1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-1 Using Accounting Principles and Records

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 1-1 ACCOUNTING EQUATION page 7 The Accounting Equation AssetsLiabilities Owners’ Equity += The Accounting Equation (LEFT side of equation) Assets (RIGHT side of equation) Liabilities Owners’ Equity + =

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 1-1 Right side Left side AssetsLiabilities Owners’ Equity =+ CREDIT DEBIT T Account (Right side)(Left side) GENERAL JOURNAL page 8

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 1-1 NORMAL BALANCES OF ACCOUNTS page 9

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 1-1 LEDGERS page 10

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 1-1 TERMS REVIEW asset liability equities owners’ equity stockholders’ equity accounting equation source documents double-entry accounting journal special journal account ledger general ledger subsidiary ledger controlling account file maintenance page 11

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-2 Journalizing and Posting Purchases and Purchases Returns

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 1-2 June 1. Purchased video equipment on account from Western Digital Systems, $845.00. Purchase Invoice No. 336. JOURNALIZING PURCHASES ON ACCOUNT 1.Write approval date. 4.Write invoice amount. 3.Record invoice number. 2.Write vendor name. page 13 2 2 3 3 4 44 1 1

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 1-2 1.Write the date. 5.Write vendor number. 4.Calculate new account balance. 3.Record the credit amount. 2.Write journal page number. POSTING FROM A PURCHASES JOURNAL page 14 4 5 3 1 2

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 1-2 4.Calculate new account balance. 3.Write column total. 2.Write journal page number. POSTING THE TOTALS OF A PURCHASES JOURNAL page 15 1.Write the date. 5.Write account number. 3 4 1 2 5

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 1-2 2.Enter accounts to be debited. 3.Record debit memo number. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES page 16 6 1 1 2 2 3 3 4 75 1.Write the date. 4.Draw diagonal line. 5.Write debit amount. 7.Write credit amount. 6.Enter account to be credited.

12. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 1-2 TERMS REVIEW departmental accounting system merchandising business posting debit memorandum contra account page 17

13. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-3 Journalizing and Posting Cash Payments

14. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 14 LESSON 1-3 June 1. Paid cash on account to AudioMax, $514.50, covering Purchase Invoice No. 331 for surround sound audio equipment for $525.00, less 2% discount, $10.50. Check No. 315. 1.Write the date.4.Write the debit amount. 3.Record the check number. 2.Enter vendor name. 6.Enter the credit amount. 5.Record the discount amount. JOURNALIZING A PURCHASES DISCOUNT page 19 234561

15. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 15 LESSON 1-3 June 2. Paid cash on account to Western Digital Systems, $781.55, covering Purchase Invoice No. 336 for video equipment for $845.00, less Debit Memorandum No. 22 for $47.50, and less 2% discount, $15.95. Check No. 316. Amount owed on invoice: Original Purchase Invoice Amount (P336) Purchase Invoice Amount After Return Purchases Return (DM22) –= $845.00 – 47.50 = $797.50 × 2% = $15.95 – $781.55 = $797.50 Purchases discount: Purchase Invoice Amount After Return Purchases Discount Purchases Discount Rate ×= Amount due after purchases discount: Purchase Invoice Amount After Return Total Amount Due Purchases Discount –= TAKING A DISCOUNT AFTER A PURCHASE RETURN page 20

16. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 16 LESSON 1-3 June 2. Paid cash for administrative supplies, $136.00. Check No. 317. RECORDING ENTRIES IN A CASH PAYMENTS JOURNAL page 21 1.Write the date. 2.Enter the account title. 3.Record the check number. 4.Write the debit amount. 5.Enter the credit amount. 12345

17. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 17 LESSON 1-3 June 30. Paid cash to replenish the petty cash fund, $402.00: administrative supplies, $300.00; advertising expense—video, $56.00; miscellaneous expense, $46.00. Check No. 350. 1.Write the date. 3.Record the check number. 2.Enter account titles. 4.Write the debit amounts. 5.Enter the credit amount. CASH PAYMENT TO REPLENISH PETTY CASH page 22 1 45 2 3

18. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 18 LESSON 1-3 POSTING FROM A CASH PAYMENTS JOURNAL page 23

19. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 19 LESSON 1-3 TERMS REVIEW cash discount purchases discount petty cash page 24