2The Recording Process.pptVIP

* * * * * * * 1-* * End of Chapter 1. Source documents, such as a sales slip, a check, a bill, or a cash register tape, provide evidence of the transaction. SO 3 Identify the basic steps in the recording process. Illustration 2-12 Analyze each transaction Enter transaction in a journal Transfer journal information to ledger accounts Steps in the Recording Process Book of original entry. Transactions recorded in chronological order. Contributions to the recording process: Discloses the complete effects of a transaction. Provides a chronological record of transactions. Helps to prevent or locate errors because the debit and credit amounts can be easily compared. SO 4 Explain what a journal is and how it helps in the recording process. The Journal Steps in the Recording Process Enter the transaction date in the date column. J1 General Journal Credit Debit Ref. Account Titles and Explanation Date 2011 Oct. 1 The debit account title is entered first at the extreme left margin in the “account titles and explanation column and the amount is recorded in the DEBIT column . J1 General Journal Credit Debit Ref. Account Titles and Explanation Date 2011 Oct. 1 Cash 15,000 The credit account title is indented and entered at the next line in the “account titles and explanation column and the amount is recoded in the CREDIT column . J1 General Journal Credit Debit Ref. Account Titles and Explanation Date 2011 Oct. 1 Cash 15,000 Owner’s Capital 15,000 A brief explanation of the transaction appears on the line below the credit title. J1 General Journal Credit Debit Ref. Account Titles and Explanation Date 2011 Oct. 1 Cash 15,000 Owner’s Capital 15,000 (Owner’s investment of cash in the business.) The column titled Ref. Is left blank when the journal entry is made. This column is used later when journal entry is transferred to the accounts. J1 General Journal Credit Debit Ref. Account Titles and Explanation Date 2011 Oct. 1 Cash 15,000 Owner’s Capital 15,00