Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition1 Chapter 6 The Journal and Source Documents 6

Agenda  Learning goals  Vocabulary  What is a journal?  How to make journal entries  Usefulness of journal entries  What is an opening entry? Presentation Title runs here l 00/00/002

Learning goals  Understand what a journal is and how to record business transactions on a journal  What is the purpose of journal entries, what are they used for?  Define what is an opening entry  Explain what is a sales tax and be able to recognize the different taxes (PST, GST, HST)  How to record sales tax from a purchaser’s perspective  How to record sales tax from a seller’s perspective  What is value added tax and how to record it? Presentation Title runs here l 00/00/003

Vocabulary Book of original entry Clearing an account balance Contra account Journal Journal entry Journalizing Opening entry Provincial Sales Tax (PST) Remittance Retail sales tax (RST) Sales tax Value-added tax Presentation Title runs here l 00/00/004

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition5 Making Journal Entries In this section we will learn how to make journal entries.

The Journal  Ledger accounts do now show the transaction together, as it needs to be pieced from different accounts-this can cause confusion.  That is why a journal was created.  Journal: is a book in which the accounting entries for all transactions are first recorded, before they are recorded in the ledger accounts. Presentation Title runs here l 00/00/006

Sequence of Events Transaction occurs Transaction recorded in journal in order by date The accounting entries are transferred to the ledger accounts Presentation Title runs here l 00/00/007

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition8 Making Journal Entries – Example on Page 178 Enter the page number.

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition9 Making Journal Entries Enter the date. The month and year goes in the first date column. The day of the month goes in the second date column.

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition10 Making Journal Entries Enter the debit account(s).

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition11 Making Journal Entries Enter the debit amount(s).

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition12 Making Journal Entries Enter the credit account(s). Be sure to indent the account name.

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition13 Making Journal Entries Enter the credit amount(s).

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition14 Making Journal Entries Write a short description of the transaction. Include the source document number if available.

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition15 Making Journal Entries Skip a line and start the next transaction. If the transaction occurs in the same month as the previous one, you do not need to re-write the month and year.

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition16 Making Journal Entries Enter the debit account(s).

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition17 Making Journal Entries Enter the debit amount(s).

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition18 Making Journal Entries Enter the credit account(s). Be sure to indent the account name.

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition19 Making Journal Entries Enter the credit amount(s).

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition20 Making Journal Entries In this transaction, there are two credit entries.

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition21 Making Journal Entries The amounts of the two credit entries equal the debit entry amount.

Chapter 6 – The Journal and Source Documents l Accounting 1, 7 th Edition22 Making Journal Entries Write a short description of the transaction. Include the source document number if available. You may use more than one line to write the explanation if necessary.

Usefulness of the General Journal Main purpose is to:  Create a continuous record of the accounting entries in the order in which they occurred.  Helps to ensure that the entries balance  Reduces errors  Useful reference Presentation Title runs here l 00/00/0023

The Opening Entry When you start a business you need to make the first journal entry. See the bottom of page 179 for an example. Presentation Title runs here l 00/00/0024

Homework Complete Chapter 6 Vocabulary Sheet. Complete Questions 1 on page 180 and Question 2 on page 181. Journal paper is with me when you need it. Presentation Title runs here l 00/00/0025