Chapter 3 - Journals, Source Documents, and Recording Entries in a Journal Hand out Notes Sheet!!! LESSON 3-1

LESSON 3-1 4/15/2017 LESSON 3-1 Journals, Source Documents, and Recording Entries in a Journal Journal – form for recording transactions in chronological order Journalizing – Recording transactions in a journal GREEN

A GENERAL JOURNAL page 57 Entry – information for each transaction recorded in a journal General Journal – a journal with two amount columns in which all kinds of entries can be recorded LESSON 3-1

General Journal Continued… Double-Entry Accounting – the recording of debit and credit parts of a transaction Source Document – a business paper from which information is obtained for a journal entry. checks, sales invoices, receipts, calculator tape and memorandums CONCEPT: Objective Evidence – a source document is prepared for each transaction, this proves the transaction occurred. LESSON 3-1

CHECKS page 58 Check – a business form ordering a bank to pay cash from a bank account, all checks are prenumbered (C#) LESSON 3-1

SALES INVOICES page 58 Sales Invoice – an invoice used as a source document for recording a sale on account, sales invoices are prenumbered (S#) LESSON 3-1

OTHER SOURCE DOCUMENTS LESSON 3-1 4/15/2017 OTHER SOURCE DOCUMENTS page 59 receipt calculator tape A business form giving written acknowledgement for cash received (R#) The total cash sales for the day (T date) memorandum A form on which a brief message is written describing a transaction (M#) LESSON 3-1 GREEN

RECEIVED CASH FROM OWNER AS AN INVESTMENT page 60 August 1. Received cash from owner as an investment, $5,000.00. Receipt No. 1. 2 1 3 4 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited, indented. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-1

PAID CASH FOR SUPPLIES page 61 August 3. Paid cash for supplies, $275.00. Check No. 1. 2 1 3 4 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited, indented. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-1

TERMS REVIEW journal journalizing entry general journal page 62 journal journalizing entry general journal double-entry accounting source document check invoice sales invoice receipt memorandum LESSON 3-1

LESSON 3-2 4/15/2017 LESSON 3-2 Journalizing Buying Insurance, Buying on Account, and Paying on Account GREEN

PAID CASH FOR INSURANCE page 63 August 4. Paid cash for insurance, $1,200.00. Check No. 2. 1 2 3 4 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-2

BOUGHT SUPPLIES ON ACCOUNT page 64 August 7. Bought supplies on account from Supply Depot, $500.00. Memorandum No. 1. 2 1 4 3 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-2

PAID CASH ON ACCOUNT page 65 August 11. Paid cash on account to Supply Depot, $300.00. Check No. 3. 2 1 4 3 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-2

LESSON 3-3 4/15/2017 LESSON 3-3 Journalizing Transactions That Affect Owner’s Equity and Receiving Cash on Account Green

RECEIVED CASH FROM SALES page 68 August 12. Received cash from sales, $295.00. Tape No. 12. 2 1 4 3 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-3

SOLD SERVICES ON ACCOUNT page 69 August 12. Sold services on account to Oakdale School, $350.00. Sales Invoice No. 1. 2 1 4 3 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-3

PAID CASH FOR AN EXPENSE page 70 August 12. Paid cash for rent, $300.00. Check No. 4. 2 1 4 3 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-3

RECEIVED CASH ON ACCOUNT page 71 August 18. Received cash on account from Oakdale School, $200.00. Receipt No. 2. 2 1 4 3 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-3

PAID CASH TO OWNER FOR PERSONAL USE page 72 August 18. Paid cash to owner for personal use, $125.00. Check No. 6. 2 1 4 3 1. Write the date in the Date column. 2. Write the title of the account debited. Write the debit amount. 3. Write the title of the account credited. Write the credit amount. 4. Write the source document number in the Doc. No. column. LESSON 3-3

LESSONG 3-4 Starting a New Journal Page 4/15/2017 LESSON 3-4 Starting a New Journal Page GREEN

A COMPLETED JOURNAL PAGE LESSONG 3-4 4/15/2017 A COMPLETED JOURNAL PAGE page 74 Journal entries should not be split between two pages. Reason being, we need to be able to easily verify the debits = the credits LESSON 3-4 GREEN

STARTING A NEW GENERAL JOURNAL PAGE LESSONG 3-4 4/15/2017 STARTING A NEW GENERAL JOURNAL PAGE page 75 2 Remember a General Journal is the simplest Journal Accts Use After one page is completed in the General Journal all you need to do is start a new page by writing the page number in the appropriate spot. LESSON 3-4 GREEN

STANDARD ACCOUNTING PRACTICES LESSONG 3-4 4/15/2017 STANDARD ACCOUNTING PRACTICES page 76 4 2 6 3 1 You need to follow the Acct. Standards to ensure accurate and legible records. Items 1 – 3 describe procedures for correction errors. In the Accounting world… All entries are written in INK!!! Therefore precise procedures must be followed to provide legible corrections without suggesting that there has been any attempt to falsify the journal. Read page 76 as a class 5 LESSON 3-4 GREEN

Questions When is a general journal page complete? If an entire entry is incorrect and is discovered before the next entry is journalized, how should the incorrect entry be corrected? If several correct entries are recorded after an incorrect entry is made, how should the incorrect entry be corrected? LESSON 3-4