Chapter 6 - Journalizing. Book of original entry. Transactions recorded in chronological order....

Chapter 6 - Journalizing

Book of original entry.

Transactions recorded in chronological order.

Purpose of the Journal:

1. Shows the complete effects of a transaction.

2. Provides a chronological record of transactions.

3. Helps to prevent or locate errors because the debit and credit amounts can be easily compared.

The JournalThe Journal

SO 4 Explain what a journal is and how it helps in the recording SO 4 Explain what a journal is and how it helps in the recording process.process.

Chapter 6.1

16

• Enter the date

Recording Journal Entries

Chapter 6.1

16Date

99Nov.Nov.20—20—

Chapter 6.1

16Step 2

99Nov.Nov.20—20—

• Enter the debit account(s)

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies

• Enter the debit amount(s)

Step 3

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Enter Debit Amounts

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

• Indent and enter the credit account(s)

Step 4

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank

Enter Credit Accounts

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank

• Enter the credit amount(s)

Step 5

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Enter Credit Amounts

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

• Write a brief explanation (at left margin)

Step 6

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

Write Explanation

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

• Skip a line and complete next entry

Skip a line

Chapter 6.1

16

1 3 5 –

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank

Letterhead and envelopes; cheque #40

12

Record the Next Entry

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

12 Equipment

Record the Next Entry

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

12 Equipment 12 0 0 0 –

Record the Next Entry

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

12 Equipment 12 0 0 0 –

A/P—World Wide Fibre Optics

Record the Next Entry

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

12 Equipment 12 0 0 0 –

A/P—World Wide Fibre Optics 10 0 0 0 –

Record the Next Entry

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

12 Equipment 12 0 0 0 –

A/P—World Wide Fibre Optics 10 0 0 0 –

Bank

Record the Next Entry

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

12 Equipment 12 0 0 0 –

A/P—World Wide Fibre Optics 10 0 0 0 –

Bank 2 0 0 0 –

Record the Next Entry

Chapter 6.1

16

99Nov.Nov.20—20—

Supplies 1 3 5 –

Bank 1 3 5 –

Letterhead and envelopes; cheque #40

12 Equipment 12 0 0 0 –

A/P—World Wide Fibre Optics 10 0 0 0 –

Bank 2 0 0 0 –

Network software installation; issued cheque

#41 with the balance due in 30 days.

Record the Next Entry

Chapter 6.1

16

Supplies 1 3 5 –

Bank

Letterhead and envelopes; cheque #40

12 Equipment

A/P—World Wide Fibre Optics

Network software installation; issued cheque

#41 with the balance due in 30 days.

12 0 0 0 –

Bank

10 0 0 0 –

2 0 0 0 –

1 3 5 –

99Nov.Nov.20—20—

• Consecutive page numbers

Page Numbers

Chapter 6.1

16

Supplies 1 3 5 –

Bank

Letterhead and envelopes; cheque #40

12 Equipment

A/P—World Wide Fibre Optics

Network software installation; issued cheque

#41 with the balance due in 30 days.

12 0 0 0 –

Bank

10 0 0 0 –

2 0 0 0 –

1 3 5 –

99Nov.Nov.20—20—

• Each journal entry balances

Balanced Entries

Chapter 6.1

16

Supplies 1 3 5 –

Bank

Letterhead and envelopes; cheque #40

12 Equipment

A/P—World Wide Fibre Optics

Network software installation; issued cheque

#41 with the balance due in 30 days.

12 0 0 0 –

Bank

10 0 0 0 –

2 0 0 0 –

1 3 5 –

99Nov.Nov.20—20—

• A “compound entry” affects more than two accounts

Compound Entries

Chapter 6.1

16

Supplies 1 3 5 –

Bank

Letterhead and envelopes; cheque #40

12 Equipment

A/P—World Wide Fibre Optics

Network software installation; issued cheque

#41 with the balance due in 30 days.

12 0 0 0 –

Bank

10 0 0 0 –

2 0 0 0 –

1 3 5 –

99Nov.Nov.20—20—

• Account titles are capitalized

Account Titles

Chapter 6.1

16

• Amounts in the opening journal entry are the same as amounts on the opening balance sheet

Bank

Supplies

Equipment

Bank Loan

Opening financial position of Shirley Cassar

19 5 5 0 –

Shirley Cassar, Capital

10 0 0 0 –

1 4 0 0 –3030Oct.Oct.20—20—

Automobile

22 0 9 0 –

8 7 1 5 –

2 4 2 5 –

The Opening Entry