1. GAAP – Generally Accepted Accounting Principles (10) FASB – Financial Accounting Standards Board n GAAP: –Objective Evidence: a source document (piece of paper that can be saved) is prepared for each transaction – proves that the transaction did occur 1.Checks 2.Sales Invoices 3.Receipts 4.Calculator tapes – cash register 5.Memorandums Lesson 4-1, page 66

2. CHECKS Lesson 4-1, page 67 - a business form ordering a bank to pay cash from a bank account - the source document for ALL cash payments

3. SALES INVOICES (or sales ticket or sales slip) Lesson 4-1, page 67 -a form describing the goods or services sold, the quantity, and the price -prepared in duplicate: original goes to customer, copy is kept as the source document (Objective Evidence) - numbered in sequence

4. OTHER SOURCE DOCUMENTS Lesson 4-1, page 68

5. A GENERAL JOURNAL – PERMANENT, LEGAL Lesson 4-1, page 66 -a form for recording transactions in chronological order General – all kinds of transactions could be journalized here Why? All information about each transaction is recorded in one place …Every Day Double Entry Accounting – Debit & Credit recorded – 2 parts – showing the dual effect of each transaction

6. RECEIVED CASH FROM OWNER AS AN INVESTMENT Lesson 4-1, page 69 August 1. Received cash from owner as an investment, $10,000.00. Receipt No. 1.

7. RECEIVED CASH FROM OWNER AS AN INVESTMENT Lesson 4-1, page 69 August 1. Received cash from owner as an investment, $10,000.00. Receipt No. 1. 1.Which accounts are affected? Cash Barbara Treviño, Capital 4.How is each amount entered in the accounts? Assets increase on the debit side. Owner’s equity accounts increase on the credit side. 3.How is each classification changed? Assets are increased. Owner’s equity is increased. 2.How is each account classified? Cash is an asset account. Barbara Treviño, Capital is an owner’s equity account. Barbara Treviño, Capital Cash Debit Normal Balance Credit Normal Balance  10,000.00 

8. RECEIVED CASH FROM OWNER AS AN INVESTMENT Lesson 4-1, page 69 August 1. Received cash from owner as an investment, $10,000.00. Receipt No. 1. (Debit Cash, Credit Capital) 1. Write the date. 1 3.Credit Barbara Treviño, Capital. 3 2.Debit Cash. 2 4.Write the source document number. 4 Enter zeros 4 parts to each entry

9. PAID CASH FOR SUPPLIES (Pay cash with checks) Lesson 4-1, page 70 1. Write the date. 1 3.Credit Cash. 3 2.Debit Supplies. 2 4.Write the source document number. 4

10. BOUGHT SUPPLIES ON ACCOUNT Lesson 4-2, page 73 August 7. Bought supplies on account from Ling Music Supplies, $2,720.00. Memorandum No.1. 1.Which accounts are affected? Supplies Accounts Payable—Ling Music Supplies 4.How is each amount entered in the accounts? Assets increase on the debit side. Liabilities increase on the credit side. 3.How is each classification changed? Assets are increased. Liabilities are increased. 2.How is each account classified? Supplies is an asset account. Accounts Payable—Ling Music Supplies is a liability account. Accounts Pay.—Ling Music Supplies Supplies Debit Normal Balance  2,720.00  Credit Normal Balance

11. BOUGHT SUPPLIES ON ACCOUNT Lesson 4-2, page 73 August 7. Bought supplies on account from Ling Music Supplies, $2,720.00. Memorandum No.1. 1 1.Write the date. 2 2.Debit Supplies. 3 3.Credit Accounts Payable—Ling Music Supplies. 4 4.Write the source document number.

12. PAID CASH ON ACCOUNT Lesson 4-2, page 74 August 11. Paid cash on account to Ling Music Supplies, $1,360.00, Check No. 3. 1.Which accounts are affected? Accounts Payable—Ling Music Supplies Cash 4.How is each amount entered in the accounts? Liabilities decrease on the debit side. Assets decrease on the credit side. 3.How is each classification changed? Liabilities are decreased. Assets are decreased. 2.How is each account classified? Accts. Pay.—Ling Music Supplies is a liability account. Cash is an asset account. Cash Accts. Pay.—Ling Music Supplies Credit Normal Balance  1,360.00  Debit Normal Balance

13. PAID CASH ON ACCOUNT Lesson 4-2, page 74 August 11. Paid cash on account to Ling Music Supplies, $1,360.00, Check No. 3. 1 1.Write the date. 3 3.Credit Cash. 4 4.Write the source document number. 2.Debit Accounts Payable—Ling Music Supplies. 2

14. RECEIVED CASH FROM SALES Lesson 4-3, page 76 August 12. Received cash from sales, $325.00. Tape No. 12. 1.Which accounts are affected? Cash Sales 4.How is each amount entered in the accounts? Assets increase on the debit side. Revenues increase on the credit side. 3.How is each classification changed? Assets are increased. Revenues are increased. 2.How is each account classified? Cash is as asset account. Sales is as revenue account. Sales Cash Debit Normal Balance  325.00  Credit Normal Balance

15. RECEIVED CASH FROM SALES Lesson 4-3, page 76 August 12. Received cash from sales, $325.00. Tape No. 12. 1 1.Write the date. 2 2.Debit Cash. 4 4.Write the source document number. 3.Credit Sales. 3

16. SOLD SERVICES ON ACCOUNT Lesson 4-3, page 77 August 12. Sold services on account to Kids Time, $200.00. Sales Invoice No. 1. 1.Which accounts are affected? Accounts Receivable—Kids Time Sales 4.How is each amount entered in the accounts? Assets increase on the debit side. Revenues increase on the credit side. 3.How is each classification changed? Assets are increased. Revenues are increased. 2.How is each account classified? Accounts Receivable—Kids Time is an asset account. Sales is as revenue account. Sales Accounts Rec.—Kids Time Debit Normal Balance  200.00  Credit Normal Balance

17. SOLD SERVICES ON ACCOUNT Lesson 4-3, page 77 August 12. Sold services on account to Kids Time, $200.00. Sales Invoice No. 1. 1 1.Write the date. 3 3.Credit Sales. 4 4.Write the source document number. 2.Debit Accounts Receivable—Kids Time. 2

18. PAID CASH FOR AN EXPENSE Lesson 4-3, page 78 August 12. Paid cash for rent, $250.00. Check No. 4. 1.Which accounts are affected? Rent Expense Cash 4.How is each amount entered in the accounts? Expenses increase on the debit side. Assets decrease on the credit side. 3.How is each classification changed? Expenses are increased. Assets are decreased. 2.How is each account classified? Rent Expense is an expense account. Cash is an asset account. Cash Rent Expense Debit Normal Balance  250.00  Debit Normal Balance

19. PAID CASH FOR AN EXPENSE Lesson 4-3, page 78 August 12. Paid cash for rent, $250.00. Check No. 4. 1 1.Write the date. 3 3.Credit Cash. 4 4.Write the source document number. 2.Debit Rent Expense. 2

20. RECEIVED CASH ON ACCOUNT Lesson 4-3, page 79 August 12. Received cash on account from Kids Time, $100.00. Receipt No. 2. 1 1.Write the date. 2 2.Debit Cash. 4 4.Write the source document number. 3.Credit Accounts Receivable—Kids Time. 3

21. PAID CASH TO OWNER FOR PERSONAL USE Lesson 4-3, page 80 August 12. Paid cash to owner for personal use, $100.00. Check No. 6. 1 1.Write the date. 3 3.Credit Cash. 4 4.Write the source document number. 2.Debit Barbara Treviño, Drawing. 2

22. A COMPLETED JOURNAL PAGE Lesson 4-4, page 82 Only 1 line left…no good…go to next page

23. STARTING A NEW GENERAL JOURNAL PAGE Lesson 4-4, page 83

24. STANDARD ACCOUNTING PRACTICES Lesson 4-4, page 84 5 1 3 4 2 6 5 OPEN to PAGE 84