1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Chapter 3 Objectives Define accounting terms related to journalizing transactions Identify accounting concepts and practices related to journalizing transactions Record in a general journal transactions to set up a business Record in a general journal transactions to buy insurance for cash and supplies on account Record in a general journal transactions that affect owner’s equity and receiving cash on account Start a new journal page 1 LESSON 3-1

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 3-1 Lesson 3-1 Journals, Source Documents, and Recording Entries in a General Journal

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 3-1 Journals and Journalizing Journal—a form for recording transactions in chronological order Journalizing—recording transactions in a journal To keep from getting overloaded, businesses usually record transactions in their journals every day.

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 3-1 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 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

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 3-1 CHECKS page 58 Check—a business form ordering a bank to pay cash from a bank account The source document for cash payments is a check.

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 3-1 SALES INVOICES page 58 Invoice—a form describing the goods or services sold, the quantity, and the price Sales invoice—an invoice used as a source document for recording a sale on account; also known as sales ticket or sales slip

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 3-1 OTHER SOURCE DOCUMENTS page 59 memorandum calculator tape receipt Receipt—a business form giving written acknowledgement for cash received Memorandum—a form on which a brief message is written describing a transaction

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 3-1 2.Write the title of the account debited. Write the debit amount. RECEIVED CASH FROM OWNER AS AN INVESTMENT page 60 August 1. Received cash from owner as an investment, $5,000.00. Receipt No. 1. 1.Write the date in the Date column. 3.Write the title of the account credited. Write the credit amount. 4.Write the source document number in the Doc. No. column. 1 4 22 33

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 3-1 PAID CASH FOR SUPPLIES page 61 August 3. Paid cash for supplies, $275.00. Check No. 1. 1 4 22 1.Write the date in the Date column. 4.Write the source document number in the Doc. No. column. 3.Write the title of the account credited. Write the credit amount. 2.Write the title of the account debited. Write the debit amount. 33

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 3-1 Lesson 3-1 Log on to Aplia and let’s look at Work Together 3-1 and On Your Own 3-1 on textbook page 62

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3-2 Journalizing Buying Insurance, Buying on Account, and Paying on Account

12. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 3-2 PAID CASH FOR INSURANCE page 63 August 4. Paid cash for insurance, $1,200.00. Check No. 2. 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. 1 4 22 33

13. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 13 LESSON 3-2 BOUGHT SUPPLIES ON ACCOUNT page 64 August 7. Bought supplies on account from Supply Depot, $500.00. Memorandum No. 1. 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. 14 22 33

14. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 14 LESSON 3-2 PAID CASH ON ACCOUNT page 65 August 11. Paid cash on account to Supply Depot, $300.00. Check No. 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. 14 22 33

15. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 15 LESSON 3-1 Lesson 3-2 Log on to Aplia and let’s look at Work Together 3- 2 and On Your Own 3-2 on textbook page 67

16. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3-3 Journalizing Transactions That Affect Owner’s Equity and Receiving Cash on Account

17. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 17 LESSON 3-3 RECEIVED CASH FROM SALES page 68 August 12. Received cash from sales, $295.00. Tape No. 12. 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. 41 33 22

18. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 18 LESSON 3-3 SOLD SERVICES ON ACCOUNT page 69 August 12. Sold services on account to Oakdale School, $350.00. Sales Invoice No. 1. 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. 41 33 22

19. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 19 LESSON 3-3 PAID CASH FOR AN EXPENSE page 70 August 12. Paid cash for rent, $300.00. Check No. 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. 41 33 22

20. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 20 LESSON 3-3 RECEIVED CASH ON ACCOUNT page 71 August 18. Received cash on account from Oakdale School, $200.00. Receipt No. 2. 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. 41 33 22

21. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 21 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. 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. 41 33 22

22. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 22 LESSON 3-1 Lesson 3-3 Log on to Aplia and let’s look at Work Together 3-3 and On Your Own 3-3 on textbook page 73

23. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3-4 Starting a New Journal Page

24. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 24 LESSON 3-4 A COMPLETED JOURNAL PAGE page 74 Each journal entry requires at least two lines. A journal entry should not be split and journalized on two different pages. If there is only one blank line remaining on a journal page, a new page is started.

25. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 25 LESSON 3-4 STARTING A NEW GENERAL JOURNAL PAGE page 75 2 After one page of a general journal is filled, a new journal page is started. A new page is started by writing the page number in the space provided in the journal heading.

26. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 26 LESSON 3-4 STANDARD ACCOUNTING PRACTICES page 76 1 3 4 6 2 5

27. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 27 LESSON 3-1 Standard Accounting Practices 1.If an error is recorded, cancel the error by neatly drawing a line through the incorrect item. Write the correct item immediately above the canceled item. 2.Draw neat lines through all parts of the incorrect entry. Journalize the entry correctly on the next blank lines. 3.Draw neat lines through all incorrect parts of the entry. Record the correct items on the same lines as the incorrect items, directly above the canceled parts. 4.Words in accounting records are written in full when space permits. All items are written legibly.

28. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 28 LESSON 3-1 Standard Accounting Practices cont. 5. Dollars and cents signs and decimal points are not used when writing amounts on ruled accounting paper. 6. Two zeros are written in the cents column when an amount is in even dollars. 7. Neatness is important. Use a ruler to draw lines.

29. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 29 LESSON 3-1 Lesson 3-4 Log on to Aplia and let’s look at Work Together 3-4 and On Your Own 3-4 on textbook page 77

30. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 30 LESSON 3-1 Chapter 3 Assignments Study Guide Problem 3-1 Application Problem on textbook page 79 Problem 3-2 Application Problem on textbook page 79 Problem 3-3 Application Problem on textbook page 80 Problem 3-4 Application Problem on textbook page 80 Problem 3-5 Application Problem on textbook page 81 Problem 3-6 Mastery Problem on textbook page 82 Problem 3-7 Challenge Problem on textbook page 83