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    The Recording Process

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    febrythiodor
    The document discusses accounting concepts including accounts, debits and credits, the accounting equation, journals, ledgers, posting, and the recording process. It provides examples to illustrate journal entries, posting to ledger accounts, and preparing a trial balance. Accounts track increases and decreases to assets, liabilities, equity, revenues, and expenses. Debits and credits are used in double-entry bookkeeping to keep the accounting equation in balance, with debits equaling credits. Journals record transactions in chronological order, while ledgers contain all accounts, and posting transfers journal amounts to ledger accounts.

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    The Recording Process

    Uploaded by

    febrythiodor
    131 views21 pages
    The document discusses accounting concepts including accounts, debits and credits, the accounting equation, journals, ledgers, posting, and the recording process. It provides examples to illustrate journal entries, posting to ledger accounts, and preparing a trial balance. Accounts track increases and decreases to assets, liabilities, equity, revenues, and expenses. Debits and credits are used in double-entry bookkeeping to keep the accounting equation in balance, with debits equaling credits. Journals record transactions in chronological order, while ledgers contain all accounts, and posting transfers journal amounts to ledger accounts.

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    Recording Process

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    The document discusses accounting concepts including accounts, debits and credits, the accounting equation, journals, ledgers, posting, and the recording process. It provides examples to illustrate journal entries, posting to ledger accounts, and preparing a trial balance. Accounts track increases and decreases to assets, liabilities, equity, revenues, and expenses. Debits and credits are used in double-entry bookkeeping to keep the accounting equation in balance, with debits equaling credits. Journals record transactions in chronological order, while ledgers contain all accounts, and posting transfers journal amounts to ledger accounts.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    131 views21 pages

    The Recording Process

    Uploaded by

    febrythiodor
    The document discusses accounting concepts including accounts, debits and credits, the accounting equation, journals, ledgers, posting, and the recording process. It provides examples to illustrate journal entries, posting to ledger accounts, and preparing a trial balance. Accounts track increases and decreases to assets, liabilities, equity, revenues, and expenses. Debits and credits are used in double-entry bookkeeping to keep the accounting equation in balance, with debits equaling credits. Journals record transactions in chronological order, while ledgers contain all accounts, and posting transfers journal amounts to ledger accounts.

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    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 21

    2-1

    The Account
    Account

    Record of increases and decreases


    in a specific asset, liability, equity,
    revenue, or expense item.

    Debit = Left

    Credit = Right

    An account can be
    illustrated in a Taccount form.

    2-2

    LO 1 Explain what an account is and how it helps in the recording process.

    The Account
    Debits and Credits
    Double-entry system

    2-3

    Each transaction must affect two or more accounts to


    keep the basic accounting equation in balance.

    Recording done by debiting at least one account and


    crediting another.

    DEBITS must equal CREDITS.

    LO 2 Define debits and credits and explain their use


    in recording business transactions.

    Debit/Credit Rules
    Statement of
    Financial Position

    Income Statement

    Asset = Liability + Equity

    Revenue - Expense

    Debit

    Credit

    2-4

    LO 2 Define debits and credits and explain their use


    in recording business transactions.

    Steps in the Recording Process


    The Journal

    Book of original entry.

    Transactions recorded in chronological order.

    Contributions to the recording process:


    1. Discloses the complete effects of a transaction.
    2. Provides a chronological record of transactions.
    3. Helps to prevent or locate errors because the debit and
    credit amounts can be easily compared.

    2-5

    LO 4 Explain what a journal is and how it helps in the recording process.

    Steps in the Recording Process


    Journalizing - Entering transaction data in the journal.
    Illustration: On September 1, shareholders invested 15,000 cash
    in the corporation in exchange for share of stock, and Softbyte
    purchased computer equipment for 7,000 cash.
    Illustration 2-14

    General Journal

    Sept. 1

    Cash

    15,000

    Share capital-ordinary
    Equipment
    Cash
    2-6

    15,000
    7,000
    7,000

    LO 4 Explain what a journal is and how it helps in the recording process.

    Steps in the Recording Process


    Simple and Compound Entries
    Illustration: On July 1, Tsai Company purchases a delivery truck
    costing NT$420,000. It pays NT$240,000 cash now and agrees to
    pay the remaining NT$180,000 on account.
    Illustration 2-15

    General Journal

    July 1

    2-7

    Equipment

    420,000

    Cash

    240,000

    Accounts payable

    180,000

    LO 4 Explain what a journal is and how it helps in the recording process.

    Steps in the Recording Process


    The Ledger

    General Ledger contains the entire group of accounts


    maintained by a company.
    Illustration 2-16

    2-8

    LO 5 Explain what a ledger is and how it helps in the recording process.

    Steps
    Posting
    process of
    transferring
    amounts from
    the journal to
    the ledger
    accounts.

    Illustration 2-18

    2-9

    LO 6 Explain what posting is and how it helps in the recording process.

    The Recording Process Illustrated


    Follow these steps:
    1. Determine what
    type of account is
    involved.
    2. Determine what
    items increased or
    decreased and by
    how much.
    3. Translate the
    increases and
    decreases into
    debits and credits.
    Illustration 2-20
    2-10

    LO 6

    The Recording Process Illustrated


    Illustration 2-21

    2-11

    LO 6

    The Recording Process Illustrated


    Illustration 2-22

    2-12

    LO 6

    The Recording Process Illustrated


    Illustration 2-23

    2-13

    LO 6

    The Recording Process Illustrated


    Illustration 2-24

    2-14

    LO 6

    The Recording Process Illustrated

    Illustration 2-25

    2-15

    LO 6

    The Recording Process Illustrated


    Illustration 2-26

    2-16

    LO 6

    The Recording Process Illustrated


    Illustration 2-27

    2-17

    LO 6

    The Recording Process Illustrated


    Illustration 2-28

    2-18

    LO 6

    The Recording Process Illustrated


    Illustration 2-29

    2-19

    LO 6

    2-20

    Illustration 2-31

    Trial Balance
    Illustration 2-32

    2-21

    LO 7 Prepare a trial balance and explain its purposes.

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