Presentation on theme: "Unit 6 Journalizing. The Accounting Cycle Analyze Transactions and Source Documents Journalize Entries in the General Journal Post the General Journal."— Presentation transcript:
The Accounting Cycle Analyze Transactions and Source Documents Journalize Entries in the General Journal Post the General Journal to the General Ledger Prepare Adjusting Entries, Vouchers, and the Trial Balance Prepare Closing Entries Post Closing Entries to the Trial Balance Prepare Financial Statements Analyze and Review the Financial Statements
The general journal is: Step 2: Journalizing Entries into the General Journal Each journal entry includes: A day-to-day record of business transactions Sometimes referred to as the book of original entry The date of the transaction The account(s) affected by the transaction A brief description of the transaction The debit or credit amount
The general ledger: Step 3: Posting the General Journal to the General Ledger Is a complete record of all financial transactions Includes multiple subsidiary ledgers Sometimes referred to as the book of final entry Is the source of data for company financial statements
The trial balance: Step 4: Preparing Adjusting Entries, Vouchers, and the Trial Balance Adjusting and correcting journal entries: Lists all the debit and credit balances for an accounting period Includes every general ledger account Helps you to find errors in the general ledger Are recorded at the end of an accounting period to adjust general ledger accounts Are used to correct errors and/or match revenues and expenses
Have practically eliminated the use of physical book ledgers Popular accounting software packages include: Computerized Accounting Systems QuickBooks Peachtree/Sage Quicken ERPs Excel
Five Basic Steps: Journalizing in the General Journal For Day-to-Day Business Transactions 1.Record the date. 2.Record the relevant chart of accounts number. 3.Record the description of the chart of accounts number. 4.Record the debit or credit. 5.Record the description of the business transaction that took place.
Journalizing in the General Journal For Day-to-Day Business Transactions
Posting to the General Ledger A Complete Record of Financial Transactions Summarized General Ledger Balances
A Complete Record of Financial Transactions Posting to the General Ledger Subsidiary Ledgers
When you find an error in the general ledger: Correcting Entries 1.Use a journal voucher template. 2.Select a journal entry number. 3.Input information into the voucher. 4.Include supporting documents.
When analyzing and reviewing the trial balance, make sure that you: Preparing the Trial Balance Check the balance. Look for duplicate entries. Investigate transposed numbers. Review source documents.