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Journalizing Transactions: Essential Guide to Source Documents and Entries

This chapter covers the fundamental principles of journalizing transactions in accounting. It emphasizes the necessity of entering corresponding account titles whenever a number is recorded in the general amount column. Key source documents such as checks, calculator tapes, receipts, and memorandums provide crucial information for journal entries. Detailed examples illustrate how to record transactions in a five-column journal, including cash investments, payments for supplies, insurance, and rent. Understanding these principles is vital for accurate financial record-keeping.

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Journalizing Transactions: Essential Guide to Source Documents and Entries

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  1. Journalizing Transactions Chapter 4

  2. Rule of Thumb • If you enter a number in the general amount column then a account title has to be entered also.

  3. SOURCE DOCUMENTS • DEF - A business paper from which information is obtained for a journal entry • Checks - a form for ordering a bank to pay cash . C1, C2 etc. . . . . . • Calculator Tapes - tapes from the cash register used to record sales for the day or the week. T1,T12 etc. . . . . .

  4. SOURCE DOCUMENTS CON’T • Receipts - a form giving written acknowledgement for cash received. R1,R2,R3 etc. . . . . • Memorandums - a form which gives a brief message describing the transaction. M34, M45 etc. . . . . .

  5. Transactions August 1, 2000 Received cash from owner as an investment $10,000. Receipt No. 1 Cash Ben Furman,Cap 10000 10000

  6. Recording Transactions in a Five Column Journal • Date • Debit • Credit • Source Document

  7. 1 Aug R1 Cash 10000 10000 Barbara Trevino’, Capital

  8. Transactions August 3, 2000 Paid cash for supplies $1,577. Check No. 1 Cash Supplies 1577 1577

  9. 1 Aug R1 Cash 10000 10000 Barbara Trevino’, Capital 3 Supplies C1 1577 Cash 1577

  10. Please try on your own on page 71

  11. Transactions August 4, 2000 paid cash for insurance $1200 Check No. 2 Cash Prepaid Insurance 1200 1200

  12. 1 Aug R1 Cash 10000 10000 Barbara Trevino’, Capital 3 Supplies C1 1577 Cash 1577 4 Prepaid Insurance C2 1200 Cash 1200

  13. Transactions August 7, 2000 Bought supplies on account from Butler Cleaning Supplies, $2720. Memorandum Supplies Butler Cleaning supplies 2720 2720

  14. 1 Aug R1 Cash 10000 10000 Barbara Trevino’, Capital 3 Supplies C1 1577 Cash 1577 4 Prepaid Insurance C2 1200 Cash 1200 7 M1 Supplies 2720 2720 Acct Pay- Butler Cleaning Supplies

  15. Transactions August 11, 2000 Paid cash on account to Butler Cleaning Supply $1360 Check No 3 Cash Butler Cleaning Supply 1360 1360

  16. Transactions August 12, 2000 Received cash form sales $525 Tape No Cash Sales 525 525

  17. Transactions August 12, 2000 Paid cash for Rent $250 Check No 4 Cash Rent Expense 250 250

  18. Transactions August 13, 2000 Paid cash to owner for personal use $100 check No 6 Cash Ben Furman, Drawing 100 100

  19. Standard Accounting practices • Please look at the rules that apply on page 84

  20. Problems for this chapter • On your own page 81 • Problems 4-1,2,3,4,5,6 • Next class We will do the first computer problem together…..Computer problem 4-5

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