CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-1 Using Accounting Principles and Records

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 1-1 ACCOUNTING EQUATION page 7 The Accounting Equation AssetsLiabilities Owners’ Equity += The Accounting Equation (LEFT side of equation) Assets (RIGHT side of equation) Liabilities Owners’ Equity + =

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 1-1 Right side Left side AssetsLiabilities Owners’ Equity =+ CREDIT DEBIT T Account (Right side)(Left side) GENERAL JOURNAL page 8

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 1-1 NORMAL BALANCES OF ACCOUNTS page 9

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 1-1 LEDGERS page 10

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 1-1 TERMS REVIEW asset liability equities owners’ equity stockholders’ equity accounting equation source documents double-entry accounting journal special journal account ledger general ledger subsidiary ledger controlling account file maintenance page 11

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-2 Journalizing and Posting Purchases and Purchases Returns

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 1-2 June 1. Purchased video equipment on account from Western Digital Systems, $ Purchase Invoice No JOURNALIZING PURCHASES ON ACCOUNT 1.Write approval date. 4.Write invoice amount. 3.Record invoice number. 2.Write vendor name. page

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON Write the date. 5.Write vendor number. 4.Calculate new account balance. 3.Record the credit amount. 2.Write journal page number. POSTING FROM A PURCHASES JOURNAL page

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON Calculate new account balance. 3.Write column total. 2.Write journal page number. POSTING THE TOTALS OF A PURCHASES JOURNAL page 15 1.Write the date. 5.Write account number

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON Enter accounts to be debited. 3.Record debit memo number. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES page Write the date. 4.Draw diagonal line. 5.Write debit amount. 7.Write credit amount. 6.Enter account to be credited.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 1-2 TERMS REVIEW departmental accounting system merchandising business posting debit memorandum contra account page 17

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-3 Journalizing and Posting Cash Payments

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 14 LESSON 1-3 June 1. Paid cash on account to AudioMax, $514.50, covering Purchase Invoice No. 331 for surround sound audio equipment for $525.00, less 2% discount, $ Check No Write the date.4.Write the debit amount. 3.Record the check number. 2.Enter vendor name. 6.Enter the credit amount. 5.Record the discount amount. JOURNALIZING A PURCHASES DISCOUNT page

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 15 LESSON 1-3 June 2. Paid cash on account to Western Digital Systems, $781.55, covering Purchase Invoice No. 336 for video equipment for $845.00, less Debit Memorandum No. 22 for $47.50, and less 2% discount, $ Check No Amount owed on invoice: Original Purchase Invoice Amount (P336) Purchase Invoice Amount After Return Purchases Return (DM22) –= $ – = $ × 2% = $15.95 – $ = $ Purchases discount: Purchase Invoice Amount After Return Purchases Discount Purchases Discount Rate ×= Amount due after purchases discount: Purchase Invoice Amount After Return Total Amount Due Purchases Discount –= TAKING A DISCOUNT AFTER A PURCHASE RETURN page 20

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 16 LESSON 1-3 June 2. Paid cash for administrative supplies, $ Check No RECORDING ENTRIES IN A CASH PAYMENTS JOURNAL page 21 1.Write the date. 2.Enter the account title. 3.Record the check number. 4.Write the debit amount. 5.Enter the credit amount

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 17 LESSON 1-3 June 30. Paid cash to replenish the petty cash fund, $402.00: administrative supplies, $300.00; advertising expense—video, $56.00; miscellaneous expense, $ Check No Write the date. 3.Record the check number. 2.Enter account titles. 4.Write the debit amounts. 5.Enter the credit amount. CASH PAYMENT TO REPLENISH PETTY CASH page

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 18 LESSON 1-3 POSTING FROM A CASH PAYMENTS JOURNAL page 23

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 19 LESSON 1-3 TERMS REVIEW cash discount purchases discount petty cash page 24