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Unit VI-Part 1-D

Unit VI-Part 1-D

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accounting lectures. enjoy!:)
accounting lectures. enjoy!:)

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Published by: bum_24 on Nov 22, 2008
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05/09/2014

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Unit VI – Part 1General Journal, General Ledger, Trial Balance
Overview
Background
The work for each accounting period follows a cycle, which is called the
accounting cycle
. This refers to a series of sequential steps or procedures performed to accomplish the accounting process.1.Journalizing2.Posting to the General Ledger 3.Trial Balance Preparation4.Adjusting the Books5.Preparing Financial Statements6.Closing the Books7.Preparing Post Closing Trial Balance8.Reversing Entries 
Purpose
The purpose of Unit IV “General Journal, General Ledger, Trial Balance ” isto introduce the student on the use of a general journal, general ledger and the preparation of the trial balance. 
In this unit
This unit contains the following topics:
TopicsSee Page
Journalizing (Step 1)2
of D
Journal Rules4
of D
Journal Entries6
of D
The General Ledger9
of D
The Chart of Accounts11
of D
Posting to the General Ledger (Step 2)13
of D
Balancing Accounts16
of D
Trial Balance17
of D
Limitations of the Trial Balance19
of D
 
Marivic D. Valenzuela-Manalo
Page 1of D
 
Journalizing (Step 1)
 
Overview
Bookkeeping is the systematic and chronological recording of transactions in books of accounts following a series of steps and procedures commonlyreferred to as the accounting cycle. This bookkeeping procedure begins with journalizing which is the first part of this unit. 
Journal
Accounting is based on double-entry bookkeeping, which means thataccountants record the
dual effects of a business transaction
. The basicrecording procedure in accounting involves a device called a
 journal 
. A journal is a daily record of business transactions that shows in one place the
complete debit and credit effect of each transaction on the accounts of thebusiness in chronological order 
. The general journal is also known as the
book of original entries
.
 
Journalizing
The chronological recording of the business transactions in the book of original entry. 
Illustration
Below is an example of a typical journal.
JOURNALPAGEDateP A R T I C U L A R SP/RDEBITCREDIT
 
Continued on next page
Marivic D. Valenzuela-Manalo
Page 2of D
 
Journalizing (Step 1),
Continued
 
Legend
The definitions below illustrate the legend:
 Date
, is used to show the day of the month on which each transaction takes place.
 Particulars
column or sometimes called the
 Account Titles and Explanation
column, is used to show every account title affected by each transaction andto give some explanation or justification of the debits and credits being madeto the accounts.
 P/R (Posting Reference)
column is important because it indicates thenumbers of the accounts in the ledger to which the debits and creditsrecorded in the journal have been transferred. In manual systems, theseaccount numbers are inserted
at the proper 
time in the P/R column of the journal.
 Debit and credit 
columns indicate the amounts to be debited or credited tothe account titles written in the particulars column. 
Marivic D. Valenzuela-Manalo
Page 3of D

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