Journals, Source Documents, & Recording Entries in a Journal by OZs7afeV

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									Journals, Source Documents, &
 Recording Entries in a Journal


     Chapter Three
Chapter Introduction
After taking chapter      •   Source document
   2 test, list all new   •   Check
   vocabulary words       •   Invoice
   for chapter 3 and
   write out their        •   Sales invoice
   definitions.           •   Receipt
• Journal                 •   Memorandum
• Journalizing            •   Proving Cash
• Special Amount
   Columns
• General Amount
   Columns
• Entry
• Double-entry
   accounting
Journals and Journalizing
• Journal: form for recording
  transactions in chronological
  order.
• Recording transaction in a
  journal is called journalizing.
   – Journal is permanent record
   – Fits the needs of the business
• What determines the kind of
  journal used?
   – Nature of business
   – Number of transactions
• Journalizing is done daily!
Five-Column Journal
Five Amount Columns
    – General Debit
    – General Credit
    – Sales Credit
    – Cash Debit
    – Cash Credit

Special Amount Column: a journal amount
  column headed with an account title.
• Used for frequently occurring transactions
• Eliminates writing an account title in the
  Account Title column and saves time

Three Special Amount Columns:
• Sales Credit
• Cash Debit
• Cash Credit
Five Column Journal
General Amount Column: a journal
  amount column that is not headed with
  an account title.
• General Debit
• General Credit

Facts about the Journal
• Information recorded includes debit
  and credit parts of each transaction in
  one location.
• Data can be verified by comparing
  journal to transaction data.
• Transactions are recorded in
  chronological order.
Journalizing
Entry: information for each
  transaction recorded in a journal.

Double-entry accounting:
  recording of debit and credit
  parts of a transaction.
• Each transaction affects at least
  two accounts
• A debit and a credit are
  recorded
• Debits = Credits
Source Documents
Source Documents are business
   papers from which information
   is obtained for a journal entry.
   –   Each transaction is described by a
       source document that proves it
       occurred.
   –   Example: Check stub for each
       cash payment


Objective Evidence: applied when
   a source document is prepared
   for each transaction.
Five Source Documents
•   Checks
•   Sales Invoices
•   Receipts
•   Calculator Tapes
•   Memorandums
Source Documents
• Checks- A business form ordering a bank
  to pay cash from a bank account (Source
  document for cash payments)




• Sales Invoices (Source document for
  recording a sale on a account)
   – Invoice: form describing the goods or
     services sold, the quantity, and the price.
Source Documents cont.
• Receipts – written acknowledgement
  for cash received (Source document
  for cash received from sources other
  than sales)
   – Example: Received Cash and an
      Investment
   – Calculator Tapes (Cash Sales)
• Memorandums – a form for which a
  brief message is written describing a
  transaction. (Used when no other
  source document is prepared for a
  transaction or when an additional
  explanation is needed.
Journal Entries
A Journal entry consists of
   four parts:
• Date
• Debit
• Credit
• Source Document

Use T accounts to help you!
Journal Entry Examples
Received Cash From Owner as an
  Investment, $5,000.00. Receipt No. 1




FYI – Dollar and cent signs,
decimals are not used when
writing on ruled paper
Journal Entry Example
August 3 -Paid Cash for Supplies,
 $275.00. Check No. 1




Remember: Writing Cash
  frequently could be time
  consuming- Special amount
  columns are used for these
  frequently used accounts
Review
1. In what order are transactions
   recorded in a journal?
   1. Chronological
2. Why are source documents
   important?
   1. Proves a transaction occurred
3. List the four parts of a journal entry.
   1.   Date
   2.   Debit
   3.   Credit
   4.   Source Document
Practice
• Working Together
• On Your Own
• Application Problem 3-1
Review
Look under your chairs – you
   may have a slip of paper

1. Read Your Question
2. Give the Answer
3. Prize

Go Over Application
  Problem 3-1
Quick Check (You can use your
notes)
• Name at least 3 of the 5 source
  documents we have discussed
      • Check, Sales Invoice, Receipt,
        Memo, Calculator Tape
• What is the difference between
  a general amount column and
  a special amount column
      • A special amount column is
        headed with an account title. A
        general amount column is NOT
• How are transactions recorded
  in a journal?
      • Chronological (by date)
Section 3-2: Journalizing (PAGE 63)
August 4th – Paid Cash for Insurance,
 $1200. Check No. 2
Bought Supplies on Account
August 7 - Bought Supplies on
 Account from Supply Depot, $500.
 Memorandum No. 1
Paid Cash on Account
August 11 – Paid Cash on Account
 to Supply Depot, $300. Check
 No. 3
Practice
Working Together
On Your Own
Journalizing Transaction that
affect OE and Receiving Cash
on Account
August 12 – Received Cash from
 Sales, $295. Tape No. 12
Sold Service on Account
August 12 – Sold services on account
 to Oakdale School, $350. Sales
 Invoice No. 1
Paid Cash for an Expense
August 12 – Paid Cash for Rent, $300.
 Check No. 4
Received Cash on Account
August 12 – Received cash on
 account from Oakdale School,
 $200. Receipt No. 2
 Paid Cash to Owner for Personal
               Use

August 12 – Paid cash to owner
 for personal use, $125. Check
 No. 6
Practice and Reviewing
Section 3
• Working Together
• On Your Own
Section 2-3
• Audit Your Understanding p. 66
  & 72

Homework
Application Problems 3-2 and 3-3
   Review Quiz
1. In what order are transactions
   recorded in a journal?
2. What are the four parts of a journal
   entry?
3. Why are source documents
   important?
4. What are the three special account
   columns?
5. What columns are used to record Sold
   services on Account?
       Section 3-4: Proving and Ruling a
                    Journal
When all but the last line on a journal page is
  used, columns are proved and ruled….
• Total are carried forward to the next page

Steps in Proving a Journal:
1. Add each amount column
2. Add Debit column totals, Add Credit
   Column totals
3. Verify that Total Debits=Total Credit
   •    Journal page is PROVED
   •    If errors- must correct first
Steps in Ruling a Journal Page
You Must Use a STRAIGHT EDGE!
• Rule single line across all amount columns
  – indicated that columns are to be totaled
• On the next line, write date
• Write Carried Forward in the Account
  Title column – checkmark placed on post
  ref. column
• Write in column totals
• Rule double line below totals
   – Indicates amounts are totals and
     debit=credits
Starting a NEW JOURNAL Page
• Write page number at top
• Write date (year, month
  and day)
• Write Brought Forward –
  check mark is placed in
  the post ref. column
• Record column totals from
  previous page
     Proving and Ruling at the
         End of the Month
• Rule single line to indicate
  columns will be added
• Write date
• Write the word Totals in the
  account title column –
  check mark is NOT placed
  in the post ref.
• Write each column total
• Rule double line -
  debits=credits
 Proving Cash
Determining that the amount of cash
   agrees with accounting records…
1. Add Cash at beginning and Cash
   Debit Column
2. Subtract Cash paid out- Cash Credit
   column
3. This equal cash balance at the end
   of the month
4. Compare to checkbook balance –
   next unused check stub.
Practice
• Section 3-4
  – Working Together
  – On Your Own
  – Application 4
• Work on Application
  Problems 5
Review
• Quotes/ Brainteasers
• Audit Test
• Go over Homework
Standard Accounting Practice
Procedures for error corrections,
  abbreviated words, signs and rulings.

• Popcorn reading
• Write on the board
• Students make a list
Practice & Application
• Crossword Puzzle
• Applications Problems 6-6
• Homework 6-7
Review
•   Catch Phrase
•   Study Guide
•   Review Game
•   Audit Test
•   Chapter Three Test

								
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