Transactions Posting the Eight Column Worksheet Case DevelopmentStep

Transactions, Posting & the Eight. Column Worksheet

Case Development-Step 7: Journalizing Business Transactions Account names need to be entered ONLY if there is NOT a special column. ◦ Mini-Case One line is sufficient for most transactions. Exception - purchasing a computer system on account from Computers, Inc. requires two entry lines in the general columns. If two special columns are used, such as debiting CASH and crediting REVENUE, a check mark is placed in the ACCOUNT column

Case Development-Step 7: Journalizing Transactions (continued) Record the given transactions within the journal. Use the current month and year. Date 1 5 8 14 15 20 27 28 29 30 Transaction Purchased Office Furniture for $5, 000. Issued Check 101. Rent Expense for month is $800. Issued Check 102. Sales Revenue equaled $4, 500. Purchased Supplies for $250. Issued Check 103. Purchased Office Equipment for $2, 500 on account from Computers, Inc. Telephone Expense for month is $75. Issued Check 104. Sales Revenue equaled $2, 800. Paid Computers, Inc. $500 on account. Issued Check 105. Personal withdrawal of $750 by the owner. Issued Check 106. Electricity expense for month is $100. Issued Check 107.

Case Development-Step 8: Posting After recording the transactions in the journal, they need to be posted to the General Ledger. Before posting the journal entries, ensure the Cash (debit), Supplies (debit), and <Owner’s Name>, Capital (credit) ledger accounts have a Beginning Balance. Post only the totals of the three special columns (Revenue, Cash debit, and Cash credit). For the General column, each transaction must be posted individually.

Eight-Column Worksheet Facilitates the preparation of financial statements. ◦ Used to record the end-of-cycle account balance of each General Ledger account (Trial Balance). ◦ Used to identify adjusting entries and then distribute these account balances to the appropriate financial statement columns (Balance Sheet & Income Statement). ◦ Used to assign adjusted trial balances to the appropriate financial statement. The first-step in preparing the worksheet is to record the General Ledger account balances in the Trial Balance columns (covered in next slide show). ◦ See the provided solutions