1. ACCT72 - Intro Accounting
April 13, 2017
Stuff to Help
Connect Study Material
D2L Practice Quizzes
Read your textbook
Solutions to selected homework questions in D2L

2. ACCT72 - Intro Accounting
April 13, 2017
Analyzing and Recording Transactions
More of
C H A P T E R 2

3. ACCT72 - Intro Accounting
April 13, 2017
Learning Objectives
Explain the accounting cycle. (LO1)
Describe an account, its use, and its relationship to the ledger. (LO2)
Define debits and credits and explain their role in double-entry accounting. (LO3)
Describe a chart of accounts and its relationship to the ledger. (LO4)

4. ACCT72 - Intro Accounting
April 13, 2017
Learning Objectives
Analyze the impact of transactions on accounts. (LO5)
Record transactions in a journal and post entries to a ledger. (LO6)
Prepare and explain the use of a trial balance. (LO7)

5. ACCT72 - Intro Accounting
April 13, 2017
The normal balance of an account refers to the debit or credit side where increases are recorded.
Ans: True
Difficulty: Moderate
LO: 3
A) True B) False

6. Analyzing Transactions
ACCT72 - Intro Accounting
April 13, 2017
Analyzing Transactions
Example #1:
The owner, V. Klimb, invests $10,000 in the business.
Accounts affected
Increase/ Decrease
Debit/
Credit
Cash
Increase
Debit
V.Klimb, capital 1 2 3
Review from last session…
LO 5

7. Analyzing Transactions
ACCT72 - Intro Accounting
April 13, 2017
Analyzing Transactions
Example #1:
The owner invests $10,000 in the business.
Debit Cash for $10,000
Credit V.Klimb, Capital for $10,000
We see the result in T-account format
LO 5

8. ACCT72 - Intro Accounting
April 13, 2017
The General Journal
Entries are originally recorded in the General Journal. This process is called “journalizing”.
While we have been recording using T-accounts we normally use a Journal.
This (see slide) is the MOST GENERAL FORM of a Journal
Book of Original Entry. Where we FIRST record the financial impact of an event.
Think of it as a DIARY where we record each thing as it happens (following a prescribed format)
LO 6

9. Elements of a Journal Entry
ACCT72 - Intro Accounting
April 13, 2017
Elements of a Journal Entry 3 2 1 4
For now, just point out there are a couple of other things on the journal page including the page number and a thing called “PR”
Both will be explained further a little later in the presentation…
Date of transaction/event
Name of accounts affected
Amount of each change
A brief description
Note “debits” are listed first

10. Analyzing Transactions
ACCT72 - Intro Accounting
April 13, 2017
Analyzing Transactions
Example #2:
The company purchases supplies by paying $2,500 cash.
Accounts affected
Increase/ Decrease
Debit/
Credit 1 2 3
Taking a look at another example and compare formats:
increase/decrease
T-account
Journal Entry
LO 5

11. Analyzing Transactions
ACCT72 - Intro Accounting
April 13, 2017
Analyzing Transactions
Example #2:
The company purchases supplies by paying $2,500 cash.
Accounts affected
Increase/ Decrease
Debit/
Credit
Supplies
Increase
Debit
Cash
Decrease 1 2 3
increase/decrease
LO 5

12. Analyzing Transactions
ACCT72 - Intro Accounting
April 13, 2017
Analyzing Transactions
Example #2:
The company purchases supplies by paying $2,500 cash.
T-account
Journal Entry
Note the 4 elements (date, accounts, amounts and description) are all repeated
LO 5

13. The General Journal provides a place for recording:
ACCT72 - Intro Accounting
April 13, 2017
The General Journal provides a place for recording:
A) The transaction date. B) The names of the accounts involved. C) The amount of each debit and credit. D) An explanation of the transaction. E) All of these answers are correct.
Ans: E
Difficulty: Moderate
LO: 5

14. ACCT72 - Intro Accounting
April 13, 2017
Focussed Workout
QS 2-9 Ex 2-6 (pt 1)
For practice translating economic events into journal entries.
Do the trick over and over 

15. ACCT72 - Intro Accounting
April 13, 2017
The Ledger
A record (or list) containing all accounts used by a business.
May be computerized or maintained manually.
Each company has its own unique set of accounts.
Typically numbered
LO 2

16. ACCT72 - Intro Accounting
April 13, 2017

17. ACCT72 - Intro Accounting
April 13, 2017

18. ACCT72 - Intro Accounting
April 13, 2017

19. ACCT72 - Intro Accounting
April 13, 2017
Ledger Account
GENERAL LEDGER
ACCOUNT NAME
ACCOUNT NO
DATE
EXPLANATION PR
DEBIT
CREDIT
BALANCE
The Ledger is like a big file folder where each account gets its own page.
Each account is where we record the effect of transactions that we recorded in the journal (kind of like re-sorting)
The “T” has not really gone away

20. ACCT72 - Intro Accounting
April 13, 2017
Posting Journal Entries
General Journal information is transferred to the General Ledger.
Account balances are updated.
This process is called “posting”.
LO 6

21. ACCT72 - Intro Accounting
April 13, 2017
Posting 5
General journal information is transferred (posted) to the general ledger 3 2 1 5
Perform the steps and repeat for next line of Journal Entry.
Student note have blank GL 4
Steps:
Identify the accounts.
Enter date
Enter amount
Calculate new account balance
Enter posting references (where to/from)
LO 6

22. The process of copying journal information to the ledger is called:
ACCT72 - Intro Accounting
April 13, 2017
The process of copying journal information to the ledger is called:
A) Double-entering. B) Posting. C) An internal business transaction. D) Journalizing. E) An external business transaction.
Ans: B
Difficulty: Easy
LO: 6

23. ACCT72 - Intro Accounting
April 13, 2017
Test Run
QS 2-10, 2-11 Ex 2-6 (pt 2)

24. ACCT72 - Intro Accounting
April 13, 2017
The Accounting Cycle
Prepare
post-closing
trial balance
Analyze
transactions 1
Ch 4 9
Ch 1-2
Journalize 2
Ch 2
Close 8
Ch 4
Post 3
Ch 2
Prepare
statements 7
Ch 1-4
Prepare
unadjusted
trial balance 4
Ch 2
Prepare
adjusted
trial balance 6
Adjust 5
Ch 3
Ch 3
LO 1

25. ACCT72 - Intro Accounting
April 13, 2017
Trial Balance
A list of accounts and their balances at a point in time.
Used to determine if total debits equals total credits.
May also be used to prepare financial statements.
Next step it to prepare the Trial Balance, but what IS that?
NOT to be confused with the BALANCE SHEET
LO 7

26. Just One Account from the General Ledger (GL)
ACCT72 - Intro Accounting
April 13, 2017
Just One Account from the General Ledger (GL)

27. ACCT72 - Intro Accounting
April 13, 2017
Ledger for Vertically Inclined - March 31, 2014
Quite a Hodge-Podge
Not very readable.
Note the Revenue and Expense accounts are listed under ‘Equity’
Equity is not JUST Owner’s Capital

28. ACCT72 - Intro Accounting
April 13, 2017
Nicely organized
Lends itself well to verification
Accounts grouped in ALCREW

29. ACCT72 - Intro Accounting
April 13, 2017
Practice!
EX 2-12,13 QS 2-12

30. What if it Doesn’t Balance?
ACCT72 - Intro Accounting
April 13, 2017
What if it Doesn’t Balance?
Add debit column and credit column, again
Check for the difference
Divisible by 9?
Amounts copied correctly
Amounts in the right columns
Recheck posting
Recheck original journal entries
More and more work as we go down the list.
See page 84

31. ACCT72 - Intro Accounting
April 13, 2017
Income Statement
2,400

32. Statement of Changes in Equity
ACCT72 - Intro Accounting
April 13, 2017
Statement of Changes in Equity
2,400
11,800

33. ACCT72 - Intro Accounting
April 13, 2017
Balance Sheet
11,800

34. Comprehensive Practice
ACCT72 - Intro Accounting
April 13, 2017
Comprehensive Practice
Problem 2-6A
Solution available on D2L

35. Which of the following statements is true?
ACCT72 - Intro Accounting
April 13, 2017
Which of the following statements is true?
A) The trial balance is an internal report used to prepare financial statements. B) The trial balance is a list of all the accounts in the journal. C) Another name for the trial balance is the "chart of accounts." D) The trial balance is a list of the accounts in the general ledger. E) A trial balance is only prepared at year end.
Ans: A
Difficulty: Moderate
LO: 7
Some may argue that D is also true and while a fine point, a list of all the accounts in the GL is actually the Chart of Accounts. A TB must be a complete list of accounts AND their balances. (BTW – the test bank has an error on this question)

36. ACCT72 - Intro Accounting
April 13, 2017
Review
What is journalizing?
What is posting?
What is the purpose of a trial balance?
What goes on each statement?

37. Chapter 2 – Major Hurdle How are you doing?
ACCT72 - Intro Accounting
April 13, 2017
Chapter 2 – Major Hurdle How are you doing?
How are you facing the hurdles of Chapter 2?
Style and elegance, scrambling, hurdle jumping over you, attempting to stare it down or a chalk outline?