1. Ch. 4 -- Recording Transactions in a General Journal Mr. Belolan

2. Objectives Describe the first three steps in the accounting cycle Explain why source documents are created and give several examples of source documents Explain the need for journalizing Describe the steps followed to make a general journal entry Correct errors in general journal entries

3. LEQ: How do revenue, expenses and withdrawals affect owner’s equity? Revenue =  Increase OE Expenses =  Decrease OE  Withdrawals =  Decrease OE 

4. Introduction We have two main tools so far: 1.‘T’ Accounts 2.The Basic Accounting Equation

5. The General Journal Our New Tool: The Journal!! Journal  Chronological record of a business’s transactions. Journalizing  Process of recording transactions

6. The General Journal An all purpose journal to record business transactions Example on overhead

7. Question Why keep accounting records?  How well are we doing financially?  How poorly are we doing and what are some areas for improvement? Think of revenue and expenses Relates to business or your own finances

8. Concept Review 1.Which two temporary accounts decrease Owner’s Equity? 2. Which temporary account increases Owner’s Equity?

9. Example Application Problem 4-1 – 4-4  TX: 89-90  WB: 61,63