FABM1 - Lesson 9 - Recording Journal Entries.pptx

journalizing

1. Recording Transactions in the Journal Fundamentals of accountancy, business, & management 1

2. Let’s Recall The following slides illustrate different pictures that depict some of the concepts that we have tackled from the previous sessions. Guess which concept/term do they represent.

3. E I C

4. S E R V I C E

5. C O T N G

6. A C C O U N T I N G

7. Y L

8. C Y C L E

9. O U L N T Y

10. D O U B L E E N T R Y

11. Good Job!!!

12. Let’s Play Another Game Pinoy Henyo – Girls vs Boys Edition:

13. Based on the mystery word, can you guess the title of our next topic?

14. Recording Transactions in the Journal

15. Learning Objectives Analyze common business transactions using the rules of debit and credit. Record transactions of a service business in the general journal Solve simple problems and exercises in the analyses of business transaction

16. Are you ready to learn?

17. Recording Transactions in the Journal

18. Just Imagine… Just imagine you have your own business who is offering a service to customers.

19. Think of these questions:

20. Recording Transactions in the Journal Recording the business transactions in the general journal is the second step of the accounting process .

21. Recording Transactions in the Journal This step is important as having the correct and accurate recording of transactions in the business’ book of original entry ensures the accuracy and veracity of the accounting information generated as well.

22. The Journal The journal is a chronological record of events or business transactions showing all the effects of each transaction in terms of debits and credits.

23. The Journal Because transactions are initially recorded in the journal, it is called the book of original entry . The simplest journal is the general journal .

24. A journal entry should contain the following:

25. A journal entry should contain the following:

26. A journal entry should contain the following: Date of Transaction Name of Account To be Debited Name of Account To be Credited Short description of transaction General Ledger Number Amount to be Debited Amount to be Credited

27. ILLUSTRATIVE EXAMPLE Presume that Mika Tan established Mika Tea Shop with an initial investment of ₱ 350,000 on May 29, 2018. The journal entry is shown below:

28. The Simple and Compound Journal Entry When only two accounts are affected, you call this a simple entry where in there is only one debit account and one credit account.

29. The Simple and Compound Journal Entry In some cases, a transaction would require the use of three or more accounts, in which case the entry is called a compound entry .

30. Journalizing the Transactions Journalizing is the process of recording a transaction in the journal after it has been recognized and measured.

31. Journalizing the Transactions In journalizing transactions, the double-entry system is used . In this case, two or more accounts are affected by each transaction.

32. Journalizing the Transactions It follows that for every debit, a corresponding credit is made . In this way, the equality of the accounting equation is maintained .

33. Rules for Debit and Credit

34. Steps in Analyzing Transactions

35. Any Question?

36. Let’s Practice! The teacher will show a series of economic events in a service business and the students will determine whether this event will result in recording of a DEBIT or a CREDIT transaction. Debit Credit vs Clap or Stomp !!!

37. Let’s Practice! RULES: If you will record the transaction under DEBIT , clap your hands. If you will record the transaction under CREDIT , stomp your feet .

38. Debit or Credit? Clap or Stomp!!! Increase of ₱10,000 worth of supplies Debit

39. Debit or Credit? Clap or Stomp!!! Decrease of Accounts Payable, ₱25,000 Debit

40. Debit or Credit? Clap or Stomp!!! Increase in Service Revenue, ₱45,000 Credit

41. Debit or Credit? Clap or Stomp!!! Increase in Utilities Expense, ₱1,000 Debit

42. Debit or Credit? Clap or Stomp!!! Increase in Capital, ₱235,000 Credit

43. Great Work!!!

44. Let’s Reflect:

45. Any Questions?

46. Performance Task

47. Instructions Selected transactions from Sienna’s Spa and Salon are presented below. Identify which accounts are to be on the debit and credit side. Write an analysis of the transaction to explain why the accounts are debited and credited. The first item is answered for you as an example.

48. Example: TRANSACTIONS DEBIT (₱) CREDIT (₱) Analysis Example: Sienna invested ₱10,000 cash in her business Cash 10,000 Capital 10,000 Increase in Cash = Debit, Increase in Capital = Credit

49. Good Luck!