1. Journalizing Transactions
Chapter 4
Journalizing Transactions

2. Vocabulary
Journal – A form for recording transactions in chronological order
Journalizing – recording transactions in a journal
Special amount column – A journal amount column headed with an account title.
General amount column – A journal amount column that is not headed with an account title.

3. Vocab Continued
Entry – Information for each transaction recorded in a journal is called an entry.
Double entry accounting – the recording of debit and credit parts of a transaction.
Source Document – a business paper from which information is obtained for a journal entry.

4. A FIVE-COLUMN JOURNAL
The word journal comes from the Latin diurnalis, meaning daily. Most business conduct transactions every day. To keep from getting overloaded, the business will make entries in their accounting journals every day.
Lesson 4-1, page 66

5. CHECKS
Concept Objective Evidence: Source documents are prepared for each transaction
Lesson 4-1, page 67

6. Vocabulary
Invoice – A form describing the goods or services sold, the quantity, and the price.
Sales invoice – An invoice used as a source document for recording a sale on account

7. SALES INVOICES
Lesson 4-1, page 67

8. Vocabulary
Receipt – A business form giving written acknowledgement for cash received
Memorandum – A form on which a brief message is written describing a transaction.

9. OTHER SOURCE DOCUMENTS
Lesson 4-1, page 68

10. RECEIVED CASH FROM OWNER AS AN INVESTMENT
August 1. Received cash from owner as an investment, $10, Receipt No. 1.
Lesson 4-1, page 69

11. Received cash from owner as an investment
August 1. Received cash from owner as an investment, $10, Receipt No. 1.
Barbara Treviño, Capital
Cash
1. Which accounts are affected? Cash & Barbara Treviño, Capital
Debit
Normal Balance
10,000.00
2. How is each account classified?
Cash asset Barbara Treviño, Capital owner’s equity. 
3. How is each classification changed?
Assets increased/Owner’s equity is increased.
Credit
Normal Balance
10,000.00 
4. How is each amount entered in the accounts? Assets increase on the debit side. Owner’s equity accounts increase on the credit side.
Lesson 4-1, page 69

12. Received cash from owner as an investment
August 1. Received cash from owner as an investment, $10, Receipt No. 1. 1 2 4 3
1. Write the date.
2. Debit Cash.
3. Credit Barbara Treviño, Capital.
4. Write the source document number.
Lesson 4-1, page 69

13. PAID CASH FOR SUPPLIES 1 2 4 3 1. Write the date. 2. Debit Supplies.
3. Credit Cash.
4. Write the source document number.
Lesson 4-1, page 70

14. Complete 4-1 work together and on your own

15. PAID CASH FOR INSURANCE
August 4. Paid cash for insurance, $1, Check No. 2.
1. Which accounts are affected? Prepaid Insurance & Cash
Cash
Prepaid Insurance
Debit
Normal Balance
2. How is each account classified?
Prepaid Insurance is an asset account.
Cash is an asset account.
1,200.00 
3. How is each classification changed?
Assets are increased.
Assets are decreased.
Debit
Normal Balance
1,200.00 
4. How is each amount entered in the accounts?
Assets increase on the debit side.
Assets decrease on the credit side.
Lesson 4-2, page 72

16. Paid cash for insurance (continued)
August 4. Paid cash for insurance, $1, Check No. 2. 2 3 1 4
1. Write the date.
2. Debit Prepaid Insurance.
3. Credit Cash.
4. Write the source document number.
Lesson 4-2, page 72

17. PAID CASH ON ACCOUNT   1. Which accounts are affected?
August 11. Paid cash on account to Ling Music Supplies, $1,360.00, Check No. 3.
1. Which accounts are affected?
Accounts Payable—Ling Music Supplies & Cash
Cash
Accts. Pay.—Ling Music Supplies
1,360.00
Credit
Normal Balance 
2. How is each account classified?
Accts. Pay.—Ling Music Supplies is a liability account. Cash is an asset account.
3. How is each classification changed?
Liabilities are decreased/Assets are decreased.
Debit
Normal Balance
1,360.00 
4. How is each amount entered in the accounts?
Liabilities decrease on the debit side.
Assets decrease on the credit side.
Lesson 4-2, page 74

18. PAID CASH ON ACCOUNT (continued)
August 11. Paid cash on account to Ling Music Supplies, $1,360.00, Check No. 3. 2 3 1 4
1. Write the date.
2. Debit Accounts Payable—Ling Music Supplies.
3. Credit Cash.
4. Write the source document number.
Lesson 4-2, page 74

19. Complete 4-2 work together and on your own

20. RECEIVED CASH FROM SALES
August 12. Received cash from sales, $ Tape No. 12.
1. Which accounts are affected?
Cash & Sales
Sales
Cash
Debit
Normal Balance
2. How is each account classified?
Cash is an asset account.
Sales is an revenue account.
325.00 
3. How is each classification changed?
Assets are increased.
Revenues are increased.
Credit
Normal Balance
325.00 
4. How is each amount entered in the accounts?
Assets increase on the debit side.
Revenues increase on the credit side.
Lesson 4-3, page 76

21. RECEIVED CASH FROM SALES (continued)3 1 4 2
August 12. Received cash from sales, $ Tape No. 12.
1. Write the date.
2. Debit Cash.
3. Credit Sales.
4. Write the source document number.
Lesson 4-3, page 76

22. SOLD SERVICES ON ACCOUNT
August 12. Sold services on account to Kids Time, $ Sales Invoice No. 1.
1. Which accounts are affected?
Accounts Receivable—Kids Time & Sales
Sales
Accounts Rec.—Kids Time
Debit
Normal Balance
200.00
2. How is each account classified?
Accounts Receivable—Kids Time is an asset account.Sales is as revenue account. 
3. How is each classification changed?
Assets are increased.
Revenues are increased.
Credit
Normal Balance
200.00 
4. How is each amount entered in the accounts?Assets increase on the debit side.
Revenues increase on the credit side.
Lesson 4-3, page 77

23. SOLD SERVICES ON ACCOUNT (continued)2 1 4 3
August 12. Sold services on account to Kids Time, $ Sales Invoice No. 1.
1. Write the date.
2. Debit Cash.
3. Credit Sales.
4. Write the source document number.
Lesson 4-3, page 77

24. PAID CASH FOR AN EXPENSE
August 12. Paid cash for rent, $ Check No. 4.
1. Which accounts are affected?
Rent Expense & Cash
Cash
Rent Expense
Debit
Normal Balance
2. How is each account classified?
Rent Expense is an expense account.
Cash is an asset account.
250.00 
3. How is each classification changed?
Expenses are increased.
Assets are decreased.
Debit
Normal Balance
250.00 
4. How is each amount entered in the accounts?
Expenses increase on the debit side.
Assets decrease on the credit side.
Lesson 4-3, page 78

25. PAID CASH FOR AN EXPENSE (continued)2 3 1 4
August 12. Paid cash for rent, $ Check No. 4.
1. Write the date.
2. Debit Rent Expense.
3. Credit Cash.
4. Write the source document number.
Lesson 4-3, page 78

26. RECEIVED CASH ON ACCOUNT
August 12. Received cash on account from Kids Time, $ Receipt No. 2.
Accounts Rec.—Kids Time
Cash
1. Which accounts are affected?
Cash & Accounts Receivable—Kids Time
Debit
Normal Balance
100.00
2. How is each account classified?
Cash is an asset account. Accounts Rec.—Kids Time is an asset account. 
3. How is each classification changed?
Assets are increased. Assets are decreased.
Debit
Normal Balance
100.00 
4. How is each amount entered in the accounts?
Assets increase on the debit side.
Assets decrease on the credit side.
Lesson 4-3, page 79

27. RECEIVED CASH ON ACCOUNT (continued)3 1 4 2
August 12. Received cash on account from Kids Time, $ Receipt No. 2.
1. Write the date.
2. Debit Cash.
3. Credit Sales.
4. Write the source document number.
Lesson 4-3, page 79

28. PAID CASH TO OWNER FOR PERSONAL USE
August 12. Paid cash to owner for personal use, $ Check No. 6.
1. Which accounts are affected? Barbara Treviño, Drawing & Cash
Cash
Barbara Treviño, Drawing
Debit
Normal Balance
2. How is each account classified?
Barbara Treviño, Drawing is an owner’s equity account. Cash is an asset account.
100.00 
3. How is each classification changed? Withdrawals are increased. Assets are decreased.
Debit
Normal Balance
100.00 
4. How is each amount entered in the accounts? Owner’s equity accounts decrease on the debit side. Assets decrease on the credit side.
Lesson 4-3, page 80

29. PAID CASH TO OWNER FOR PERSONAL USE2 1 4 3
August 12. Paid cash to owner for personal use, $ Check No. 6.
1. Write the date.
2. Debit Barbara Treviño, Drawing.
3. Credit Cash.
4. Write the source document number.
Lesson 4-3, page 80

30. Complete 4-3 work together and on your own

31. PROVING A JOURNAL PAGE     2 General $ 7,960.00 $12,840.00
Column Debit Column Totals Credit Column Totals
General $ 7, $12,840.00
Sales 2,439.00
Cash 12, ,000.00 1
Totals $20, $20,279.00 2 3
1. Add each amount column.
2. Add debit column totals, and then add the credit column totals.
3. Verify that the total debits and total credits are equal.
Lesson 4-4, page 82

32. RULING A JOURNAL PAGE 1 5 2 3 4 1. Rule a single line.
2. Write the date.
3. Write Carried Forward.
4. Write each column total.
5. Rule double lines.
Lesson 4-4, page 83

33. STARTING A NEW JOURNAL PAGE1  3 4 2
1. Write the page number.
2. Write the date.
3. Write Brought Forward and place a check mark in the Post. Ref. column.
4. Record the column totals brought forward from the previous page.
Lesson 4-4, page 84

34. PROVING A JOURNAL AT THE END OF A MONTH   
Column Debit Column Totals Credit Column Totals
General $ 8, $12,840.00
Sales 4,411.00
Cash 14, ,019.00 1
Totals $23, $23,270.00 2 3
1. Add each amount column.
2. Add debit column totals, and then add the credit column totals.
3. Verify that the total debits and total credits are equal.
Lesson 4-4, page 84

35. RULING A JOURNAL AT THE END OF A MONTH1 5 4 2 3
1. Rule a single line.
2. Write the date.
3. Write Totals.
4. Write each column total.
5. Rule double lines.
Lesson 4-4, page 84

36. Complete 4-4 work together and on your own