Use Journal Entries to Record Transactions and Post to T-Accounts – Principles of Accounting, Volume

This preview shows page 1 - 3 out of 48 pages.

1/18/2020Use Journal Entries to Record Transactions and Post to T-Accounts – Principles of Accounting, Volume 1: Financial Accounting1/48HomeReadSign inPRINCIPLES OF ACCOUNTING, VOLUME 1: FINANCIAL ACCOUNTINGCONTENTSSearch in bookAnalyzing and Recording Transactions16.Use Journal Entries to RecordTransactions and Post to T-AccountsWhen we introduced debits and credits, you learned about the usefulness of T-accounts as a graphicrepresentation of any account in the general ledger. But before transactions are posted to the T-accounts, they are first recorded using special forms known asjournals.JournalsPrevious: Analyze Business Transactions Using the Accounting Equation and Show the Impact of BusinessTransactions on Financial StatementsNext: Prepare a Trial BalanceIncrease Font Size
1/18/2020Use Journal Entries to Record Transactions and Post to T-Accounts – Principles of Accounting, Volume 1: Financial Accounting2/48Accountants use special forms calledjournalsto keep track of their business transactions. A journalis the first place information is entered into the accounting system. A journal is often referred to asthe book of original entry because it is the place the information originally enters into the system. Ajournal keeps a historical account of all recordable transactions with which the company hasengaged. In other words, a journal is similar to a diary for a business. When you enter informationinto a journal, we say you are journalizing the entry. Journaling the entry is the second step in theaccounting cycle. Here is a picture of a journal.You can see that a journal has columns labeled debit and credit. The debit is on the left side,and the credit is on the right. Let’s look at how we use a journal.When filling in a journal, there are some rules you need to follow to improve journal entryorganization.Formatting When Recording Journal EntriesInclude a date of when the transaction occurred.The debit account title(s) always come first and on the left.The credit account title(s) always come after all debit titles are entered, and on the right.The titles of the credit accounts will be indented below the debit accounts.You will have at least one debit (possibly more).You will always have at least one credit (possibly more).The dollar value of the debits must equal the dollar value of the credits or else the equation willgo out of balance.You will write a short description after each journal entry.Skip a space after the description before starting the next journal entry.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 48 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Winter
Professor
JoseAntonioRabelo
Tags
Balance Sheet, Printing Plus

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture