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    Journalyzing Transactions

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    Christina Larubis
    The document defines key terms related to journalizing transactions such as journal, debit, credit, and double-entry accounting. It explains how to record transactions in a journal with the date, debit, credit, and source document. It also describes how to prove that a journal entry is correct by adding the debit and credit columns and verifying they are equal. Finally, it provides best practices for accounting such as correcting errors, writing amounts clearly, and using ruled lines.

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    Journalyzing Transactions

    Uploaded by

    Christina Larubis
    254 views11 pages
    The document defines key terms related to journalizing transactions such as journal, debit, credit, and double-entry accounting. It explains how to record transactions in a journal with the date, debit, credit, and source document. It also describes how to prove that a journal entry is correct by adding the debit and credit columns and verifying they are equal. Finally, it provides best practices for accounting such as correcting errors, writing amounts clearly, and using ruled lines.

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    The document defines key terms related to journalizing transactions such as journal, debit, credit, and double-entry accounting. It explains how to record transactions in a journal with the date, debit, credit, and source document. It also describes how to prove that a journal entry is correct by adding the debit and credit columns and verifying they are equal. Finally, it provides best practices for accounting such as correcting errors, writing amounts clearly, and using ruled lines.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    254 views11 pages

    Journalyzing Transactions

    Uploaded by

    Christina Larubis
    The document defines key terms related to journalizing transactions such as journal, debit, credit, and double-entry accounting. It explains how to record transactions in a journal with the date, debit, credit, and source document. It also describes how to prove that a journal entry is correct by adding the debit and credit columns and verifying they are equal. Finally, it provides best practices for accounting such as correcting errors, writing amounts clearly, and using ruled lines.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 11

    Chapter 5 Journalizing

    Transactions
     Definitions:
    – Journal-A form for recording transactions in
    chronological order.(A book of original entry)
    – Journalizing-Recording transactions in a
    journal.
    – Special Amount Columns-A journal amount
    column headed with an account title.
    Definitions Continued
    – General Amount Column-A journal amount
    column that is not headed with an account title.
    – Entry-Information for each transaction recorded
    in a journal.
    – Double-Entry Accounting-The recording of
    debit and credit parts of a transaction.
    – Source Document-A business paper from which
    information is obtained for a journal entry.
    Definitions Continued
    – Check-A business form ordering a bank to pay
    cash from a bank account.
    – Receipt-A business form giving written
    acknowledgment for cash received.
    – Memorandum-A form on which a brief
    message is written describing a transaction.
    – Proving Cash-Determining that the amount of
    cash agrees with the accounting records.
    Chapter Highlights
     Four parts of an entry  The terms Debit and
    – Date Credit are abbreviated
    – Debit at dr and cr. These are
    – Credit derived from Latin
    – Source Document and Italian words
    – Before a transaction is debere and credere.
    recorded in a journal, it Ledgers with debit and
    must be analyzed into credit sides became
    its debit and credit popular in the 17th
    parts.
    century in Europe
    Proving a Journal Page
     Proving is showing  Proving has 3 steps
    that total debits = total – 1.Add each of the
    credits. amount columns.
    – 2.Add the debit column
    totals, and then ad the
    credit column totals.
    – 3.Verify that debits =
    credits
    Ruling
     Rule a single line  Write words carried
    across all amount forward if bringing
    columns directly totals to the top of the
    below the last entry to next page if final totals
    indicate that the enter the word
    columns are to be “totals”.
    added. Also place a check
     On the next line write mark in the post
    the date in the date reference column(PR)
    column.
    Rulings Continued
     On the top of the new  Rule double lines
    page if not final totals blow the column totals
    write Brought Forward across all amount
    in the Account Title columns. The double
    Column and place a lines mean that the
    check mark in the PR totals have been
    column. verified.
     Write each column
    total below the single
    ruled line.
    Prove Cash
     1-Cash Balance on  3-Subtract cash paid
    hand at beginning of out during the fiscal
    fiscal period period(Usually the
     2Add the cash cash credit total)
    received during the  4-Equal the cash on
    fiscal period(This is hand at the end of the
    usually the cash debit fiscal period.
    total)  5-Verify that the cash
    balance = the
    checkbook balance.
    General Accounting Practices
     Errors are corrected in a way that does not
    cause doubts about whether the information
    is correct. Draw a neat line through an error
    and write the correction above the cancelled
    item.
     Words in accounting record are written in
    full when space permits. All items need to
    be legible. Only abbreviate when space is
    limited.
    Practices Continued
     Dollars and cents signs and decimal points
    are not used when writing amount on ruled
    account paper.
     Two zeros are written in the cents column
    when an amount is in even dollars otherwise
    doubts may arise as to amounts.
    Practices Continued
     A single ruled line indicates addition or
    subtraction.
     A double ruled line indicates totals are
    verified and correct.
     Neatness is important and rulers should be
    used to make rulings.

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