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Accounting Chapter 3. Journalizing Transactions Kayla Wegley. Basic Terms. Journal: A form for recording transactions in chronological order Journalizing: Recording transactions Special Amount Column: Account with a heading in the journal

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accounting chapter 3

Accounting Chapter 3

Journalizing Transactions

Kayla Wegley

basic terms
Basic Terms
  • Journal: A form for recording transactions in chronological order
  • Journalizing: Recording transactions
  • Special Amount Column: Account with a heading in the journal
  • General Amount Column: Account without a heading in the journal
  • Source document: Business paper from which information is obtained for an entry
  • Proving cash: Determining that the amount of cash agrees with the accounting records
types of source documents
Types of Source Documents

Check

Memorandum

Sales Invoice

Receipt

journalizing transactions
Journalizing Transactions
  • Each transaction must be journalized with the date, Account Title, Document number, and a credit and debit entry to a general column, and a cash or sales column.
journalizing an investment
Journalizing an Investment
  • Account title is business owners name
  • Source document is a receipt
  • Credit to general, debit to cash

Debit Credit

Debit Credit

journalizing purchases on account purchases
Journalizing Purchases, On Account Purchases
  • A purchase made with Cash is titled with the account to purchase was made to, debited in general, and credited in cash
  • Purchases made on account are journalized only in the general column because no cash is leaving the business

Debit Credit

Debit Credit

Debit Credit

Debit Credit

journalizing sales
Journalizing Sales
  • Journalizing Sales will utilize the Sales Credit column and the Cash Debit Column. Source document number will always be the day of the month. A check mark is used for the account title, and in the Post Reference Column

Debit Credit

Debit Credit

Sales

journalizing selling services on account paying for expenses and owner withdrawals
Journalizing Selling Services on Account, Paying for Expenses, and Owner Withdrawals
  • Services on account are titled with the business sold to, debited to general, and credited to Sales
  • Expenses are debited to general, and credited to cash
  • Drawing is debited to general, and credited to cash

Debit Credit

Debit Credit

Sales

Debit Credit

Debit Credit

Debit Credit

Debit Credit

proving the journal
Proving the Journal
  • To prove a journal page, debits and credits must be verified to be equal

Each column of journal

ruling a journal and beginning a new page
Ruling a Journal, and Beginning a New Page
  • At the end of each journal page, each column must be totaled and double ruled underneath.
  • Totals are labeled at the end of the new page “carried forward” and at the beginning of the new page “brought forward”
  • At the end of the fiscal period, the last journal page is totaled in each column, and then double ruled