BT12203

JOURNAL, LEDGER,
BALANCING OFF ACCOUNT,
TRIAL BALANCE &
FINANCIAL STATEMENTS
Chapter 3
 LECTURE OBJECTIVES
• Prepare the proper accounting record through journal
entry and post them to the appropriate ledgers
• Close-off accounts when appropriate
• Balance-off accounts at the end of a period and bring
down the opening balance to the next period
• Distinguish between a debit balance and a credit
balance
• Prepare a trial balance from a set of accounts
• Describe the financial statements of a proprietorship

BP12103, FPEP, UMS 2

 EXAMPLE 1 (1)
On 1 Feb 2015, Ali invests cash of RM5,000
as capital into his bookstore business.
Prepare journal
Prepare ledger

BP12103, FPEP, UMS 3

 EXAMPLE 1 (2)
Journal
Date Transaction Debit (RM) Credit (RM)
2015
Feb 1 Debit Cash 5,000
Credit Capital 5,000

BP12103, FPEP, UMS 4

 EXAMPLE 1 (3)
Ledger
Debit Cash Account Credit
Date Particular RM Date Particular RM
Feb 1 Capital 5,000

Debit Capital Account Credit

Date Particular RM Date Particular RM
Feb 1 Cash 5,000

BP12103, FPEP, UMS 5

 EXAMPLE 2 (1)
Continue from Example 1.
On 5 Feb 2015, Ali purchases computer
worth RM2,000 for his business by cash.
Prepare journal
Prepare ledger

BP12103, FPEP, UMS 6

 EXAMPLE 2 (2)
Journal
Date Transaction Debit (RM) Credit (RM)
2015
Feb 5 Debit Computer 2,000
Credit Cash 2,000

BP12103, FPEP, UMS 7

 EXAMPLE 2 (3)
Ledger
Debit Computer Account Credit
Date Particular RM Date Particular RM
Feb 5 Cash 2,000

Debit Cash Account Credit

Date Particular RM Date Particular RM
Feb 1 Capital 5,000 Feb 5 Computer 2,000

From Example 1

BP12103, FPEP, UMS 8

 LIST OF LEDGERS
Debit Cash Account Credit
Date Particular RM Date Particular RM
Feb 1 Capital 5,000 Feb 5 Computer 2,000

Debit Capital Account Credit

Date Particular RM Date Particular RM
Feb 1 Cash 5,000

Debit Computer Account Credit

Date Particular RM Date Particular RM
Feb 5 Cash 2,000

BP12103, FPEP, UMS 9

 BALANCE OFF (1)
Debit Cash Account Credit
Date Particular RM Date Particular RM
Feb 1 Capital 5,000 Feb 5 Computer 2,000
Feb 28 Balance 3,000
c/d
5,000 5,000

March 1 Balance 3,000

b/d

BP12103, FPEP, UMS 10

 BALANCE OFF (2)

Debit Capital Account Credit

Date Particular RM Date Particular RM
Feb 1 Cash 5,000
Feb 28 Balance 5,000
c/d
5,000 5,000

March 1 Balance 5,000

b/d

BP12103, FPEP, UMS 11

 BALANCE OFF (3)
Debit Computer Account Credit
Date Particular RM Date Particular RM
Feb 5 Cash 2,000
Feb 28 Balance 2,000
c/d
2,000 2,000

March 1 Balance 2,000

b/d

BP12103, FPEP, UMS 12

 TRIAL BALANCE
Combine Example 1 and Example 2:
Bookstore
Trial Balance as at 28 February 2015
Account Debit (RM) Credit (RM)
Cash 3,000
Computer 2,000
Capital 5,000
5,000 5,000

BP12103, FPEP, UMS 13

 OVERVIEW OF FINANCIAL
STATEMENTS
Four types:
1)Statement of Comprehensive Income
2)Statement of Financial Position
3)Statement of Cash Flow
4)Statement of Changes in Equity

BT12203, FPEP, UMS 14

 STATEMENT OF
COMPREHENSIVE INCOME
• Should have 3 pieces of information in its heading:
– The name of the business
– The title of the statement
– The time period covered by the statement
• The body of SOCI consist of 2 main components:
– Revenue items
– Expenses items
• Comprises of 2 sections:
– Trading section shows the determination of the gross profit/loss
– Profit and loss section shows the net profit/loss

BP12103, FPEP, UMS 15

 STATEMENT OF FINANCIAL
POSITION
• Represents the financial position (financial
health) of a business
• Showing the assets, liabilities and owner’s equity
of the business

BP12103, FPEP, UMS 16

 REFERENCES
1) Frank Wood and Alan Sangster (2012). Business Accounting 1, 12th Edition,
Financial Times Prentice Hall, Pearson.
2) Andrew Leong Fook Chee and Wong Sei Van (2014). Business Accounting, 4th
Edition, Pearson.
3) Fatimah Abd Rauf, Amla Abu and Radziah Mahmud (2014). Financial Accounting
Accounting for Non-Accounting Students, 4th Edition, McGrawHill.

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