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  1. Double Entry System 2 DR CR

  2. The Accounting System to record transactions Click me!

  3. Objectives • At the end of the lesson, students should be able to : • know what are General Journal and Special • Journals. • able to record simple business transactions • using the Double Entry Accounting System • into the General / Special Journals.

  4. An Overview… General Journal Special Journals Ledger Accounts Trial Balance Adjustments Prepare Simple Financial Statements

  5. GENERAL JOURNAL Date Particulars Debit Credit $ $

  6. (Debit) (Credit) (Credit) Assets = Owner’s Equity + Liabilities Debit Credit Credit Credit Debit Debit

  7. a) John began business with cash in hand $5000 on 1 January 2000. General Journal Date Particulars Debit Credit $ $ 2000 Jan 1 5000 Cash in hand 5000 Capital-John John began business with cash $5000.

  8. b) John began business with a bank loan of $8000 on 1 January 2000. General Journal Date Particulars Debit Credit $ $ 2000 Jan 1 8000 Cash in hand 8000 Loan from bank John began business with a bank loan of $8000.

  9. John used $2000 to buy a motor vehicle • for business use on 16 March 2000. General Journal Date Particulars Debit Credit $ $ 2000 Mar 16 2000 Motor Vehicle 2000 Cash John bought a motor vehicle worth $2000.

  10. John repaid bank loan of $1500 using cash • on 27 Oct 2000. General Journal Date Particulars Debit Credit $ $ 2000 Oct 27 1500 Loan from Bank 1500 Cash John repaid the bank loan.

  11. John sold goods at $6000 on credit to • ABC Ltd on 26 November 2000. General Journal Date Particulars Debit Credit $ $ 2000 Nov 26 6000 Debtors (ABC Ltd) 6000 Sales Sales worth $6000 to ABC Ltd.

  12. f) Stock count was conducted and closing stock was found to be $10,000 on 31 Dec 2000. General Journal Date Particulars Debit Credit $ $ 2000 Dec 31 10,000 Stock 10,000 Trading To record closing stock worth $10,000.

  13. It is common for the owner to draw money or goods from the firm for personal use anytime. According to the Accounting Entity concept, we must record the event even though he is the owner of the firm. What do you call this? Click me!

  14. It is common for the owner to draw money or goods from the firm for personal use anytime. According to the Accounting Entity concept, we must record the event even though he is the owner of the firm. DRAWINGS

  15. The owner withdrew cash $1000 for his • personal use on 1 April 2000. General Journal Date Particulars Debit Credit $ $ 2000 April 1 1000 Drawings 1000 Cash To record drawings of $1000 cash.

  16. An Overview… General Journal Special Journals Ledger Accounts Trial Balance Adjustments Prepare Simple Financial Statements

  17. Purchases Journal Returns Outwards Journal Sales Journal Returns Inwards Journal 4 SPECIAL JOURNALS

  18. Date Particulars Credit $ Mar 2 Purchases 200 Creditors-ABC 200 April 7 Purchases 600 Creditors-Peter 600 May 12 Purchases 1000 Creditors-PCK 1000 Reason for the purchases journal… General Journal Debit 2000 $

  19. Date Particulars Cr $ Mar 2 Creditors-ABC 200 April 7 Creditors-Peter 600 May 12 Creditors-PCK 1000 Total purchases to be debited 1800 Purchases Journal… Dr Purchases Cr Creditors Purchases Journal 2000

  20. Date Particulars Dr $ Mar 5 Creditors-SBS 100 April 9 Creditors-David 600 May 26 Creditors-PCK 500 Total returns outwards to be credited 1200 Returns Outwards Journal… Dr Creditors Cr Returns Outwards Returns Outwards Journal 2000

  21. Date Particulars Cr $ Mar 2 Debtors-ABC 200 Sales 200 April 7 Debtors-Peter 600 Sales 600 May 12 Debtors-PCK 1000 Sales 1000 Reason for the Sales Journal… General Journal Dr 2000 $

  22. Date Particulars Dr $ Mar 2 Debtors-ABC 200 April 7 Debtors-Peter 600 May 12 Debtors-PCK 1000 Total sales to be credited 1800 Sales Journal… Dr Debtors Cr Sales Sales Journal 2000

  23. Date Particulars Cr $ Mar 9 Debtors-ABC 100 April 9 Debtors-Peter 200 May 24 Debtors-PCK 300 600 Total returns inwards to be debited. Returns Inwards Journal… Dr Returns Inwards Cr Debtors Returns Inwards Journal 2000

  24. Tips to remember… OUT IN Credit Returns Outwards Debit Returns Inwards