Chapter 5 Journalizing Transactions

Journal Journal —A form for recording transactions in chronological order

Journal Column Headings  Special Amount Columns  Special Amount Columns—a journal amount column headed with an account title  Often used when there are a large number of transactions involving that particular account  Example: Cash is used for almost all of the transactions we will do in Accounting I. Therefore, Cash has a Debit (received cash) and a Credit (paid cash) column.  General Amount Column  General Amount Column—a journal amount column that is not headed with an account title  Will be used for all other accounts Special Amount Columns General Amount Columns

Recording Transactions 1.Date—write the date in the date column Month in column 1, day in column 2, and the year by the word DATE 2.Enter the name of the account that will go in the General Amount Column 3.Enter the General amount in either the Debit or Credit column 4.Enter the amount only in a Special Amount column Example: Example: Paid cash for supplies $500.00, Check Supplies C

Journalizing a transaction that does not use a Special Amount Column  At this time, we will only have 1 transaction that uses 2 general amount columns and zero special amount columns  Bought Supplies on Account from Biggler Company $200 Memo Supplies M Biggler Co NOTE: The date and source document are only written once per transaction

Journalizing a transaction that uses only Special Amount Columns  At this time, we will only have 1 transaction that uses 2 special amount columns and zero general amount columns  Received Cash from Sales $600 T8 2 8 T NOTE: A checkmark is placed in the account title column to show no title was needed. Checkmarks are used to signify the title was not MISSED just not needed.

Moving to Page 2 of a Journal 18 Carried Forward Write the day of the month in the date column. 2.Write Carried Forward in the account title column. 3.Place a single line at across the money columns only 4.Add each column 5.Prove the journal by adding Debit totals and Credit totals. They should equal. 6.Place a double line across the money columns showing the journal is proved. 7.Transfer the totals to the first row of the next Journal page by writing the date and Brought Forward 18 Brought Forward

Completing a Journal at the end of the month 28 TOTALS Write the last day of the month in the date column. 2.Write TOTALS in the account title column. 3.Place a single line at across the money columns only 4.Add each column 5.Prove the journal by adding Debit totals and Credit totals. They should equal. 6.Place a double line across the money columns showing the journal is proved. 7.Prove Cash 1.Cash on hand at the beginning of the month (see problem instructions for the amount) 2.Plus total cash received during the month (total of Cash Debit column) 3.Equals total (add 1 and 2 and put total on line provided) 4.Less total cash paid during the month (total of Cash Credit column) 5.Equals cash balance at the end of the month (subtract 4 from 3) 6.Checkbook balance on the next unused check stub (see problem instructions for the amount) 7.The amount for #5 should equal the amount for #6

Example of Proving Cash Cash on hand at the beginning of the month $ 0 Plus total cash received during the month $1200 Equals total $1200 Less total cash paid during the month $ 700 Equals cash balance at the end of the month $ 500 Checkbook balance on the next unused check stub $ 500