1. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 3-1 Journals, Source Documents, and Recording Entries in a Journal Original created by M.C. McLaughlin, Thomson/South-Western Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School

2. CENTURY 21 ACCOUNTING © Thomson/South-Western 2 LESSON 3-1 Review Transactions are analyzed into debit & credit parts before information is recorded. A form for recording transaction in chronological order is called a journal. Recording transactions in a journal is called journalizing.

3. CENTURY 21 ACCOUNTING © Thomson/South-Western 3 LESSON 3-1 Journals & Journalizing Most businesses conduct transactions every day. Most companies create a more permanent record by recording transactions in a journal. To keep from getting overloaded, business usually record transaction to their journals every day.

4. CENTURY 21 ACCOUNTING © Thomson/South-Western 4 LESSON 3-1 A GENERAL JOURNAL page 57  Information for each transaction recorded in a journal is called an entry  A journal with 2 amount columns in which all kinds of entries can be recorded is called a general journal

5. CENTURY 21 ACCOUNTING © Thomson/South-Western 5 LESSON 3-1 Using a Journal Information recorded in a journal includes the debit & credit parts of each transaction recorded in one place for accuracy Transactions are recorded in a journal in order by date The recording of debit & credit parts of a transaction is called double-entry accounting A business paper from which information is obtained for a journal entry is called a source document Each transaction is described by a source document that proves that the transaction did occur. [Accounting Concept: Objective Evidence]

6. CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 3-1 CHECKS page 58 A business form ordering a bank to pay cash from a bank account is called a check The source documents for cash payments is a check

7. CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 3-1 SALES INVOICES page 58  A form describing the goods or services sold, the quantity, and the price is called an invoice  An invoice used as a source document for recording a sale on account is called a sales invoice  Sales invoices are pre-numbered in sequence to help account for all sales invoices

8. CENTURY 21 ACCOUNTING © Thomson/South-Western 8 LESSON 3-1 OTHER SOURCE DOCUMENTS page 59 memorandum receipt A business form giving written acknowledgement for cash received is called a receipt A form on which a brief message is written describing a transaction is called a memorandum

9. CENTURY 21 ACCOUNTING © Thomson/South-Western 9 LESSON 3-1 OTHER SOURCE DOCUMENTS page 59 calculator tape Businesses use an electronic calculator tape to total the amount of cash received from sales for a day. By totaling all the individual sales, a single source document is produced for the total sales of the day. Time and space are saved by recording only one entry for all of a day’s sales.

10. CENTURY 21 ACCOUNTING © Thomson/South-Western 10 LESSON 3-1 Making Journal Entries page 60 Information for each transaction recorded in a journal is known as an entry. Each entry consists of 4 parts: Date Debit Credit Source document

11. CENTURY 21 ACCOUNTING © Thomson/South-Western 11 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

12. CENTURY 21 ACCOUNTING © Thomson/South-Western 12 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

13. CENTURY 21 ACCOUNTING © Thomson/South-Western 13 LESSON 3-1 TERMS REVIEW journal journalizing entry general journal double-entry accounting source document check invoice sales invoice receipt memorandum page 62