WELCOME

Minhaj University, Lahore

Group Presentation, BBA, Semester 1I

Members:
•Tayyab Ali Roll # : 02
•Jibraeel Qadri Roll # : 25
•Ali Hassan Roll # : 04
Instructor:
Honorable, Rana Tanveer Hussain
ACCOUNTING CYCLE

RECORDING JOURNAL AND

POSTING IN LEDGERS
 NEED TO KNOW

Accounting Cycle Journal Ledgers

 ACCOUNTING CYCLE

The accounting cycle is a collective process of identifying,

analyzing, and recording the accounting events of a company
includes;
1. Recording (in Journal)
2. Classifying (in Ledger)
3. Summarizing (in income St. & balance sheet)

• It is a standard 8-step process.

Fig: Accounting Cycle
 JOURNAL

I. Recording the transactions in chronological order in the book of

original entry is called journal.

II. The information about each business transaction in initially

recorded in an accounting record is called the journal.

• Entering transaction data in the journal is known as journalizing.

Examples: Recording Journal
I. A business received $1,300 for their services. Both the Cash and Revenue
accounts increase. Meaning, Cash will be debited for $1,300, and Revenue
credited for $1,300.

Date Account Titles and explanation Debit Credit

September 30 Cash $1300  

    Revenue   $1300

     (Received service payment)    

I. When a client pays for a sales invoice, cash is debited, and
account receivable credited:

Date Account Titles and explanation Debit Credit

January 1st Cash $10000  

    Accounts Receivable   $10000

         
 LEDGERS

Collection of accounts in which

account transactions are recorded.
Each account has an opening balance
and would record transactions in either
debit columns or credit columns and
the ending or closing balance.
How to post journal entries to the general ledger?

To keep your records accurate, you should post to the general ledger as you
make transactions. At the end of each period (e.g., month), transfer journal
entries into your ledger.
Ledger entries are
Posting in ledger
Transferring journal entries to the ledger account is called posting. The entire group of accounts
maintained by a company is the ledger. The ledger keeps all the information about changes in
specific account balances in one place. The ledger accounts shown below are derived from the
journal entries of Company.
Exercise: Posting in Ledgers

Jan20 Michel McBrayn and family invested $80000 in exchange for capital stock

Jan21 Overnight auto service purchased the land from the city of 52000 cash.

Jan 22 The purchase price was 36000 overnight made a 6000 cash down payment and
issued a 90 days interest bearing note payable for the remaining 30000.

Jan 23 Overnight purchased tools and equipment on account of 13800 due in 6 days from
snappy tools.

Jan 24 Overnight auto service sold the access tools for 1800 to Ace towing.

Jan 26 Overnight received 600 in partial collection of the accounts receivable from Ace
towing.

Jan 27 Overnight made a 6800 partial payment of its account payable to Snappy tool.
 OVERNIGHT AUTO SEVICE
GENERAL JOURNAL JAN 2015
   
Date Account Title Debit Credit
2015      
Jan,20 Cash $ 80,000.00  
  Capital   $ 80,000.00
21 Land $ 52,000.00  
  Cash   $ 52,000.00
22 Building $ 36,000.00  
  Cash   $ 6,000.00
  Notes Payable   $ 30,000.00
23 Tools and Equipment $ 13,800.00  
  Accounts Payable   $ 13,800.00
24 Account Receviable $ 1,800.00  
  Tools and Equipment   $ 1,800.00
26 Cash $ 600.00  
  Account Receviable   $ 600.00
27 Account Payable $ 6,800.00  
  Cash   $ 6,800.00
 OVERNIGHT AUTO SERVICE
THE LEDGER

Cash
Date Debit Credit Balance Accounts Receivable
2015      Date Debit Credit Balance
20-Jan $ 80,000.00   $ 80,000.00
21  $ 52,000.00 $ 28,000.00 2015     
22  $ 6,000.00 $ 22,000.00
24-Jan $ 1,800.00   $ 1,800.00
26 $ 600.00   $ 22,600.00
27  $ 6,800.00 $ 15,800.00 26  $ 600.00 $ 1,200.00

Tools And Equipment Building

Date Debit Credit Balance
Date Debit Credit Balance
2015     
2015     
23-Jan $ 13,800.00   $ 13,800.00
    $ 1,800.00 $ 12,000.00 22-Jan $ 36,000.00   $ 3,600.00
 Land Notes Payable

Date Debit Credit Balance Date Debit Credit Balance

2015      2015     

21-Jan $ 52,000.00   $ 52,000.00 22-Jan  $ 30,000.00 $ 30,000.00

Account Payable Capital stock

Date Debit Credit Balance
Date Debit Credit Balance
2015     
2015     
23-Jan  $ 13,800.00 $ 13,800.00

27 $ 6,800.00   $ 7,000.00 20-Jan  $ 80,000.00 $ 80,000.00

Exercise: Posting in Ledgers

Jan,31 Recorded revenue of $2200 all of which was received in cash.

Jan,31 Paid employees wages earned in January $1200.

Jan,31 Paid for utilities used in January $200

Feb,1 Paid daily tribune $360 cash for newspaper advertising to be run during February.

Feb,2 Purchased radio advertising from KRAM to be aired in February. The cost was $470 payable within
30 days.

Feb,4 Purchased various shop supplies from CAPA auto parts the cost was $1400 due in 30 days.

Feb,15 Collected $49810 cash for repairs made to vehicles of airport shuttle Service.

Feb,28 Billed Harbor Cab co $5400 for maintenance and repair service overnight provided in February.the
agreement with Harbor Cab calls for payment to be received by March 10.
 OVERNIGHT AUTO SEVICE
GENERAL JOURNAL JAN&Feb 2015
Date Account Title Debit Credit
2015      
jan,31 Cash $2,200  
  Repair Service Revenue   $2,200
31 Wages Expense $1,200  
  Cash   $1,200
31 Utilities Expence $200  
  Cash   $200
Feb,1 Advertising Expense $360  
  Cash   $360
2 Advertising Expense $470  
  Accounts Payable   $470
4 Shop Supplies $1,400  
  Accouns payable   $1,400
15 Cash $4,980  
  Repair Service Revenue   $4,980
28 Accounts Receivable $5,400  
  Repair Service Revenue   $5,400
28 Wages Expense $4,900  
  Cash   $4,900
28 Utilities Expence $1,600  
  Accounts Payable   $1,600
28 Dividends $3,200  
  Cash   $3,200
 OVERNIGHT AUTO SERVICE
THE LEDGER
Assets Accounts:

Cash Accounts Receivable

31-Jan 2200 1-Feb 360 31-Jan 1200 Shop supplies  
15-Feb 4980 28-Feb 4900 28-Feb 5400 31-Jan 0
  28-Feb 3200   4-Feb 1400
Balance Balance $6600  
$13120
Balance $1400

Building Land
Tools and 31-Jan 52000   
Equipment   31-Jan 3600 
   
31-Jan 120000  
   
Balance $5200
  Balance $3600
Balance $1200
Liabilities and owner’s Equity accounts:

Notes Payable   Accounts payable   Capital stock  

  31-Jan 30000   31-Jan 7000   31-Jan 80000
    2-Feb 470  
    4-Feb 1400  
    28-Feb 1600  
  Balance $30000     Balance $80000
  Balance $10470

Dividends   Repair Service Revenue   Advertising Expense  

31-Jan 0   31-Jan 2200 1-Feb 360
28-Feb 3200   15-Feb 4980
    28-Feb 5400 2-Feb 470
     
Balance $3200   Balance $12580
Balance $830
 Wages Expense   Utilities Expense  
31-Jan 1200
31-Jan 200
28-Feb 4900
  28-Feb 1600
Balance $6100  
Balance $1800
ANY QUESTION Please raise your hand.
THANK YOU !
THE EN
D