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What I Need to Know?
Imagine a business, such as a major appliance store, that has numerous accounts in its ledger. Imagine that an error was made in recording one of the transactions. The debit of $100 was placed in the wrong account. How would the accountant find this error? The accountant would have to go through all of the accounts....until they find the incorrect entry. This could take a very long time if the company had 1000 vendors supplying equipment for the retail store. This difficulty is eliminated through the use of a JOURNAL.
Why it's important?
The JOURNAL records all parts of a transaction in one place. The date, the debit, the credit and the explanation for each transaction. Transactions can be easily located and accounted for in a chronological order. The main journal of a business is often the GENERAL JOURNAL.
JOURNAL ENTRIES
Each transaction recorded in a journal is called an entry. The process of recording transactions in a journal is called Journalizing. Each entry has four parts.
- the date of the transaction
- the account debited and the amount
- the account credited and the amount
- an explanation giving details of the transaction
Journal Recording ProceduresSTEP 1: Record the DATE
In a journal, the first entry on each page must show the year, the month, and the day. Only the day of the month needs to be recorded for other entries on the page unless the month changes before a page is completed. In the event, the new month is shown in the date column. STEP 2: Record the Debit The name of the account to be debited is written next to the date. The name should be written exactly as it appears in the general ledger. For example, if the cash is received, the appropriate title would be CASH, not Cash Received. The debit amount in the debit column is written in the debit column. STEP 3: Record the Credit The credit is recorded on the next line. The account name is indented. The dollar amount is written in the credit column. STEP 4: Record the Explanation On the next line, starting at the margin, an explanation of the transaction is written. The invoice or cheque number is included. |
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JOURNALIZING PRACTICE
Jounalize the following transactions for KOCH MOVING, using these accounts: Cash, A. Mirabeu, Capital; Rental Advertising Expenses; Truck Expenses; Truck Rental Sales; Salaries Expenses; Utilities Expenses, and Miscellaneous Expenses .
Oct. 1 A. Mirabeu invested $30000 cash.
4 Truck rental sales for the week, $7500
4 paid Gazette & Journal, for Rental Advertising Expenses, $3500
7 paid RJ Truck Repairs, for Truck Expenses $9000, Cheque 241
7 paid salaries, $2100, Cheque 242
10 paid Epcor Utilities, for $750, Cheque 243
11 paid Housin Coffee Ltd., for Miscellaneous expenses, $200, cheque #244.
You will upload a completed Journal as part of your class mark using the Google Classroom folder. Due next class.
Oct. 1 A. Mirabeu invested $30000 cash.
4 Truck rental sales for the week, $7500
4 paid Gazette & Journal, for Rental Advertising Expenses, $3500
7 paid RJ Truck Repairs, for Truck Expenses $9000, Cheque 241
7 paid salaries, $2100, Cheque 242
10 paid Epcor Utilities, for $750, Cheque 243
11 paid Housin Coffee Ltd., for Miscellaneous expenses, $200, cheque #244.
You will upload a completed Journal as part of your class mark using the Google Classroom folder. Due next class.
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Learn More @ ALIS
Alberta Careers Learning & Employment to explore more about Accounting Professionals (wages, education, potential job posting) ALIS Alberta |
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