© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. College Accounting 11 th Edition The General Journal and the General Ledger chapter 3

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The process of recording business transactions in a journal is called ____________________. In the journal, both the debits and the credits of the entire transaction are recorded in one place. A journal is called a ____________________ because the first place an entry is recorded is in the journal. A ____________________ is a book in which business transactions are recorded as they happen. Information about transactions come from ____________________ that furnish proof that a transaction has taken place. The basic journal form is the ____________________. The General Journal

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. (a) Transaction (a) – June1: J. Conner deposited $90,000 in a bank account in the name of Conner’s Whitewater Adventures.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Step 1: ___________________________________ Step 2: ___________________________________ Step 3: ___________________________________ ___________________________ Step 4: ___________________________________ ___________________________________ ___________________________ Step 5: ___________________________________ Decide which accounts should be debited and credited

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Analyze the Transaction Using the T- Account Approach increaseincreaseincreaseincrease Cash increases, so it is debited increaseincreaseincreaseincrease J. Conner, Capital increases, so it is credited

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Journal Entry 1: ______ 2: _______ 3: ______________ 3: _____________ 4: ___________ _____________ 4: ____________ 5: __________ ____________

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. (b) Transaction (b) – June 2: Conner’s Whitewater Adventures bought equipment, paying cash, $38,000. ________________

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. When a business buys an asset, the asset should be recorded at the _________________ (the agreed amount of a transaction). This is called the _________________. (c) Assume in Transaction (c) that Signal Products had been ______________ $7,500 for the equipment. The _____ of the equipment to Conner’s Whitewater Adventures is $4,320. It is recorded at ______________. The Cost Principle

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. (c) Transaction (c) – June 3: Conner’s Whitewater Adventures bought equipment on account from Signal Products, $4,320. Note that the month and year are not repeated unless they change or a new journal page begins

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. (d) Transaction (d) – June 4: Conner’s Whitewater Adventures paid Signal Products, a creditor, on account,$2,000.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The journal is the __________________ because each transaction must first be recorded in full in the journal. The __________________ gives us a complete record of the transactions recorded in each individual account. The _______________ contains all the accounts. The process of transferring information from the journal to the ledger is called _____________. Posting to the General Ledger

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Practice Exercise 1

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Objective

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. STEP 1. Write the ____________________ in the account’s _______ column. STEP 2. Write the ____________________ in the _______ or _______ column, and enter the _______ in the _______ column under Debit or Credit. STEP 3. Write the ___________ of the journal in the _______ _________ column of the ledger account. (This is a _________________; it tells you where the amount came from.) STEP 4. Record the _______________ in the _________ column of the journal. The Posting Process

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  ___________________   ___________________   ___________________   ___________________ 

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  ___________________   ___________________   ___________________   ___________________ 

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. __________________________

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Practice Exercise 2

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Objective

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Preparation of the Trial Balance The _______________ is simply a list of accounts that have balances. Even when the debit and credit balances are ________, other types of errors may slip through— for example, 1.____________________ ____________________ _______. 2.____________________ ____________________ _______.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. STEP 1. ______________________________________ STEP 2. ______________________________________ STEP 3 ______________________________________ Steps in the Accounting Process

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Practice Exercise 3

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Source Documents

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Practice Exercise 4

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Manual Ruling Method Manual Correcting Errors ___________ Posting Has Taken Place An entry to record payment of $1,500 rent was incorrectly debited to _____________________.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Manual Ruling Method An entry for $120 payment for _______________ was recorded as $210. Manual Correcting Errors _______ Posting Has Taken Place

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Manual Ruling Method Manual Correcting Errors _________ Posting Has Taken Place An entry to record cash received for professional fees was correctly journalized as $400. However, it was posted as a debit to __________ and a credit to __________ for $4,000.

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The correcting entry method is used when incorrectly journalized amounts have been posted. There are two correcting entry methods. _________ method. Simply make ______ entry that ______ the error and provides the ______ account. _________ method. The first step ______ the error made by the ______ entry. The second step includes the ______ entry. Correcting Entry Method—Manual or Computerized

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. (Jan. 9) Transaction (Jan. 9) : A $620 payment for advertising was incorrectly journalized and posted as a debit to Miscellaneous Expense and a credit to Cash for $620. The error was discovered on January 27. The following correction uses the one-step method:

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The following correction uses the Two-step method

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Practice Exercise 5

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. College Accounting 11 th Edition The General Journal and the General Ledger chapter 3