chapter 3 journals, source documents, and recording entries in a journal
TRANSCRIPT
CHAPTER 3CHAPTER 3
Journals, Source Documents, and Recording Entries in a Journal
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3-1 JOURNALS, SOURCE DOCUMENTS, AND RECORDING ENTRIES IN A JOURNAL
A form for recording transactions in chronological order is called a journal.
-Each business uses a journal that best meets the needs of that business.
-Special Amount Column are headed with an account title.
Ex: Sales credit, Cash Credit, Cash Debit-General Amount Column are not headed with an acct title.
Ex: General Debit, General CreditFive Column Journal
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Debits = Credits (ALWAYS)Debits = Credits (ALWAYS)
The recording of debit + credit parts of a transaction is called double entry accounting.
-Each transaction affects at least two parts.Ex: Cash paid for advertising. Cash decreases & Expenses increase
Source Document - A business paper with information that
proves that the transaction did occur. (Concept: Objective Evidence)
-Transaction should be journalized only if it actually occurs.-Amounts recorded must be accurate & true.-To verify accuracy of a specific journal entry, compare the entry with the source document.
Source Documents:Checks, Invoices, Receipts, Memos, Calculator Tapes
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SOURCE DOCUMENTSSOURCE DOCUMENTSpage 58
receiptreceipt
memorandummemorandum
calculator tapecalculator tape
check
sales invoice
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4 PARTS OF AN ENTRY4 PARTS OF AN ENTRY
1 - Date2 - Debit - always get written first
3 - Credit4 - Source Document
When you journalize an entry remember there are four parts:
Before transaction is recorded it needs to beanalyzed into its debit & credit parts.
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RECEIVED CASH FROM OWNER AS AN INVESTMENTRECEIVED CASH FROM OWNER AS AN INVESTMENTpage 60
August 1. Received cash from owner as an investment, $5,000.00. Receipt No. 1.
1. Write the date in the Date column.
2. Write the debit amount in the Cash Debit column.
3. Record the credit amount in the General Credit column. Write the title of the account in the Account Title column.
4. Write the source document number in the Doc. No. column.
1122
4433 33
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PAID CASH FOR SUPPLIESPAID CASH FOR SUPPLIESpage 61
August 3. Paid cash for supplies, $275.00. Check No. 1.
1. Write the date in the Date column.
2. Record the debit amount in the General Debit column. Write the title of the account in the Account Title column.
3. Write the credit amount in the Cash Credit column.
4. Write the source document number in the Doc. No. column.
1144
3322 22
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page 63
August 4. Paid cash for insurance, $1,200.00. Check No. 2.
1. Write the date in the Date column.
2. Record the debit amount in the General Debit column. Write the title of the account in the Account Title column.
3. Write the credit amount in the Cash Credit column.
4. Write the source document number in the Doc. No. column.
1144
332222
LESSON 3-2 JOURNALIZING BUYING INSURANCE, LESSON 3-2 JOURNALIZING BUYING INSURANCE,
BUYING ON ACCOUNT, AND PAYING ON ACCOUNTBUYING ON ACCOUNT, AND PAYING ON ACCOUNT
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BOUGHT SUPPLIES ON ACCOUNTBOUGHT SUPPLIES ON ACCOUNTpage 64
August 7. Bought supplies on account from Supply Depot, $500.00. Memorandum No. 1.
1. Write the date in the Date column.2. Record the debit amount in the General Debit
column. Write the title of the account in the Account Title column.
3. Record the credit amount on the next line in the General Credit column. Write the title of the account in the Account Title column.
4. Write the source document number in the Doc. No. column on the first line of the entry.
11 44 2222
3333
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PAID CASH ON ACCOUNTPAID CASH ON ACCOUNTpage 65
August 11. Paid cash on account to Supply Depot, $300.00. Check No. 3.
1. Write the date in the Date column.
2. Record the debit amount in the General Debit column. Write the title of the account in the Account Title column.
3. Write the credit amount in the Cash Credit column.
4. Write the source document number in the Doc. No. column.
443322
2211
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page 67
August 12. Received cash from sales, $295.00. Tape No. 12.
1. Write the date in the Date column.
2. Write the debit amount in the Cash Debit column.
3. Write the credit amount in the Sales Credit column. Place a check mark in the Account Title column. A check mark is also placed in the Post. Ref. column.
4. Write the source document number in the Doc. No. column.
44 2211 3333 33
LESSON 3-3 JOURNALIZING TRANSACTIONS THAT AFFECT LESSON 3-3 JOURNALIZING TRANSACTIONS THAT AFFECT OWNER’S EQUITY AND RECEIVING CASH ON ACCOUNTOWNER’S EQUITY AND RECEIVING CASH ON ACCOUNT
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SOLD SERVICES ON ACCOUNTSOLD SERVICES ON ACCOUNTpage 68
August 12. Sold services on account to Oakdale School, $350.00. Sales Invoice No. 1.
1. Write the date in the Date column.
2. Record the debit amount in the General Debit column. Write the title of the account in the Account Title column.
3. Write the credit amount in the Sales Credit column.
4. Write the source document number in the Doc. No. column.
4411 332222
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PAID CASH FOR AN EXPENSEPAID CASH FOR AN EXPENSEpage 69
August 12. Paid cash for rent, $300.00. Check No. 4.
1. Write the date in the Date column.
2. Write the debit amount in the General Debit column. Write the title of the account in the Account Title column.
3. Write the credit amount in the Cash Credit column.
4. Write the source document number in the Doc. No. column.
4411 332222
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RECEIVED CASH ON ACCOUNTRECEIVED CASH ON ACCOUNTpage 70
August 18. Received cash on account from Oakdale School, $200.00. Receipt No. 2.
1. Write the date in the Date column.
2. Write the debit amount in the Cash Debit column.
3. Record the credit amount in the General Credit column. Write the title of the account in the Account Title column.
4. Write the source document number in the Doc. No. column.
11 2244
3333
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PAID CASH TO OWNER FOR PERSONAL USEPAID CASH TO OWNER FOR PERSONAL USEpage 71
August 18. Paid cash to owner for personal use, $125.00. Check No. 6.
1. Write the date in the Date column.
2. Write the debit amount in the General Debit column. Write the title of the account in the Account Title column.
3. Write the credit amount in the Cash Credit column.
4. Write the source document number in the Doc. No. column.
4411 332222
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3-4 PROVING AND RULING A JOURNAL3-4 PROVING AND RULING A JOURNALpage 73
1. Add each of the amount columns.2. Add the debit column totals, and then add the credit column totals.3. Verify that the total debits and total credits are equal.
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When you have used all but the last line of a journal page, columns are proved and ruled before totals are carried forward to the next page.
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RULING A JOURNAL PAGERULING A JOURNAL PAGE
5. Rule double lines.
page 74
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1. Rule a single line.
2. Write the date.
3. Write Carried Forward.
4. Write each column total.
Double lines mean DEBITS = CREDITS
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STARTING A NEW JOURNAL PAGESTARTING A NEW JOURNAL PAGEpage 75
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441. Write the page number.
2. Write the date.
3. Write Brought Forward in the Account Title column. A check mark is also placed in the Post. Ref. column.
4. Record the column totals brought forward from the previous page.
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PROVING AND RULING A JOURNAL AT THE PROVING AND RULING A JOURNAL AT THE END OF A MONTHEND OF A MONTH page 75
5. Rule double lines.
1122 33 55
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1. Rule a single line.
2. On the next line, write the date.
3. Write the word Totals.
4. Write each column total. A journal is ruled at the end of the month regardless of how full it is.