Accounting Chapter 6
Aim: What are four source documents and when would they be used? Do Now: Take a Do Now slip. Answer: Why do people use journals? Have you ever kept a daily journal of the things that happen during your day? Give an example. *Take out the Chapter 6 packet.
Accounting Cycle Accounting Cycle activities performed in an accounting period that help the business keep its records in an orderly fashion. Figure 6-1 accounting cycle (pg. 132)
Accounting Cycle 1. Collect an verify source documents 2. Analyze each transaction 3. Journalize each transaction 4. Post to the ledger 5. Prepare a trial balance 6. Prepare a work sheet 7. Prepare financial statements 8. Journalize and post closing entries 9. Prepare a post-closing trial balance
The First Step Collecting and Verifying Source Documents Source Document a paper prepared as evidence that a transaction occurred.
Examples of Source Documents Invoice (bill) lists specific information about a business transactions involving the buying or selling of an item on account. The invoice contains: the date of the transaction the quantity description cost of each item.
Receipt Receipt a record of cash received by a business. It includes: the date the payment was received the name of the person or business from whom the payment was received the amount of the payment.
Memorandum Memorandum a brief written message that describes a transaction that takes place within a business. A memorandum is often used if no other source document exists for the business transaction.
Check Stub Check Stub the check stub lists the same information that appears on a check: The date written the person or business to whom the check was written the amount of the check. The check stub also shows the balance in the checking account before and after each check is written.
Problem 6.1 pg. 135 Analyze the invoice shown and answer the questions.
Exit Slip Write down two source documents you might use in your personal life. What problems might arise if you did not keep source documents? Write 3 sentences on the importance of keeping source documents for your personal life.
Aim: What are four source documents and when would they be used? Do Now: Take a Do Now slip. On October 26 th, Erikson Inc. issued Check 325 for $2,500 to purchase new office furniture. Answer: What source document would be prepared as evidence of this transaction?
Source Documents Invoice (bill) lists specific information about a business transactions involving the buying or selling of an item on account. Receipt a record of cash received by a business. Memorandum a brief written message that describes a transaction that takes place within a business. Check Stub the check stub lists the same information that appears on a check.
Group Roles Accountant Write down the 5 7 business transactions. Record each transaction in an appropriate T account Test for the equality of debits and credits Business Owner(s) Prepare the appropriate source documents Invoice, Receipt, Memorandum and Check Stub Artist Design the company logo and slogan *You will be presenting your company to the class. All members must stand up front but you may only have one speaker for the group*
Exit Slip Write down two source documents you might use in your personal life. What problems might arise if you did not keep source documents?
Aim: How do you record business transactions in a general journal? Do Now: Take a post it. Answer: Your business just purchased new equipment on account for $3,000. What source document would be prepared for this transaction?
Project Accountant Write down the 5 7 business transactions. Record each transaction in an appropriate T account Test for the equality of debits and credits Business Owner Prepare the appropriate source documents Invoice, Receipt, Memorandum and Check Stub Artist Design the company logo and slogan *You will be presenting your company to the class. All members must stand up front but you may only have one speaker for the group*
Presentation State your company name and service you provide. Discuss your logo and slogan and why you chose them. Talk about the accounts your business has and the type of source documents you deal with. SMILE You have 20 minutes to finish you project and practice your presentation. If you are done, complete problem 6.1 in your workbook
Homework Department stores often have fiscal years that begin on February 1 st and end on January 31 st of the following year. Why do you think that is? School districts usually have fiscal years that begin on July 1 st and end on June 30 th. Why do you think that is?
Aim: How do you record business transactions in a general journal? Do Now: Take out your notebook and write down the Aim. Take out your HW (answers to questions)
Accounting Cycle 1. Collect an verify source documents 2. Analyze each transaction 3. Journalize each transaction 4. Post to the ledger 5. Prepare a trial balance 6. Prepare a work sheet 7. Prepare financial statements 8. Journalize and post closing entries 9. Prepare a post-closing trial balance
The Accounting Period Accounting period accounting records are summarized for a certain period of time. Month, quarter or a year. Fiscal year an accounting period of 12 months. Calendar year A fiscal year that begins on January 1 st and ends on December 31 st.
Accounting period Department stores often have fiscal years that begin on February 1 st and end on January 31 st of the following year. Why do you think that is? School districts usually have fiscal years that begin on July 1 st and end on June 30 th. Why do you think that is?
Recording Business Transactions in a Journal Journal a record of the transactions of a business. Kept in chronological order (the order in which the transactions occur) Journalizing process of recording business transactions in a journal. Also called the book of original entry
Recording a General Journal Entry General journal an all-purpose journal in which all of the transactions of a business may be recorded. The general journal has two amount columns. The amount column on the left records debits. The amount column on the right records credits.
Journal Entry On Nov. 1 st, Maria Sanchez took $25,000 of personal savings and deposited that amount in the business checking account, in the name of Roadrunner Delivery Service Memorandum 1. What is the complete entry in general journal form? General Journal Date Description Post Ref. Debit Credit 1 1 2 2 3 3 4 4
Assignment Complete Problems 6.2 & 6.3
Aim: How do you record business transactions in a general journal? Do Now: Take a general journal slip. On the back of the slip answer: 1. Are journal pages numbered? Read page 148 in the Chapter 6 packet: 2. How are you supposed to correct errors in the general journal? 3. Complete problem 6.4 from last class.
Do Now Part Two! Use the following transaction to fill out the slip: K. Erikson withdrew $5,000 from the business for personal use, memorandum 1.
Do Now K. Erikson withdrew $5,000 from the business for personal use, memorandum 1. Date Description General Journal Post Ref. Debit Credit 1 1 2 2 3 3 4 4
General Journal Problem 6.4
Problem 6.5 In your group, complete problem 6.5.
Exit Summary Recording account information in chronological order is known as: 1. Posting 2. Journalizing 3. Analyzing 4. Processing