Journal Entries - Accounting Principles I - Cliffs Notes

The first step in the accounting process is to analyze each transaction and identify what effect it has on the accounts. After making this determination, an ... MyPreferences MyReadingList AccountingPrinciplesI ! Home StudyGuides AccountingPrinciplesI JournalEntries AllSubjects PrinciplesofAccounting TheAccountingEquation FinancialReportingObjectives GenerallyAcceptedAccountingPrinciples InternalControl IntroductiontoAccounting UnderstandingFinancialStatements AnalyzingandRecordingTransactions Double‐EntryBookkeeping JournalEntries TheGeneralLedger TheRecordingProcessIllustrated TheTrialBalance AnalyzingTransactions TAccounts AdjustmentsandFinancialStatements AccruedRevenues AccruedExpenses UnearnedRevenues PrepaidExpenses Depreciation AdjustingEntries TheAdjustmentProcessIllustrated FinancialStatements CompletionoftheAccountingCycle ClosingEntries ThePost‐ClosingTrialBalance TheAccountingCycle ReversingEntries CorrectingEntries TheWorkSheet AccountingforaMerchandisingCompany SalesDiscounts NetSales InventorySystems RecordingPurchases ReturnsandAllowances AccountingInventory PurchasesDiscounts RecordingSales SalesReturnsandAllowances NetPurchasesandGoodsPurchased TheCostofGoodsAvailableandSold GrossProfit FinancialStatementswithInventory AdjustingtheInventoryAccount InventoryAdjustments ClosingEntriesUpdatesInventory SubsidiaryLedgersandSpecialJournals SpecialJournals SubsidiaryLedgers Cash BankReconciliation CreditCardSales CashControls ThePettyCashFund Receivables EvaluatingAccountsReceivable EstimatingBadDebts—AllowanceMethod FactoringReceivables NotesReceivable RecordingNotesReceivableTransactions DiscountingNotesReceivable ReceivablesDefined Inventory InventorySystems:PerpetualorPeriodic InventorySubsidiaryLedgerAccounts CostFlowMethods InventoryErrorsandFinancialStatements EstimatingInventories DeterminingInventoryLevels TheCostofInventory TheValuationofMerchandise OperatingAssets DepreciationofOperatingAssets RepairsandImprovements DispositionofDepreciableAssets NaturalResources IntangibleAssets OperatingAssetsDefined TheCostofProperty,Plant,Equipment JournalEntries TrackingbusinessactivitywithTaccountswouldbecumbersomebecausemostbusinesseshavealargenumberoftransactionseachday.Thesetransactionsareinitiallyrecordedonsourcedocuments,suchasinvoicesorchecks.Thefirststepintheaccountingprocessistoanalyzeeachtransactionandidentifywhateffectithasontheaccounts.Aftermakingthisdetermination,anaccountantentersthetransactionsinchronologicalorderintoajournal,aprocesscalledjournalizingthetransactions.Althoughmanycompaniesusespecializedjournalsforcertaintransactions,allbusinessesuseageneraljournal.Inthisbook,thetermsgeneraljournalandjournalareusedinterchangeably. Thejournal'spagenumberappearsneartheupperrightcorner.Intheexamplebelow,GJ1standsforpage1ofthegeneraljournal.Manygeneraljournalshavefivecolumns:Date,AccountTitleandDescription,PostingReference,Debit,andCredit.     Torecordajournalentry,beginbyenteringthedateofthetransactioninthejournal'sdatecolumn.Forconvenience,includetheyearandmonthonlyatthetopofeachpageandnexttoeachmonth'sfirstentry.Inthenextcolumn,listeachaccountaffectedbythetransactiononaseparateline,andenterashortdescriptionofthetransactionimmediatelybelowthelistofaccounts.Theaccountsbeingdebitedalwaysappearabovetheaccountsbeingcredited,whichareindentedslightly.Thepostingreferencecolumnremainsblankuntilthejournalentryistransferredtotheaccounts,aprocesscalledposting,atwhichtimetheaccount'snumberisplacedinthiscolumn.Finally,enterthedebitorcreditamountforeachaccountintheappropriatecolumnsontherightsideofthejournal.Generally,oneblanklineseparateseachtransaction. Previous DoubleEntryBookkeeping Next TheGeneralLedger TheAccountingEquation FinancialReportingObjectives GenerallyAcceptedAccountingPrinciples InternalControl IntroductiontoAccounting UnderstandingFinancialStatements Double‐EntryBookkeeping JournalEntries TheGeneralLedger TheRecordingProcessIllustrated TheTrialBalance AnalyzingTransactions TAccounts AccruedRevenues AccruedExpenses UnearnedRevenues PrepaidExpenses Depreciation AdjustingEntries TheAdjustmentProcessIllustrated FinancialStatements ClosingEntries ThePost‐ClosingTrialBalance TheAccountingCycle ReversingEntries CorrectingEntries TheWorkSheet SalesDiscounts NetSales InventorySystems RecordingPurchases ReturnsandAllowances AccountingInventory PurchasesDiscounts RecordingSales SalesReturnsandAllowances NetPurchasesandGoodsPurchased TheCostofGoodsAvailableandSold GrossProfit FinancialStatementswithInventory AdjustingtheInventoryAccount InventoryAdjustments ClosingEntriesUpdatesInventory SpecialJournals SubsidiaryLedgers BankReconciliation CreditCardSales CashControls ThePettyCashFund EvaluatingAccountsReceivable EstimatingBadDebts—AllowanceMethod FactoringReceivables NotesReceivable RecordingNotesReceivableTransactions DiscountingNotesReceivable ReceivablesDefined InventorySystems:PerpetualorPeriodic InventorySubsidiaryLedgerAccounts CostFlowMethods InventoryErrorsandFinancialStatements EstimatingInventories DeterminingInventoryLevels TheCostofInventory TheValuationofMerchandise DepreciationofOperatingAssets RepairsandImprovements DispositionofDepreciableAssets NaturalResources IntangibleAssets OperatingAssetsDefined TheCostofProperty,Plant,Equipment × BacktoTop AdamBede hasbeenaddedtoyour ReadingList! 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