Transcript Unit 6 Journalizing The Accounting Cycle Journalize Entries in the General Journal Analyze Transactions and Source Documents Post the General Journal to the General Ledger Post Closing Entries to the Trial Balance Analyze and Review the.

Unit 6
Journalizing
The Accounting Cycle
Journalize Entries
in the General Journal
Analyze Transactions and
Source Documents
Post the General
Journal to the
General Ledger
Post Closing
Entries to
the Trial
Balance
Analyze
and Review
the Financial
Statements
Prepare
Closing
Entries
Prepare
Financial
Statements
Prepare Adjusting
Entries, Vouchers,
and the Trial
Balance
Step 2: Journalizing Entries into the General Journal
The general journal is:
• A day-to-day record of business transactions
• Sometimes referred to as the book
of original entry
Each journal entry includes:
• The date of the transaction
• The account(s) affected by the transaction
• A brief description of the transaction
• The debit or credit amount
Step 3:
Posting the General Journal to the General Ledger
The general ledger:
• Is a complete record of all
financial transactions
• Includes multiple subsidiary ledgers
• Sometimes referred to as the book
of final entry
• Is the source of data for company
financial statements
Step 4:
Preparing Adjusting Entries, Vouchers, and the Trial Balance
The trial balance:
• Lists all the debit and credit balances for an
accounting period
• Includes every general ledger account
• Helps you to find errors in the general ledger
Adjusting and correcting journal entries:
• Are recorded at the end of an accounting
period to adjust general ledger accounts
• Are used to correct errors and/or match
revenues and expenses
Computerized Accounting Systems
 Have practically eliminated the use
of physical book ledgers
 Popular accounting software
packages include:
• QuickBooks
• Peachtree/Sage
• Quicken
• ERPs
• Excel
Journalizing in the General Journal
For Day-to-Day Business Transactions
 Five Basic Steps:
1. Record the date.
2. Record the relevant chart of
accounts number.
3. Record the description of the chart
of accounts number.
4. Record the debit or credit.
5. Record the description of the business
transaction that took place.
Journalizing in the General Journal
For Day-to-Day Business Transactions
Posting to the General Ledger
A Complete Record of Financial Transactions
Summarized General Ledger Balances
Posting to the General Ledger
A Complete Record of Financial Transactions
Subsidiary Ledgers
Correcting Entries
 When you find an error in
the general ledger:
1. Use a journal voucher template.
2. Select a journal entry number.
3. Input information into the voucher.
4. Include supporting documents.
Voucher For a Correcting Journal Entry
Depreciation
Depreciation
=
Expense
Asset Value – Salvage Value
Useful Life of the Asset (in years)
Voucher For a Depreciation Expense
Preparing the Trial Balance
 When analyzing and reviewing the
trial balance, make sure that you:
• Check the balance.
• Look for duplicate entries.
• Investigate transposed numbers.
• Review source documents.
Trial Balance
Example—Debits and Credits Equal
Inventory
 Two Systems:
• Perpetual system
• Periodic system
Xxxxxxxx
Computerized Accounting
Systems
 Quicken
 Quickbooks
 Peachtree / Sage 50
 Microsoft Excel