Prepare for your exams
Get points
Guidelines and tips

Sell on Docsity

Prepare for your exams

Study with the several resources on Docsity

Earn points to download

Earn points by helping other students or get them with a premium plan

Guidelines and tips

Sell on Docsity

Prepare for your exams

Study with the several resources on Docsity

Find documents

Prepare for your exams with the study notes shared by other students like you on Docsity

Search Store documents

The best documents sold by students who completed their studies

Search through all study resources

Docsity AINEW

Summarize your documents, ask them questions, convert them into quizzes and concept maps

Explore questions

Clear up your doubts by reading the answers to questions asked by your fellow students

Earn points to download

Earn points by helping other students or get them with a premium plan

Share documents

20 Points

For each uploaded document

Answer questions

5 Points

For each given answer (max 1 per day)

All the ways to get free points

Get points immediately

Choose a premium plan with all the points you need

Study Opportunities

Choose your next study program

Get in touch with the best universities in the world. Search through thousands of universities and official partners

Community

Ask the community

Ask the community for help and clear up your study doubts

University Rankings

Discover the best universities in your country according to Docsity users

Free resources

Our save-the-student-ebooks!

Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors

From our blog

Exams and Study

Go to the blog

identify_and_recording_transactions, Study Guides, Projects, Research of Accounting

Santa Barbara City College Accounting

identify_and_recording_transactions

Typology: Study Guides, Projects, Research

2017/2018

Uploaded on 01/07/2023

mo-salah 🇺🇸

(3)

231 documents

1 / 17

This page cannot be seen from the preview

Don't miss anything!

Slide

3-26

Identify and Recording Transactions

What to Record?

An item should be recognized in the financial

statements if it is an element, is measurable,

and is relevant and a

faithful representation.

LO 3 Identify steps in the accounting cycle.

Partial preview of the text

Download identify_and_recording_transactions and more Study Guides, Projects, Research Accounting in PDF only on Docsity!

Slide

Identify and Recording Transactions

What to Record?

An item should be recognized in the financial

statements if it is an element, is measurable,

and is relevant and a

faithful representation.

LO 3 Identify steps in the accounting cycle.

Slide

General Journal – a chronological record of transactions.

Journal Entries are recorded in the journal.

1. Journalizing

LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance.

September 1: Shareholders invested $15,000 cash in the

corporation in exchange for ordinary shares.

Illustration 3-

Slide

Posting – Transferring amounts from journal to ledger.

LO 4 Illustration 3-

Slide Expanded Example LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance.

The purpose of transaction analysis is

(1) to identify the type of account involved, and

(2) to determine whether a debit or a credit is required.

Keep in mind that every journal entry affects one or more of the following items: assets, liabilities, equity, revenues, or expense.

Slide

2. October 1: Pioneer Advertising purchases office equipment

costing $50,000 by signing a 3-month, 12%, $50,000 note

payable.

Notes payable 50,

Oct. 1 Office equipment 50,

Debit Credit Office Equipment 50,000 50, Debit Credit Notes Payable LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance. Illustration 3-

Slide

3. October 2: Pioneer Advertising receives a $12,000 cash

advance from KC, a client, for advertising services that are

expected to be completed by December 31.

Unearned service revenue 12,

Oct. 2 Cash 12,

Debit Credit Cash 100,000 12, Debit Credit Unearned Service Revenue 12, LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance. Illustration 3-

Slide

5. October 4: Pioneer Advertising pays $6,000 for a one-year

insurance policy that will expire next year on September 30.

Cash 6,

Oct. 4 Prepaid insurance 6,

Debit Credit Cash 100,000 6, Debit Credit Prepaid Insurance 12,

LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance. Illustration 3-

Slide

6. October 5: Pioneer Advertising purchases, for $25,000 on

account, an estimated 3-month supply of advertising

materials from Aero Supply.

Accounts payable 25,

Oct. 5 Advertising supplies 25,

Debit Credit Advertising Supplies 25,000 25, Debit Credit Accounts Payable LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance. Illustration 3-

Slide

8. October 20: Pioneer Advertising’s board of directors

declares and pays a $5,000 cash dividend to shareholders.

Cash 5,

Oct. 20 Dividends 5,

Debit Credit Cash 100,000 5, Debit Credit Dividends 12,

LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance. Illustration 3-

Slide

9. October 26: Employees are paid every four weeks. The

total payroll is $2,000 per day. The pay period ended on

Friday, October 26, with salaries of $40,000 being paid.

Cash 40,

Oct. 26 Salaries expense 40,

Debit Credit Cash 100,000 40, Debit Credit Salaries Expense 12,

LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance. Illustration 3-

Slide

Trial Balance –

A list of each

account and its

balance; used

to prove

equality of debit

and credit

balances.

3. Trial Balance

LO 4 Record transactions in journals, post to ledger accounts, and prepare a trial balance. Illustration 3-

Slide

4. Adjusting Entries

LO 5 Explain the reasons for preparing adjusting entries.

Makes it possible to:

Report on the statement of financial position the

appropriate assets, liabilities, and equity at the statement

date.

Report on the income statement the proper revenues and

expenses for the period.

 Revenues are recorded in the period in which they are earned.  Expenses are recognized in the period in which they are incurred.