Accounting Ch. 4 Name ___________________

Ch. 4 - Recording Transactions in a General Journal

4 - 1 Journals, Source Documents, and Recording Entries in a Journal

I. ____________ _____________

A. Using a Journal

1. _______________- Information for _____ transaction

recorded in a journal.

2. ____________ ______________ - A journal with _____ amount columns in which all kinds of entries can be recorded. (journal type used by our Co.)

3. ______________ in Encore Music's ___________

a. Date

b. Account ____________

c. Document ___________

d. Post. Ref.

e. Debit

f. Credit

B. __________________- Very Important!

C. ____________________Record

1. Transactions recorded in _____ __________

2. ________ info. about each transaction is recorded in _____

place, making info. easier to locate.

D. ______________-Entry Accounting

1. Def. - The recording of ______ & ______ parts of a

transaction.

2. Each _____________ affects at least ______ accounts.

3. The DR & CR are _______recorded for each transaction.

4. They reflect the _________ effect on the records of the

businesses.

5. Double-entry accounting assures that debits _____ credits.

E. ______________ Documents

1. Def. - A business ________from which info. is obtained

for a journal entry.

2. Source documents _________ the transaction occurred.

3. Example: ____________ ___________

a. Check - business form ordering a bank to pay

____________ from a bank account

b. All _______ payments made by our business are

made by___________.

c. Checks are _____-numbered to help you to keep

track of all checks

d. Check ________are prepared at the ________ time as

the check.

4. Concept Used: ___________ ____________

5. Transactions should only be journalized ___ they

actually ___________.

6. Amounts must be _________ & true.

7. Source Documents ______ by Encore Music:

a. Checks

b. Sales Invoices

c. Receipts

d. Calculator Tapes

e. Memorandums

II. __________ Invoices

A. Services Being Sold On Account

1. ______________ - form describing the goods and services

sold, the quantity, and the price.

2. Sales ________________- An invoice used as a source

document for recording a sale ____ account.

a. Also known: Sales Ticket or Sales Slip

b. Prepared in ______________, you keep a copy & a

copy is given to the customer.

c. Sales Invoices are numbered in ____________

d. Concept: ____________ Evidence.

III. Other Source Documents

A. ________________

1. Def. - Business form giving __________ acknowledgment

for cash received.

2. Used when cash is ___________ from sources other than

sales.

3. Receipts are _____-numbered to help us keep better

track of them.

4. Concept: Objective ____________________

B. ______________________

1. Def. - A form on which a _________ message is written

describing a transaction.

2. Used when ____ ________ source doc. is prepared or when

an additional explanation is needed.

3. They are also _______-numbered.

4. A brief note may be written on the memorandum if a

___________explanation is necessary for your records.

5. Concept: _______________ Evidence

C. ________________Tapes

1. Encore Music collects cash at the time of services

_____________ to customers.

2. An electronic calculator totals the ___________ amount

received for sales.

3. Contains the _______daily sales on one source document

(__________time & space).

4. Concept: Objective _____________

IV. Received _____________ From Owner As Investment

A. Four Parts of an Entry

1. _____________

2. _____________

3. _____________

4. ________________ Document

B. _____________ a transaction is recorded in a journal, the

transaction is analyzed into DR & CR parts.

August 1. Received cash from owner as an investment, $10,000.

Receipt No.

(Analyze Transaction)

Cash BT, Capital

10,000.00 10,000.00

C. Journalizing cash ____________ from owner as an investment:

1. ______________:

a. Write the date (August 1, 1999) in the _____ Column.

b. This should be your ________ entry on the page,

c. The year and month are ________ written for this

entry.

d. Neither the year nor the month are written _________

on the same page.

2. ___________:

a. Write the title of the account debited, _______, in

the Account Title Column.

b. Write the Debit _________ $10,000.00, in the Debit

column.

3. ___________:

a. On the __________line, indented about 1centimeter,

write the title of the account____________, Barbara

Trevino, Capital, in the Account _______ Column.

b. This account title is ___________ to indicate that this

account is credited.

c. Write the _________amount, $10,000.00 in the Credit

Column.

4. ______________Document:

a. On the _________ line of the entry, write the source

document number, ____, in the Doc. No. Column.

b. The source document number, R1 indicates this

is __________ No. 1

c. The source document number is a _________

reference from the _________ to the source document.

d. If more details are needed about this transaction,

a person can ________ to Receipt No. 1

-Remember: Debits _________ equal credits for each entry in a General Journal. After the entry is journalized, the equality of debits and credits is verified. For this entry, the total debits, $10,000.00, equal the total credits $10,000.00.

V. Paid _________ for Supplies

August 3, Paid Cash for Supplies, $1,577.00 using Check No. 1.

(Analyze Transaction)

Supplies Cash

1,577.00 1,577.00

A. Journalizing Cash ________for Supplies:

1. Date:

a. Write the date (August 3, 1999) in the ________

column.

b. This is not the ______ entry on the journal page,

therefore, the year and month are not written for this entry.

2. ________:

a. Write the title of the account debited, _______,

in the Account Title Column.

b. Write the _______ amount, $1,577.00 in the Debit

Column.

3. ________:

a. On the next line, indented about 1 centimeter,

write the ______ of the account credited, Cash, in

the Account Title Column.

b. Write the ________ amount, $1,577.00 in the Credit

Column.

4. _______ __________:

a. On the first line of this entry, write the source

_________ number, C1, in the Doc. No. Column.

b. The source document number, C1, indicates that

this is Check No. 1.

Debit must equal Credit. Did they in this transaction?

For this entry the total debits, $1,577.00,

did equal the total credits, $1,577.00.

Remember: If you misspell words in your written communications, people may mistrust the quality of your accounting skills. Note that in the word receipt the "e " comes before the "i" and there is a silent "p" before the "t" at the end of the word.

4 - 2 Journalizing ________ Insurance, Buying on Account, and ________on Account

I. _______ ________ for Insurance

August 4, Paid Cash for insurance, $1,200.00. Check No. 2.

(Analyze Transaction)

Pre-Pd. Ins. Cash

1,200.00 1,200.00

A. Journalizing ______ paid for Insurance:

1. Date. Write the date, 4 , in the _____ Column.

2. _______.

a. Write the title of the _______ debited, Pre-Paid

Insurance in the Account Title Column.

b. Write the debit amount $1,200.00, in the _______

Column.

3. _______.

a. On the next line, indented about 1 centimeter,

write the title of the account credited, Cash, in

the Account Title Column.

b. Write the credit amount, $1,200.00 in the Credit

Column.

4. ______ __ ______.

a. On the first line of this entry, write the _______ document number, C2, in the Doc. No. Column.

Remember: All amounts recorded in the general journal must have an account title written in the Account Title Column.

II. ______ ________ on Account

August 7, Bought supplies on account from Ling Music Supplies,

$2,720.00. Memorandum No. 1.

Supplies A/P - Ling Music Supplies

2,720.00 2,720.00

A. ___________ Supplies ________ on Account

1. Date. Write the date, 7, in the Date Column.

2. Debit.

a. Write the title of the account debited, Supplies, in the _______ Title Column.

b. Write the ______ amount, $2,720.00, in the Debit Column.

3. Credit.

a. On the next line, indented about 1 centimeter, write the _____ of the account credited, Accounts payable - Ling Music Supplies, in the Account ______ Column.

b. Write the credit amount, $2,720.00, in the Credit

Column.

4. Source Document.

a. On the first line of this entry, write the source

document ________, M1, in the Doc. No. Column.

Remember: When _________ transactions in a general journal, the account title that is credited is normally________.

III. Paid Cash on ________

August 11, Paid Cash on Account to Ling Music Supplies,

$1,360.00. Check No. 3.

(Analyze Transaction)

A/P - Ling

Music Supplies Cash

1,360.00 1,360.00

4-3 Journalizing Transactions That ______ Owner's Equity and ________ Cash on Account

I. _______ Cash from Sales

August 12, Received Cash from Sales, $325.00. Tape No. 12.

Cash Sales

325.00 325.00

II. ______ Services on Account

August 12, Sold Services on Account to Kids Time, $200.00. Sales

Invoice No. 1.

A/R - Kids Time Sales

200.00 200.00

III. Paid Cash for _______

August 12, Paid Cash for Rent, $250.00, Check No. 4.

Rent Expense Cash

250.00 250.00

IV. Received ______ on Account

August 12, Received Cash on Account from Kids Time, $100.00, Receipt No. 2.

Cash A/R - Kids Time

100.00 100.00

V. Paid Cash to ______ for Personal Use

August 12, paid Cash to owner for personal use, $100.00. Check

No 6.

BT - Drawing Cash

100.00 100.00

Steps to ____________ Transactions

1. ______: Write ______ date in Date Column.

2. Debit: Write the title of the account debited, in the Account

_____ ________ & the dollar amount in the Debit Column.

3. ______: Indented slightly, Write the title of the account

credited, in the ______ ________ Column & the ______ amount in

the Credit Column.

4. Source Document: On the ______ line of this entry, write the

______ document number, in the Doc. No. Column.

4 - 4 ________ a New Journal Page

I. ________________________?

A. When there is __________ space to record any more entries.

B. One blank line remaining is not ______, each entry requires at least two lines.

C. If a journal entry is _____ between ____ pages, the equality

of debits and credits is not as easily verified & may

appear incorrect.

D. _______ split entries between pages.

II. Starting a New _______ Journal

A. After one page is _____, a new journal page is ________.

B. Start a new page by ______ the page number in the space

__________ in the journal heading.

III. ________ Accounting __________

A. Correcting ________

1. Do it in a way that does not cause doubts about the

__________ of the information.

2. If an ______ is recorded:

a. Cancel the error by _______ drawing a line through

the incorrect item.

b. Write the correct item ____________ above the

canceled item.

B. ________ incorrect entries ________making your next______.

1. Draw neat lines through all parts of the incorrect

entry. (DO NOT __________ IT OUT)

2. Journalize the entry ________ on the next blank line.

C. When there are several correct entries after an _______

entry and the _____ _______ lines are several entries later:

1. Draw _____ lines through all ________ parts of the entry.

2. Record the ________ items on the same line as the

incorrect ______, directly above the ________ parts.

D. In accounting ______ write words in ____ when space

________ you to do so.

1. _________ only when space is _______.

2. All items ______ be written legibly.

E. When using ______ ___________ ________

1. _____ & ____ _____ & ______ ________ are not used.

2. Sometimes a ______ tint or a heavy _______ rule is used

on printed accounting paper to separate ________ &______ columns.

F. Always write ___ _______ in the cents column even if the

amount is in even ______. Blanks may cause doubts of

_________ later.

G. Neatness is ______ important, use a ruler to _____ lines.