in ch. 4)
Work through transactions on p. 66-71
COMPLETE WORK TOGETHER IN CLASS, GO OVER ANSWERS
3-4
You must make the equation equal in the end!! The title for this process is proving
cash. The steps are:
o Add each of the amount columns and write on the next available line
o Add the debit totals, then the credit totals
o Compare and make sure thy equal. Correcting errors will be discussed next,
and there is a handout for tips.
Ruling a journal page is essential for clear and concise reporting.
o At the bottom of the page, write carried forward on the account title page if
you are not at the end of the month.
o Using a ruler, draw a line above your total line to show the end of the
entries
o Total your amounts
o Double rule, using the ruler, to show the ending totals of each column to
carry forward
o Start the new page by writing BROUGHT FORWARD and place a check mark
in the Post. Ref. column
o Carry the totals to the top of the page.
REVIEW standard accounting practices on p. 77.
COMPLETE WORK TOGETHER IN CLASS, GO OVER ANSWERS