chapter 6 accounting - portnet.org
TRANSCRIPT
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Accounting
Chapter 6
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Aim: What are four source documents and when would they be used?
Do Now: Take a Do Now slip.
Answer:
• Why do people use journals?
• Have you ever kept a daily journal of the things that happen during your day? Give an example.
*Take out the Chapter 6 packet.
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Accounting Cycle
• Accounting Cycle – activities performed in an accounting period that help the business keep its records in an orderly fashion.
• Figure 6-1 accounting cycle (pg. 132)
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Accounting Cycle
1. Collect an verify source documents 2. Analyze each transaction 3. Journalize each transaction 4. Post to the ledger 5. Prepare a trial balance 6. Prepare a work sheet 7. Prepare financial statements 8. Journalize and post closing entries 9. Prepare a post-closing trial balance
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The First Step – Collecting and Verifying Source Documents
• Source Document – a paper prepared as evidence that a transaction occurred.
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Examples of Source Documents
• Invoice (bill)– lists specific information about a business transactions involving the buying or selling of an item on account.
• The invoice contains: – the date of the transaction
– the quantity
– description
– cost of each item.
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Receipt
• Receipt – a record of cash received by a business.
• It includes:
– the date the payment was received
– the name of the person or business from whom the payment was received
– the amount of the payment.
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Memorandum
• Memorandum – a brief written message that describes a transaction that takes place within a business.
• A memorandum is often used if no other source document exists for the business transaction.
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Check Stub
• Check Stub – the check stub lists the same information that appears on a check: – The date written
– the person or business to whom the check was written
– the amount of the check.
– The check stub also shows the balance in the checking account before and after each check is written.
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Problem 6.1 pg. 135
• Analyze the invoice shown and answer the questions.
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Exit Slip
• Write down two source documents you might use in your personal life.
• What problems might arise if you did not keep source documents?
Write 3 sentences on the importance of keeping source documents for your personal life.
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Aim: What are four source documents and when would they be used?
Do Now: Take a Do Now slip.
On October 26th, Erikson Inc. issued Check 325 for $2,500 to purchase new office furniture.
Answer: What source document would be prepared as evidence of this transaction?
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Source Documents
• Invoice (bill)– lists specific information about a business transactions involving the buying or selling of an item on account.
• Receipt – a record of cash received by a business.
• Memorandum – a brief written message that describes a transaction that takes place within a business.
• Check Stub – the check stub lists the same information that appears on a check.
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Group Roles • Accountant –
– Write down the 5 – 7 business transactions. – Record each transaction in an appropriate T account – Test for the equality of debits and credits
• Business Owner(s) – – Prepare the appropriate source documents
• Invoice, Receipt, Memorandum and Check Stub
• Artist – Design the company logo and slogan
*You will be presenting your company to the class. All members must stand up front but you may
only have one speaker for the group*
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Exit Slip
• Write down two source documents you might use in your personal life.
• What problems might arise if you did not keep source documents?
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Aim: How do you record business transactions in a general journal?
Do Now: Take a post it.
Answer:
• Your business just purchased new equipment on account for $3,000. What source document would be prepared for this transaction?
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Project • Accountant –
– Write down the 5 – 7 business transactions. – Record each transaction in an appropriate T account – Test for the equality of debits and credits
• Business Owner – – Prepare the appropriate source documents
• Invoice, Receipt, Memorandum and Check Stub
• Artist – Design the company logo and slogan
*You will be presenting your company to the class. All members must stand up front but you may
only have one speaker for the group*
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Presentation • State your company name and service you
provide.
• Discuss your logo and slogan and why you chose them.
• Talk about the accounts your business has and the type of source documents you deal with.
• SMILE
You have 20 minutes to finish you project and practice your presentation.
If you are done, complete problem 6.1 in your workbook
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Homework
• Department stores often have fiscal years that begin on February 1st and end on January 31st of the following year.
– Why do you think that is?
• School districts usually have fiscal years that begin on July 1st and end on June 30th.
– Why do you think that is?
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Aim: How do you record business transactions in a general journal?
Do Now:
• Take out your notebook and write down the Aim.
• Take out your HW (answers to questions)
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Accounting Cycle
1. Collect an verify source documents 2. Analyze each transaction 3. Journalize each transaction 4. Post to the ledger 5. Prepare a trial balance 6. Prepare a work sheet 7. Prepare financial statements 8. Journalize and post closing entries 9. Prepare a post-closing trial balance
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The Accounting Period
• Accounting period – accounting records are summarized for a certain period of time. – Month, quarter or a year.
• Fiscal year – an accounting period of 12 months.
• Calendar year – A fiscal year that begins on January 1st and ends on December 31st.
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Accounting period
• Department stores often have fiscal years that begin on February 1st and end on January 31st of the following year.
– Why do you think that is?
• School districts usually have fiscal years that begin on July 1st and end on June 30th.
– Why do you think that is?
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Recording Business Transactions in a
Journal
• Journal – a record of the transactions of a business. – Kept in chronological order (the order in which the
transactions occur)
• Journalizing – process of recording business transactions in a journal.
• Also called the book of original entry
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Recording a General Journal Entry
• General journal – an all-purpose journal in which all of the transactions of a business may be recorded.
• The general journal has two amount columns. • The amount column on the left records debits.
• The amount column on the right records credits.
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Journal Entry • On Nov. 1st, Maria Sanchez took $25,000 of personal
savings and deposited that amount in the business checking account, in the name of Roadrunner Delivery Service Memorandum 1.
• What is the complete entry in general journal form?
General Journal
Date Description
Post Ref. Debit Credit
1 1
2 2
3 3
4 4
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Assignment
• Complete Problems 6.2 & 6.3
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Aim: How do you record business transactions in a general journal?
Do Now: Take a general journal slip.
On the back of the slip answer: 1. Are journal pages numbered?
Read page 148 in the Chapter 6 packet:
2. How are you supposed to correct errors in the general journal?
3. Complete problem 6.4 from last class.
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Do Now Part Two!
Use the following transaction to fill out the slip:
• K. Erikson withdrew $5,000 from the business for personal use, memorandum 1.
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Do Now K. Erikson withdrew $5,000 from the
business for personal use, memorandum 1.
General Journal
Date Description
Post Ref. Debit Credit
1 1
2 2
3 3
4 4
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Problem 6.4
• General Journal
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Problem 6.5
• In your group, complete problem 6.5.
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Exit Summary
• Recording account information in chronological order is known as:
1. Posting
2. Journalizing
3. Analyzing
4. Processing