Recording Transactions in a General Journal Chapter 6

The Steps of the Accounting Cycle Collect and verify source documents Analyze each transaction Journalize each transaction Post to ledger Prepare a trial balance Prepare a worksheet Prepare financial statements Journalize and post closing entries Prepare a post-closing trial balance Pg 132

Step 1: Collect and Verify Source Documents A source document the paper evidence of the transaction. Invoice Receipt Memorandum Check stub Pg 133

Step 2: Analyzing Business Transactions Analyze the source document to Determine the affected Determine debits and credits

Step 3: Recording Business Transactions in a Journal Journal – a record of the transactions of a business kept in chronological order Journalizing – the process of recording business transactions in a journal

The Accounting Period An accounting period of 12 months is called a fiscal year. If the fiscal year for a business begins on January 1 and ends on December 31, it is called a calendar year accounting period. Some businesses have different fiscal years. A school district runs July 1 through June 30 and department stores often run February 1 through January 31. Pg 134

Recording a General Journal Entry General Journal – an all purpose journal in which all of the transactions of a business may be recorded.

Transaction 1

Transaction 2

Transaction 3

Transaction 4

Transaction 5

Transaction 6

Transaction 7

Transaction 8

Transaction 9

Transaction 10

Transaction 11

Transaction 12

Transaction 13

Transaction 14

Making Journal Corrections