1. Take out all of CH. 6 in your workbook
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

2. 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.

3. 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.

4. The Accounting Cycle
SECTION 6.1
The Steps of the Accounting Cycle
accounting cycle - the activities a business undertakes to keep its accounting records in an orderly fashion
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.

5. 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.

6. 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.
source document - a paper prepared as evidence is created for each business transaction.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

7. Source Documents
Commonly used source documents are:
an invoice – a source document that lists the quantity, description, unit price, and total cost of the items sold
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
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. Journal – a chronological record of the transactions of a business
The Accounting Cycle
SECTION 6.1
The Third Step in the Accounting Cycle:
Recording Business Transactions in a Journal
Journal – a chronological record of the transactions of a business
Journalizing – the process of recording business transactions
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. fiscal year - A 12 month period.
The Accounting Cycle
SECTION 6.1
The Accounting Period
The accounting period is the length of time that accounting records cover.
fiscal year - A 12 month period.
calendar year - If the fiscal year spans from January 1 to December 31.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

11. Recording Transactions in the General Journal
SECTION 6.2
Recording a General Journal Entry
The most common accounting journal is the
general journal - where all of the transactions of a business may be recorded.
The general journal has two columns:
the left column for recording debits
the right column for recording credits
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

12. Recording Transactions in the General Journal
SECTION 6.2
Recording a General Journal Entry
This is an example of a general journal entry:
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

13. Recording Transactions in the General Journal
SECTION 6.2
Correcting the General Journal
If an error is found, it must be corrected.
Do not erase an error. Draw a line through it with a pen and enter the correct information above the line.
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

14. 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.

15. 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.

16. 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.

17. Review Do the Math – Pg. 135 Invoice Total = ___________ 1 2 3
Step Number
Step Description 1 2 3
Do the Math – Pg. 135
$4.88 $3.19
$7.28 $8.24
Invoice Total = ___________
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

18. WB Problem 6-1
Glencoe Accounting Unit 2 Chapter 6 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.