1. Chapter 6 Recording Transactions in a General Journal
What You’ll Learn
Explain the first three steps in the accounting cycle.
Give and describe several examples of source documents.
Explain the purpose of journalizing.
Apply information from source documents.
Describe the steps to make a general journal entry.
Make general journal entries.
Correct errors in general journal entries.
Define the accounting terms introduced in this chapter.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 6, Section 1 The Accounting Cycle
What Do You Think?
What happens if you do not keep financial records in an orderly fashion?
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

3. The Accounting Cycle Main Idea You Will Learn
SECTION 6.1
Main Idea
The accounting cycle is a series of steps done in each accounting period to keep records in an orderly fashion.
You Will Learn
the steps in the accounting cycle.
the different types of accounting periods.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

4. The Accounting Cycle Key Terms accounting cycle source document
SECTION 6.1
Key Terms
accounting cycle
source document
invoice
receipt
memorandum
check stub
journal
journalizing
fiscal year
calendar year
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

5. The Accounting Cycle The Steps of the Accounting Cycle
SECTION 6.1
The Steps of the Accounting Cycle
The accounting cycle, the activities a business undertakes to keep its accounting records in an orderly fashion, consists of nine steps. This chapter will cover steps 1, 2, and 3:
Collect and verify source documents.
Analyze each transaction.
Journalize each transaction.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

6. The Accounting Cycle The Steps of the Accounting Cycle SECTION 6.1
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

7. The Accounting Cycle The First Step in the Accounting Cycle:
SECTION 6.1
The First Step in the Accounting Cycle:
Collecting and Verifying Source Documents
A business has several transactions that take place daily. A source document is created for each business transaction. It is paper prepared as the evidence that a transaction occurred. Commonly used source documents are:
an invoice--Lists the quantity, description, unit price, and total cost of the items sold and shipped to a buyer.
a receipt--A source document that serves as a record of cash received
a memorandum-- A brief written message that describes a transaction that takes place within a business.
a check stub-- A source document that lists the same information that appears on a check and shows the balance in the checking account before and after each check is written.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

8. The Accounting Cycle The Second Step in the Accounting Cycle:
SECTION 6.1
The Second Step in the Accounting Cycle:
Analyzing Business Transactions
Determine the debit and credit portions of each transaction by analyzing the source document. In the real world, you must examine this document to determine what happened in a business transaction.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

9. The Accounting Cycle The Third Step in the Accounting Cycle:
SECTION 6.1
The Third Step in the Accounting Cycle:
Recording Business Transactions in a Journal
Now the complete details of each transaction must be entered in a journal, a chronological record of the transactions of a business. This is called journalizing.
A journal can also be called the book of original entry.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

10. The Accounting Cycle The Accounting Period
SECTION 6.1
The Accounting Period
The accounting period is the length of time that accounting records cover. A 12 month period is called a fiscal year. If the fiscal year spans from January 1 to December 31, it is a calendar year.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

11. The Accounting Cycle Key Terms Review accounting cycle
SECTION 6.1
Key Terms Review
accounting cycle
Activities performed in an accounting period that help the business keep its records in an orderly fashion.
source document
A paper prepared as the evidence that a transaction occurred.
invoice
A source document that lists the quantity, description, unit price, and total cost of the items sold and shipped to a buyer.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

12. The Accounting Cycle Key Terms Review receipt
SECTION 6.1
Key Terms Review
receipt
A source document that serves as a record of cash received.
memorandum
A brief written message that describes a transaction that takes place within a business.
check stub
A source document that lists the same information that appears on a check and shows the balance in the checking account before and after each check is written.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

13. The Accounting Cycle Key Terms Review journal
SECTION 6.1
Key Terms Review
journal
A chronological record of the transactions of a business.
journalizing
The process of recording business transactions.
fiscal year
An accounting period of twelve months.
calendar year
Accounting period that begins on January 1 and ends on December 31.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.