1. LESSON 3-1 Journals, Source Documents, and Recording Entries in a Journal

2. WHAT IS THE ACCOUNTING EQUATION

3. List 3 Accounting Concepts Business Entity Unit of Measurement Realization of Revenue

4. What are 3 Accounting Concepts Business Entity –Financial information is recorded and reported separately from the owner’s personal financial information Unit of Measurement –Business transactions are stated in numbers that have common values – that is, using a common unit of measurement. Realization of Revenue –Revenue is Recorded at the time goods or services are sold

5. Classifications Accounts Receivable –ASSET Sales –REVENUE Accounts Payable –LIABILITY Rent Expense –EXPENSE Prepaid Insurance –ASSET Drawing –OWNER’S EQUITY Utilities Expense –EXPENSE Cash –ASSET Capital –OWNER’S EQUITY Advertising Expense –EXPENSE Supplies –ASSET

6. Normal Balance Accounts Receivable –DEBIT Accounts Payable –CREDIT Prepaid Insurance –DEBIT Cash –DEBIT Capital –CREDIT Supplies –DEBIT

7. List the 4 components of Owner’s Equity Capital Withdraws Revenue Expenses

8. WHAT IS THE LONG ACCOUNTING EQUATION Assets = Liabilities + OE– Withdrawals+ Revenue– Expenses Assets = Liabilities + OEWithdrawals ++ RevenueExpenses +

9. A form for recording transactions into their debit and credit parts Journal

10. The process for recording transactions Journalizing

11. Journal Permanent record of transactions In chronological order Latin – diurnalis, meaning daily Transactions recorded on a daily basis Transaction = ENTRY

12. Double-entry Accounting Recording transactions into their debit & credit parts Each transaction must affect at least two accounts Debits must equal credits

13. Source Documents Business paper from which information is obtained for a transaction. Proves that the transaction occurred Examples –Check stub –Sales Invoice –Receipt –Calculator Tape –memorandum

14. CHECKS page 58 For all cash payments

15. SALES INVOICES page 58 For all sales on account Prepared in duplicate (original to customer/copy to company) Pre-numbered in sequence

16. OTHER SOURCE DOCUMENTS page 59 receipt For all cash receipts other than sales memorandum Message describing a transaction calculator tape For all cash/credit card sales T= tape 12 = day of month

17. Accounting Concept Objective Evidence –A source document is prepared for every transaction.

18. A GENERAL JOURNAL page 57 For any transaction can be recorded

19. 2.Write the title of the account debited. Write the debit amount. August 1. Received cash from owner as an investment, $5,000.00. Receipt No. 1. page 60 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 2 2 3 3 Kim Parks, Capital 5 0 0 0 00 R1 Cash 2006 Aug 1 5 0 0 0 00

20. 2.Write the title of the account debited. Write the debit amount. August 3. Paid cash for supplies, $275.00. Check No. 1. page 60 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 3 3 Cash 2 7 5 00 C1 Supplies 3 2 7 5 00 Kim Parks, Capital 5 0 0 0 00 R1Cash 2006 Aug 1 5 0 0 0 00

21. Class Work Work Together 3-1 Textbook page 62 Workbook page 37

22. 2.Write the title of the account debited. Write the debit amount. April 1. Received cash from owner as an investment, $1,500.00. Receipt No. 1. page 60 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 2 2 3 3 Norm Derner, Capital 1 5 0 0 00 R1 Cash 2006 Apr 1 1 5 0 0 00 1,500.00 Norm Derner, Capital

23. 2.Write the title of the account debited. Write the debit amount. April 2. Paid cash for supplies, $375.00. Check No. 1. page 60 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 3 3 Cash 3 7 5 00 C1 Supplies 2 3 7 5 00 Norm Derner, Capital 1 5 0 0 00 R1Cash 2006 Apr 1 1 5 0 0 00 375.00

24. Class Work On Your Own 3-1

25. Homework Application 3-1

26. TERMS REVIEW journal journalizing entry general journal double-entry accounting source document check invoice sales invoice receipt memorandum page 62