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Presentation on Recording Process

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Journal Continued
Entering transaction data in the journal is

known as journalizing. Companies make separate journal entries for each transaction. A complete entries consists of 1) the data of the transaction 2) accounts and amounts to be debited and credited 3) a brief explanation of the transaction

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What information do we need to record?

Date Debit account Debit amount Credit account Credit amount Supplementary information

Here is a journal entry from Square pharmaceutics on their transaction

Example: Mr. Samson H Chowdhury, chairman of Square pharmaceutics; In June 1, begins business as a pharmaceutics with a cash investment of 50,000.

The journal will beJune. 1 Cash 50,000 Chowdhury, capital

50,000

Ledger Continued
Process of transferring the amounts in the

journal to the ledger The entire group of accounts maintained by a company is the ledger. It contains all assets, liabilities and owners equity accounts. Companies arrange the ledger accounts in the sequence of balance sheet and financial statement.

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Locate the ledger account for the credit

account Enter the date, journal page number, and credit amount in the ledger Enter the ledger account number in the journal

Here is a table on ledger in cash accounts

Date
May 1 May 7 May 12 May 17 May 31

Explanation
Invest Rent expense Unearned revenue Service revenue Salary expense

Re f

Debit
25,000

Credit

Balance

900 3,500 1,200 2,000

24,100 27,600 28,800 26 ,800(dr)

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A trial balance is the list of accounts and their

balances at a given time. The primary purpose of a trial balance is to prove that the debits equal the credits after posting.

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A test of the accuracy of journalizing and

posting process Preparation

List each ledger account and place the ending account balance in the proper column Total the debit and credit columns Compare the totals

Here is a trial balance on Square Pharmaceutics

SL NO. 1.
2. 3. 4. 5. 6. 7. 8.

Accounts title & explanation Cash

Accounts receivable Capital Accounts payable Rent expenses Salary expenses Service revenue Unearned revenue

Debit 25,800
2,100

Credit

25,000 1,500 900 2,000 3,300 3,500

Continued.
Title - For the period ending date List revenues and subtotal List expenses and subtotal Subtract expenses from revenues

Square pharmaceutics' income statement

Revenue:
Service revenue 9,000 9,000

Expenses:
1. 2. 3. 4. Salary expense 3,000 Rent expense 900 Advertising expense 350 Utility expenses 250 Net income 4,500 4,500

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Title

For the period ending date

List the beginning balance in common stock Add issuances of common stock Subtotal ending common stock

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List beginning balance in retained earnings Add net income Deduct dividends Subtotal ending retained earnings Total common stock and retained earnings

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Title

Date First list and subtotal current assets Then list and subtotal property, plant, and equipment Determine total assets

Assets

Continued
Liabilities

First list and subtotal current liabilities Then list and subtotal long-term liabilities

Total all liabilities Owners Equity

Enter ending common stock and retained

earnings from Statement of Owners Equity

Total liabilities and owners' equity

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Thank u all of audience

THE END ?