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Stuff to Help Connect Study Material D2L Practice Quizzes Read your textbook Solutions to selected homework questions in D2L 1.

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Presentation on theme: "Stuff to Help Connect Study Material D2L Practice Quizzes Read your textbook Solutions to selected homework questions in D2L 1."— Presentation transcript:

1 Stuff to Help Connect Study Material D2L Practice Quizzes Read your textbook Solutions to selected homework questions in D2L 1

2 Analyzing and Recording Transactions More of C H A P T E R 2 2

3 Learning Objectives 1. Explain the accounting cycle. (LO 1 ) 2. Describe an account, its use, and its relationship to the ledger. (LO 2 ) 3. Define debits and credits and explain their role in double-entry accounting. (LO 3 ) 4. Describe a chart of accounts and its relationship to the ledger. (LO 4 ) 3-3

4 5. Analyze the impact of transactions on accounts. ( LO 5 ) 6. Record transactions in a journal and post entries to a ledger. ( LO 6 ) 7. Prepare and explain the use of a trial balance. ( LO 7 ) Learning Objectives 3-4

5 The normal balance of an account refers to the debit or credit side where increases are recorded. A) True B) False 5

6 Example #1: The owner, V. Klimb, invests $10,000 in the business. Accounts affected Increase/ Decrease Debit/ Credit CashIncreaseDebit V.Klimb, capital IncreaseCredit Analyzing Transactions LO 5

7 Example #1: The owner invests $10,000 in the business.  Debit Cash for $10,000  Credit V.Klimb, Capital for $10,000 Analyzing Transactions 3-7 LO 5

8 Entries are originally recorded in the General Journal. This process is called “journalizing”. The General Journal 3-8 LO 6

9 Elements of a Journal Entry 9 1.Date of transaction/event 2.Name of accounts affected 3.Amount of each change 4.A brief description Note “debits” are listed first

10 Example #2: The company purchases supplies by paying $2,500 cash. Accounts affected Increase/ Decrease Debit/ Credit Analyzing Transactions LO 5

11 Example #2: The company purchases supplies by paying $2,500 cash. Accounts affected Increase/ Decrease Debit/ Credit SuppliesIncreaseDebit CashDecreaseCredit Analyzing Transactions LO 5

12 Analyzing Transactions Example #2: The company purchases supplies by paying $2,500 cash LO 5

13 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. 13

14 Focussed Workout QS 2-9 Ex 2-6 (pt 1) 14

15 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. The Ledger 3-15 LO 2 Typically numbered

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19 Ledger Account 19 GENERAL LEDGER ACCOUNT NAME ACCOUNT NO. 101 DATEEXPLANATIONPRDEBITCREDITBALANCE The “T” has not really gone away

20 General Journal information is transferred to the General Ledger. Account balances are updated. This process is called “posting”. Posting Journal Entries 3-20 LO 6

21 General journal information is transferred (posted) to the general ledger Steps: 1.Identify the accounts. 2.Enter date 3.Enter amount 4.Calculate new account balance 5.Enter posting references (where to/from) Steps: 1.Identify the accounts. 2.Enter date 3.Enter amount 4.Calculate new account balance 5.Enter posting references (where to/from) Posting LO 6 21

22 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. 22

23 Test Run 23 QS 2-10, 2-11 Ex 2-6 (pt 2)

24 The Accounting Cycle LO Prepare post-closing trial balance Journalize Close Prepare unadjusted trial balance Post Analyze transactions Prepare adjusted trial balance Prepare statements Adjust Ch 1-2 Ch 2 Ch 3 Ch 4 Ch 1-4 Ch 3

25 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. Trial Balance 3-25 LO 7

26 Just One Account from the General Ledger (GL) 26

27 27 Ledger for Vertically Inclined - March 31, 2014

28 28

29 Practice! EX 2-12,13 QS

30 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 30 See page 84

31 Income Statement 31 2,400

32 Statement of Changes in Equity 32 2,400 11,800

33 Balance Sheet 33 11,800

34 Comprehensive Practice Problem 2-6A 34 Solution available on D2L

35 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.

36 What is journalizing? What is posting? What is the purpose of a trial balance? What goes on each statement? Review 3-36

37 Chapter 2 – Major Hurdle How are you doing? 3-37


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