LESSON 3 1 Journals Source Documents and Recording

LESSON 3 -1 Journals, Source Documents, and Recording Entries in a Journal 1. Identify the steps in which transactions are recorded in a journal. 2. Explain the importance of source-documents. 3. List the four parts of a journal entry. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

2 Competency: Understanding the Accounting Cycle for a Service Business n Objectives: n 36 Use source documents to journalize transactions. n 38 Prepare customer invoices for a service business. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3 -1

3 Chapter 3 Objectives n Define accounting terms related to journalizing transactions. n Identify accounting concepts and practices related to journalizing transactions. n Record transactions to set up a business in a five-column journal. n Record transactions to buy insurance for cash and supplies on account in a five-column journal. n Record transactions that affect owner’s equity and receiving cash on account in a five-column journal. n Prove and rule a five-column journal and prove cash. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3 -1

4 n Journal – a form for recording transactions in chronological order. n Journalizing – recording transactions in a journal. n Special amount column – a journal amount column headed with an account title. n General amount column – a journal amount column that is not headed with an account title. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 2 -1

5 n Entry – Information for each transaction recorded in a journal. n Double-entry accounting – the recording of debit and credit parts of a transaction. n Source document – a business paper from which information is obtained for a journal entry. n Check – a business form ordering a bank to pay cash from a bank account. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 2 -1

6 n Invoice – a form describing the goods or services sold, the quantity, and the price. n Sales invoice – An invoice used as a source document for recording a sale on account. n Receipt – A business form giving written acknowledgement for cash received. n Memorandum – a form on which a brief message is written describing a transaction. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 2 -1

7 A FIVE-COLUMN JOURNAL CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning page 57 LESSON 3 -1

8 CHECKS CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning page 58 LESSON 3 -1

9 SALES INVOICES CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning page 58 LESSON 3 -1

10 OTHER SOURCE DOCUMENTS page 59 calculator tape receipt memorandum CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3 -1

11 RECEIVED CASH FROM OWNER AS AN INVESTMENT page 60 August 1. Received cash from owner as an investment, $5, 000. Receipt No. 1. 1 3 4 3 2 1. Write the date in the Date column. 2. Write the debit amount in the Cash Debit column. 3. Record the credit amount in the General Credit column. Write the title of the account in the Account Title column. 4. Write the source document number in the Doc. No. column. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3 -1

12 PAID CASH FOR SUPPLIES page 61 August 3. Paid cash for supplies, $275. 00. Check No. 1. 1 2 4 2 3 1. Write the date in the Date column. 2. Record the debit amount in the General Debit column. Write the title of the account in the Account Title column. 3. Write the credit amount in the Cash Credit column. 4. Write the source document number in the Doc. No. column. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3 -1

13 DEFINE TERMS REVIEW page 62 In your Chapter 3 Terms Word Document and Save. AS Chapter 3 Terms. Your. Name n n n journalizing special amount column general amount column entry double-entry accounting n n n source document check invoice sales invoice receipt memorandum CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3 -1

14 Exit Ticket for Chapter 3 -1 In a Word Document, Save. AS: Chapter 3 -1 AYUYour. Name Drop a copy in my In. Box today before you leave! 1. In what order are transactions recorded in a journal? 2. Why are source-documents important? 3. List the four parts of a journal entry. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3 -1

15 Chapter 3 -1 Assignments Complete on Aplia n Work Together 3 -1 n On Your Own 3 -1 n Application Problem 3 -1 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 3 -1