1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3-1 How do you record business transactions in a journal and provide objective evidence for those transactions?

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Journal Journal – form for recording transactions in chronological order Latin diurnalis meaning daily 2 LESSON 3-1

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 3-1 A GENERAL JOURNAL page 57

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using a Journal Entry – information for each transaction recorded in a journal General journal – journal with two amount columns in which all kinds of entries can be made Accuracy – information recorded in the journal must match the information in the transaction data Chronological record – transactions are recorded in a journal by date and in one location, making it easy to locate Double-Entry Accounting – recording the debit and credit parts of a transaction (assures debits = credits) Source documents – business paper from which information is obtained for a journal entry Proof that the transaction occurred OBJECTIVE EVIDENCE Checks, sales invoices, receipts, calculator tapes, and memorandums 4 LESSON 3-1

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning CHECKS Business form ordering a bank to pay cash from a bank account Source document for cash payments Business’s record of information is the check stub; checks are prenumbered to help maintain accurate records 5 LESSON 3-1 page 58

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning SALES INVOICES Invoice - form describing goods or services sold, price, and quantity Sales invoice – invoice used as a sales document for a sale on account (sales ticket/sales slip) Prepared in duplicate; prenumbered 6 LESSON 3-1 page 58

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

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 Recording Entries in a general journal You must first analyze the transaction to determine the debit/credit parts Draw T accounts to help you Journals are considered permanent accounting records and are usually required to be kept in ink DOLLAR AND CENTS SIGNS ARE NOT USED WHEN WRITING AMOUNTS ON RULED ACCOUNTING PAPER 9 LESSON 3-1

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 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

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 3-1 TERMS REVIEW journal journalizing entry general journal double-entry accounting source document check invoice sales invoice receipt memorandum page 62

12. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3-2 How do you journalize transactions for Buying Insurance, Buying on Account, and Paying on Account?

13. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 13 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

14. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 14 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

15. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 15 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

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 LESSON 3-4 Starting a New Journal Page

23. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 23 LESSON 3-4 A COMPLETED JOURNAL PAGE page 74

24. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 24 LESSON 3-4 STARTING A NEW GENERAL JOURNAL PAGE page 75 2

25. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 25 LESSON 3-4 STANDARD ACCOUNTING PRACTICES page 76 1 3 4 6 2 5