GOOD MORNING!!

Reminder: A business transaction is anytime that an exchange of value happens within the normal operation of a businessEvery transaction must be recordedEvery transaction affects at least two accountsUp to now:We have been using T-AccountsDebits = Credits

The owner invests $20 000 into the businessCashT. Rantula, Capital20 00020 000

The concepts of T-Accounts remainDebits = CreditsAt least two accounts are affectedBut rather than entering transactions into the T-Accounts immediately, we use the General Journal

Your personal diary

The textbook says:The journal records all parts of a transaction in one place. The date, the debit, the credit and an explanation for each transaction are recorded together.

Can record manually or electronically

Think of the stereotypical girl that enters her thoughts into a journal every night before bed

The accountant loves to get his/her thoughts and feelings (transactions) into his/her journal as soon as something happens within the business.

ADVANTAGESThe complete transaction is recorded in one placeReduces ErrorsEasier to make a mistake in T-Accounts (Debit but no credit, only one account, etc)Transactions are listed in chronological orderShows a picture of every day at the business

This unit is all about the different steps of the accounting cycleThe accounting cycle is the process an accountant goes though during a fiscal periodsBegins with a business transactionEnds with the preparation of the Financial Statements & Closing Entries

Chart1

Sheet1

Sales

1st Qtr8.2

2nd Qtr3.2

3rd Qtr1.4

4th Qtr1.2

To resize chart data range, drag lower right corner of range.

DateParticularsPrDRCR

Summarize each transaction with words and as short as possibleExample: Owner invested cashExample: Made cash sale of ticketsExample: Bought equipment on accountTHIS IS A MUST FOR EACH AND EVERY TRANSACTION!

An increase in amount:

DebitCreditAssets

Drawings

ExpensesLiabilities

Owners Equity

Revenue

A decrease in amount:

DebitCreditLiabilities

Owners Capital

RevenueAssets

Drawings

Expenses

AccountDEBITCREDITAssets

Liabilities

Owners Equity

Drawings

Revenues

Expenses

On October 1st the owner, T. Rantula invests $20 000 into the business

On October 4th the business sold $16 000 worth of tickets

DateParticularsPrDRCROct1Cash2000000 T. Rantula, Capital2000000Invested additional cash

4Cash1600000Ticket Sales1600000Ticket sales for the week

BEGIN ON PAGE 112 in your textQuestion #1-3We will take up #1 in 15 minutes