1. Power Notes Chapter 5 Learning Objectives C5
Accounting Systems and Internal Controls
Learning Objectives
1. Basic Accounting Systems
2. Internal Control
3. Manual Accounting Systems
4. Adapting Manual Accounting Systems
5. Computerized Accounting Systems C5

2. Power Notes Chapter 5 Accounting Systems and Internal Controls
Slide # Power Note Topics 3 9 17 23 31 37
Internal Control Framework, Procedures
Special Journals, Ledgers
Revenue Journal and Ledgers
Cash Receipts Journal and Ledgers
Purchases Journal and Ledgers
Cash Payments Journal and Ledgers
Note: To select a topic type the slide # and press Enter.

3. Internal Control Framework
1. Control Environment
Control Environment

4. Internal Control Framework
1. Control Environment
2. Risk Assessment
Risk Assessment
Control Environment

5. Internal Control Framework
1. Control Environment
2. Risk Assessment
3. Control Procedures
Control Procedures
Risk Assessment
Control Environment

6. Internal Control Framework
1. Control Environment
2. Risk Assessment
3. Control Procedures
4. Monitoring
Monitoring
Control Procedures
Risk Assessment
Control Environment

7. Internal Control Framework
1. Control Environment
2. Risk Assessment
3. Control Procedures
4. Monitoring
5. Information and Communication
Communication
Monitoring
Control Procedures
Risk Assessment
Control Environment

8. Internal Control Procedures
Competent Personnel
Rotating Duties
Assigning Responsibility
Separating Responsibilities for Related Operations
Separating Accounting and Asset Custody
Proofs and Security Measures

9. General Ledger and Subsidiary Ledgers
Cash
Accts. Receivable
Supplies
Accts. Payable

10. General Ledger and Subsidiary Ledgers
Accounts Receivable
Subsidiary Ledger A B C D
Customer Accounts
Cash
Accts. Receivable
Supplies
Accts. Payable

11. General Ledger and Subsidiary Ledgers
Accounts Receivable
Subsidiary Ledger A B C D
Customer Accounts
Cash
Accts. Receivable
Supplies
Accounts Payable
Subsidiary Ledger A B C D
Creditor Accounts
Accts. Payable

12. Special Journals
SELLING
BUYING

13. Special Journals Revenue Journal Rendering of services on account
SELLING
Rendering of services on account
recorded in
Revenue Journal
BUYING

14. Special Journals Revenue Journal Cash Receipts Journal
SELLING
Rendering of services on account
recorded in
Revenue Journal
Receipt of cash from any source
recorded in
Cash Receipts Journal
BUYING

15. Special Journals Revenue Journal Cash Receipts Journal
SELLING
Rendering of services on account
recorded in
Revenue Journal
Receipt of cash from any source
recorded in
Cash Receipts Journal
BUYING
Purchase of items on account
recorded in
Purchases Journal

16. Special Journals Revenue Journal Cash Receipts Journal
SELLING
Rendering of services on account
recorded in
Revenue Journal
Receipt of cash from any source
recorded in
Cash Receipts Journal
BUYING
Purchase of items on account
recorded in
Purchases Journal
Payment of cash for any purpose
recorded in
Cash Payments Journal

17. The Revenue Journal Revenue Journal Page 35
Invoice Post Accts. Rec. – Debit
Date No. Account Debited Ref. Fees Earned – Credit
3/2 615 MyMusicClub.com 2,200
3/6 616 RapZone.com 1,750
3/ Web Cantina 2,650
3/ MyMusicClub.com 3,000
Totals 9,600
All sales on account are recorded in this journal. Each sales invoice is listed in numerical order. This journal is often referred to as an invoice register.

18. Posting to the Subsidiary Ledger
Revenue Journal
Page 35
Invoice Post Accts. Rec. – Debit
Date No. Account Debited Ref. Fees Earned – Credit
3/ MyMusicClub.com 2,200
3/ RapZone.com 1,750
3/ Web Cantina 2,650
3/ MyMusicClub.com 3,000
Totals 9,600
Each debit is posted to the accounts receivable subsidiary ledger.
Accounts Receivable Subsidiary Ledger
MyMusicClub.com
Date Item P.R. Debit Credit Balance

19. Posting to the Subsidiary Ledger
Revenue Journal
Page 35
Invoice Post Accts. Rec. – Debit
Date No. Account Debited Ref. Fees Earned – Credit
3/ MyMusicClub.com  2,200
3/ RapZone.com 1,750
3/ Web Cantina 2,650
3/ MyMusicClub.com 3,000
Totals 9,600
Each debit is posted to the accounts receivable subsidiary ledger.
Accounts Receivable Subsidiary Ledger
MyMusicClub.com
Date Item P.R. Debit Credit Balance
3/2 R35 2,200 2,200

20. Posting to the Subsidiary Ledger
Revenue Journal
Page 35
Invoice Post Accts. Rec. – Debit
Date No. Account Debited Ref. Fees Earned – Credit
3/ MyMusicClub.com 2,200
3/ RapZone.com 1,750
3/ Web Cantina 2,650
3/ MyMusicClub.com 3,000
Totals 9,600    
Each debit is posted to the accounts receivable subsidiary ledger.
Accounts Receivable Subsidiary Ledger
MyMusicClub.com
Date Item P.R. Debit Credit Balance
3/1 R35 2,200 2,200
3/27 R35 3,000 5,200

21. Posting to the General Ledger
Revenue Journal
Page 35
Invoice Post Accts. Rec. – Debit
Date No. Account Debited Ref. Fees Earned – Credit
3/ MyMusicClub.com 2,200
3/ RapZone.com 1,750
3/ Web Cantina 2,650
3/ MyMusicClub.com 3,000
Totals 9,600    
The total is posted to Accounts Receivable AND to Fees Earned.
General Ledger
Account: Accounts Receivable No. 12
Date Item P.R. Debit Credit Balance
3/1 Bal 3,400 

22. Posting to the General Ledger
Revenue Journal
Page 35
Invoice Post Accts. Rec. – Debit
Date No. Account Debited Ref. Fees Earned – Credit
3/ MyMusicClub.com 2,200
3/ RapZone.com 1,750
3/ Web Cantina 2,650
3/ MyMusicClub.com 3,000
Totals 9,600
(12) (41)    
The total is posted to Accounts Receivable AND to Fees Earned.
General Ledger
Account: Accounts Receivable No. 12
Date Item P.R. Debit Credit Balance
3/1 Bal 3,400
3/31 R35 9, ,000 

23. The Cash Receipts Journal
3/1 Rent Revenue
3/19 Web Cantina 3,400 3,400
3/28 MyMusicClub.com 2,200 2,200
3/30 RapZone.com 1,750 1,750
Totals ,350 7,750
Cash Receipts Journal
Other Accounts
Post Accounts Receivable Cash
Date Account Credited Ref. Credit Credit Debit
Page 14
All cash received from any source is recorded in this journal. The total Cash Debit column equals the total of the two credit columns.

24. Posting to the Subsidiary Ledger
Cash Receipts Journal
Page 14
Other Accounts
Post Accounts Receivable Cash
Date Account Credited Ref. Credit Credit Debit
3/1 Rent Revenue
3/19 Web Cantina 3,400 3,400
3/28 MyMusicClub.com 2,200 2,200
3/30 RapZone.com 1,750 1,750
Totals ,350 7,750
Each Accounts Receivable credit is posted to the accounts receivable subsidiary ledger.
Accounts Receivable Subsidiary Ledger
Web Cantina
Date Item P.R. Debit Credit Balance
3/1 Bal 3,400
3/27 R35 2,650 6,050 

25. Posting to the Subsidiary Ledger
Cash Receipts Journal
Page 14
Other Accounts
Post Accounts Receivable Cash
Date Account Credited Ref. Credit Credit Debit
3/1 Rent Revenue
3/19 Web Cantina 3,400 3,400
3/28 MyMusicClub.com 2,200 2,200
3/30 RapZone.com 1,750 1,750
Totals ,350 7,750 
Each Accounts Receivable credit is posted to the accounts receivable subsidiary ledger.
Accounts Receivable Subsidiary Ledger
Web Cantina
Date Item P.R. Debit Credit Balance
3/1 Bal 3,400
3/18 R35 2,650 6,050
3/19 CR14 3,400 2,650 

26. Posting to the General Ledger
Cash Receipts Journal
Page 14
Other Accounts
Post Accounts Receivable Cash
Date Account Credited Ref. Credit Credit Debit
3/1 Rent Revenue
3/19 Web Cantina 3,400 3,400
3/28 MyMusicClub.com 2,200 2,200
3/30 RapZone.com 1,750 1,750
Totals ,350 7,750
( )    
The three highlighted items are posted to the general ledger.
General Ledger
Account: Accounts Receivable No. 12
Date Item P.R. Debit Credit Balance
3/1 Bal 3,400
3/31 R35 9, ,000 

27. Posting to the General Ledger
Cash Receipts Journal
Page 14
Other Accounts
Post Accounts Receivable Cash
Date Account Credited Ref. Credit Credit Debit
3/1 Rent Revenue
3/19 Web Cantina 3,400 3,400
3/28 MyMusicClub.com 2,200 2,200
3/30 RapZone.com 1,750 1,750
Totals ,350 7,750
( ) (12) (11)    
The three highlighted items are posted to the general ledger.
General Ledger
Account: Accounts Receivable No. 12
Date Item P.R. Debit Credit Balance
3/1 Bal 3,400
3/31 R35 9, ,000
3/31 CR14 7,350 5,650 

28. General Ledger Accounts Receivable Control Account
Accounts Receivable No. 12
Date Item P.R. Debit Credit Balance
3/1 Bal ,400
3/31 R35 9, ,000
3/31 CR14 7,350 5,650 
If the accounts receivable account in the general ledger only shows summary totals, where are the individual customer balances?

29. Accounts Receivable Subsidiary
General Ledger
Accounts Receivable
Control Account
Account:
Accounts Receivable No. 12
Date Item P.R. Debit Credit Balance
3/1 Bal ,400
3/31 R35 9, ,000
3/31 CR14 7,350 5,650 
MyMusicClub.com
Date Item P.R. Debit Credit Balance
3/2 R35 2, ,200
3/27 R35 3, ,200
3/28 CR14 2,200 3,000
Accounts Receivable Subsidiary
Ledger
RapZone.com
Date Item P.R. Debit Credit Balance
3/6 R35 1,750 1,750
3/30 CR14 1,750 0
Web Cantina
Date Item P.R. Debit Credit Balance
3/1 Bal ,400
3/18 R35 2,650 6,050
3/19 CR14 3,400 2,650 

30. Accounts Receivable Subsidiary
General Ledger
Accounts Receivable
Control Account
Account:
Accounts Receivable No. 12
Date Item P.R. Debit Credit Balance
3/1 Bal ,400
3/31 R35 9, ,000
3/31 CR14 7,350 5,650 
MyMusicClub.com
Date Item P.R. Debit Credit Balance
3/2 R35 2, ,200
3/27 R35 3, ,200
3/28 CR14 2,200 3,000
Accounts Receivable Subsidiary
Ledger
RapZone.com
Date Item P.R. Debit Credit Balance
3/6 R35 1,750 1,750
3/30 CR14 1,750 0
Web Cantina
Date Item P.R. Debit Credit Balance
3/1 Bal ,400
3/18 R35 2,650 6,050
3/19 CR14 3,400 2,650 

31. The Purchases Journal Purchases Journal 3/3 Howard Supplies 600 600
Page 11
Accts. Other
Post Payable Supplies Accounts Post
Date Account Credited Ref. Credit Debit Debit Ref. Amount
3/3 Howard Supplies
3/7 Donnelly Supplies
3/12 Jewett Bus. Syst. 2,800 Office Equip ,800
3/19 Donnelly Supplies 1,450 1,450
3/27 Howard Supplies
Totals 6,230 3,430 2,800
All purchases on account are recorded in this journal. The total credits to Accounts Payable equals the total of the two debit columns.

32. Posting to the Subsidiary Ledger
Purchases Journal
Page 11
Accts. Other
Post Payable Supplies Accounts Post
Date Account Credited Ref. Credit Debit Debit Ref. Amount
3/3 Howard Supplies
3/7 Donnelly Supplies
3/12 Jewett Bus. Syst. 2,800 Office Equip ,800
3/19 Donnelly Supplies 1,450 1,450
3/27 Howard Supplies
Totals 6,230 3,430 2,800
Each credit is posted to the accounts payable subsidiary ledger.
Accounts Payable Subsidiary Ledger
Howard Supplies
Date Item P.R. Debit Credit Balance

33. Posting to the Subsidiary Ledger
Purchases Journal
Page 11
Accts. Other
Post Payable Supplies Accounts Post
Date Account Credited Ref. Credit Debit Debit Ref. Amount
3/3 Howard Supplies 
3/7 Donnelly Supplies
3/12 Jewett Bus. Syst. 2,800 Office Equip ,800
3/19 Donnelly Supplies 1,450 1,450
3/27 Howard Supplies
Totals 6,230 3,430 2,800
Each credit is posted to the accounts payable subsidiary ledger.
Accounts Payable Subsidiary Ledger
Howard Supplies
Date Item P.R. Debit Credit Balance
3/3 P

34. Posting to the Subsidiary Ledger
Purchases Journal
Page 11
Accts. Other
Post Payable Supplies Accounts Post
Date Account Credited Ref. Credit Debit Debit Ref. Amount
3/3 Howard Supplies
3/7 Donnelly Supplies
3/12 Jewett Bus. Syst. 2,800 Office Equip ,800
3/19 Donnelly Supp. 1,450 1,450
3/27 Howard Supplies
Totals 6,230 3,430 2,800     
Each credit is posted to the accounts payable subsidiary ledger.
Accounts Payable Subsidiary Ledger
Howard Supplies
Date Item P.R. Debit Credit Balance
3/3 P
3/27 P ,560

35. Posting to the General Ledger
Purchases Journal
Page 11
Accts. Other
Post Payable Supplies Accounts Post
Date Account Credited Ref. Credit Debit Debit Ref. Amount
3/3 Howard Supplies
3/7 Donnelly Supplies
3/12 Jewett Bus. Syst. 2,800 Office Equip ,800
3/19 Donnelly Supp. 1,450 1,450
3/27 Howard Supplies
Totals 6,230 3,430 2,800      
General Ledger
The highlighted items are posted to the general ledger.
Date Item P.R. Debit Credit Balance
Account:
Accounts Payable No. 21
Date Item P.R. Debit Credit Balance
3/1 Bal ,230 

36. Posting to the General Ledger
Purchases Journal
Page 11
Accts. Other
Post Payable Supplies Accounts Post
Date Account Credited Ref. Credit Debit Debit Ref. Amount
3/3 Howard Supplies
3/7 Donnelly Supplies
3/12 Jewett Bus. Syst. 2,800 Office Equip. 18 2,800
3/19 Donnelly Supp. 1,450 1,450
3/27 Howard Supplies
Totals 6,230 3,430 2,800
( 21) (14) ( )      
General Ledger
The highlighted items are posted to the general ledger.
Date Item P.R. Debit Credit Balance
Account:
Accounts Payable No. 21
Date Item P.R. Debit Credit Balance
3/1 Bal ,230
3/31 P11 6,230 7,460 

37. The Cash Payments Journal
Page 7
Other Accounts
Ck. Post Accounts Payable Cash
Date No. Account Debited Ref. Debit Debit Credit
3/2 150 Rent Expense 1, ,600
3/ Grayco Supplies 1,230 1,230
3/ Jewett Bus. Syst. 2,800 2,800
3/ Donnelly Supp
3/ Utilities Expense 1,050 1,050
3/ Howard Supplies
Totals 2,650 5,050 7,700
All cash payments are recorded in this journal. Every check is listed in numerical order. This journal is often referred to as a check register.

38. Posting to the Subsidiary Ledger
Cash Payments Journal
Page 7
Other Accounts
Ck. Post Accounts Payable Cash
Date No. Account Debited Ref. Debit Debit Credit
3/2 150 Rent Expense 1, ,600
3/ Grayco Supplies 1,230 1,230
3/ Jewett Bus. Syst. 2,800 2,800
3/ Donnelly Supp
3/ Utilities Expense 1,050 1,050
3/ Howard Supplies
Totals 2,650 5,050 7,700
Accounts Payable Subsidiary Ledger
Each Accounts Payable debit is posted to the accounts payable subsidiary ledger.
Grayco Supplies
Date Item P.R. Debit Credit Balance
3/1 Bal ,230 

39. Posting to the Subsidiary Ledger
Cash Payments Journal
Page 7
Other Accounts
Ck. Post Accounts Payable Cash
Date No. Account Debited Ref. Debit Debit Credit
3/2 150 Rent Expense 1, ,600
3/ Grayco Supplies 1,230 1,230
3/ Jewett Bus. Syst. 2,800 2,800
3/ Donnelly Supp
3/ Utilities Expense 1,050 1,050
3/ Howard Supplies
Totals 2,650 5,050 7,700 
Accounts Payable Subsidiary Ledger
Each Accounts Payable debit is posted to the accounts payable subsidiary ledger.
Grayco Supplies
Date Item P.R. Debit Credit Balance
3/1 Bal ,230
3/15 CP7 1,230 0 

40. Posting to the General Ledger
Cash Payments Journal
Page 7
Other Accounts
Ck. Post Accounts Payable Cash
Date No. Account Debited Ref. Debit Debit Credit
3/2 150 Rent Expense 1, ,600
3/ Grayco Supplies 1,230 1,230
3/ Jewett Bus. Syst. 2,800 2,800
3/ Donnelly Supp
3/ Utilities Expense 1,050 1,050
3/ Howard Supplies
Totals 2,650 5,050 7,700
( )     
General Ledger
The highlighted items are posted to the general ledger.
Date Item P.R. Debit Credit Balance
Account:
Accounts Payable No. 21
3/1 Bal ,230
3/31 P11 6,230 7,460 

41. Posting to the General Ledger
Cash Payments Journal
Page 7
Other Accounts
Ck. Post Accounts Payable Cash
Date No. Account Debited Ref. Debit Debit Credit
3/2 150 Rent Expense 52 1, ,600
3/ Grayco Supplies 1,230 1,230
3/ Jewett Bus. Syst. 2,800 2,800
3/ Donnelly Supp
3/ Utilities Expense 54 1,050 1,050
3/ Howard Supplies
Totals 2,650 5,050 7,700
( ) (21) (11)     
General Ledger
The highlighted items are posted to the general ledger.
Date Item P.R. Debit Credit Balance
Account:
Accounts Payable No. 21
3/1 Bal ,230
3/31 P11 6,230 7,460
3/31 CP7 5,050 2,410 

42. Power Notes This is the last slide in Chapter 5. Chapter 5
Accounting Systems and Internal Controls
This is the last slide in Chapter 5.
Note: To see the topic slide, type 2 and press Enter.