1. The Journal and Source Documents CHAPTER 6

2. A journal is a book in which the accounting entries for all transactions are first recorded, before they are recorded in the ledger accounts The Journal

3. The simplest form of journal is the two-column general journal. One side is a debit amount and the other is a credit amount. There is also columns for date, particulars and posting reference. Example on page 158 The Two-Column General Journal

4. Page number Entry balance Blank line Compound entry Account Title Brief explanation Features of a General Journal

5. This is the process of recording accounting entries in the journal. The journal is known as the book of original entries because each balanced accounting entry is recorded there first. Journalizing Transactions are recorded in a journal in order of date The accounting entries are transferred to the ledger accounts Transactions occur

6. Recording the Data  The Year - Do not repeat it for each entry  The Month - Do not repeat it for each entry. Enter a new month at the point where it occurs  The day – The date is repeated no matter how many transactions occur on any given day. Journalizing in the Two-Columns General Journal

7. Four Steps: Enter the day in the date column Enter the name of the accounts to be debited at the left hand side Enter the name of the accounts to be credited at the left hand side. They are indented Write a brief explanation for the entry beginning at the left side of the particular column on the line beneath the last credit item Steps in Recording a Journal Entry

8. This is the journal entry that starts the books off, or “opens” them. Page 170 The Opening Entry

9. A source document is a business paper that shows the nature of a transaction and provides all of the information needed to account for it properly. Source Documents

10. A cash sales slip is a business form showing the details of a transaction in which goods or services are sold to a customer for cash. Journal Entry Dr.Cr. Bank$35.90 Sales $35.90 Cash Sales Slip

11. A sales invoice is a business form showing the details of a transaction in which goods or services are sold on account. Page 166 Sales Invoice

12. DrCr A/R – S. & s. Boatworks$835.70 Sales $835.70 Journal Entry for a Sales Invoice

13. A point of sale (POS) terminal is a computerized sales register that allows a business and its customers to exchange funds electronically using debit or credit cards. At the end of the business day, the accounting clerk will use the POS terminal to print at least two source documents Point of Sale Summaries

14. The other common POS summary is a report called a transaction log. Is document generated by a point of sale terminal that contains detailed information about each transaction. Customer’s name and card number. Transaction Log

15. It is important for you to realize that credit and debit card transactions are treated as cash receipt from the business’s point of view. DrCr Bank$734.18 Sales $734.18 Journal Entry for POS Summaries

16. A purchase invoice is a business form representing a purchase of goods or service on account. Purchase Invoice

17. DrCr Equipment Repairs $241.50 A/P – General Engineering $241.50 Journal Entries for Purchases Invoices

18. A cheque copy is a document supporting the accounting entry for a payment by cheque Cheque Copies

19. DrCr A/P – Sterling Spars$1802.90 Bank$1802.90 Journal entry for a Cheque Copy

20. This is a business paper that lists the money coming in from customers. Remittance advice This is a form accompanying the cheque explaining the payment Cash Receipts Daily Summary

21. DrCr Bank$2142.24 A/R – A. Baldwin$375.00 A/R – F. Perri$965.52 A/R – Pier – Pier 10 Marina$801.72 Journal Entry for a Cash Receipts Daily Summary

22. A bank debit advice is a bank document informing the business if a decrease made in the business’s bank account Bank Advices

23. A bank credit advice is a bank document informing the business of an increase is made in the business’s bank account Bank Credit Advice

24. DrCr Company A Books Bank Charges Expense$113.50 Bank$113.50 National Bank Books A/P Company A Bank account$113.50 Interest and charges earned$113.50 Journal entry for a bank debit Advice

25. Dr Cr Company A Books Bank$110.50 Interest earned $110.50 National Bank Books Interest Expense $110.50 A/P Company A Account $110.50 Journal entry for a bank credit Advice