Professional Documents
Culture Documents
An account can
be illustrated in a
T-account form.
2-2 LO 1
Debits and Credits
Learning
DEBIT AND CREDIT PROCEDURES Objective 2
Define debits and
credits and
Double-entry system explain their use
in recording
Each transaction must affect two or more business
transactions.
accounts to keep the basic accounting
equation in balance.
Recording done by debiting at least one account and
crediting at least one other account.
DEBITS must equal CREDITS.
2-3 LO 2
Debits and Credits
Balance $15,000
2-4 LO 2
Debits and Credits
Balance $1,000
2-5 LO 2
Debits and Credits
2-6 LO 2
Debits and Credits
2-7 LO 2
Debits and Credits
2-8 LO 2
Debits and Credits
Normal
Normal Normal
Normal
Balance
Balance Balance
Balance
Debit
Debit Credit
Credit
2-9
LO 2
Equity
Relationships
Illustration 2-11
Equity relationships
2-10 LO 2
The Account
Learning
Business documents, such as a sales Objective 3
Identify the basic
receipt, a check, or a bill, provide evidence steps in the
of the transaction. recording
process.
2-11 LO 3
Steps in the Recording Process
Learning
The Journal Objective 4
Explain what a
journal is and
Book of original entry. how it helps in
the recording
Transactions recorded in chronological process.
order.
Contributions to the recording process:
1. Discloses the complete effects of a transaction.
GENERAL JOURNAL
Equipment 7,000
Cash 7,000
2-13 LO 4
The Journal
GENERAL JOURNAL
2-14 LO 4
> DO IT!
Illustration 2-16
The general ledger
2-17 LO 5
The Ledger (General ledger)
STANDARD FORM OF ACCOUNT Illustration 2-17
Three-column form
of account
Transferring
journal entries
to the ledger
accounts.
Illustration 2-18
Posting a journal
entry
2-19 LO 6
The Recording Process Illustrated
2-20 LO 6
Illustration 2-21
2-21 Purchase of office equipment LO 6
Illustration 2-22
Receipt of cash
for future service
2-22 LO 6
2-23 Illustration 2-23
Payment of monthly rent LO 6
Illustration 2-24
Payment for
insurance
2-24 LO 6
2-25 Illustration 2-25
Purchase of supplies on credit LO 6
The Recording Process Illustrated
Illustration 2-26
Hiring of employees
2-26 LO 6
Illustration 2-27
2-27 Declaration and payment of dividend LO 6
Illustration 2-28
2-28
Payment of salaries LO 6
2-29 Illustration 2-29
Receipt of cash for services performed LO 6
> DO IT!
2-30 LO 6
2-31 Illustration 2-30 LO 6
General journal entries
Illustration 2-30
General journal entries
2-32 LO 6
Illustration 2-31
General ledger
2-33 LO 6
The Trial Balance
Learning
A trial balance Objective 7
Prepare a trial
balance and
is a list of accounts and their balances explain its
at a given time. purposes.
2-34 LO 7
Trial Balance
Illustration 2-32
A trial balance
2-35 LO 7
Limitations of a Trial Balance
2-36 LO 7
> DO IT!
2-37 LO 7
2-38 LO 7
Summary of Debit/Credit Rules
Question
Debits:
2-39 LO 2
Summary of Debit/Credit Rules
Question
Accounts that normally have debit balances are:
2-40 LO 2
THE END
2-41