Unit VI Part 1 General Journal, General Ledger, Trial Balance

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  Unit VI – Part 1General Journal, General Ledger, Trial Balance Overview Background The work for each accounting period follows a cycle, which is called the accounting cycle . This refers to a series of sequential steps or procedures  performed to accomplish the accounting process.1.Journalizing2.Posting to the General edger !.Trial alance Preparation#.$orksheet Preparation%.&d'usting the ooks(.Preparing )inancial *tatements+.losing the ooks-.Preparing Post losing Trial alance./e0ersing ntries  Purpose The purpose of nit 345Part 1 6 General Journal, General Ledger, Trial  Balance”   is to introduce the student on the use of a general 'ournal, general ledger and the preparation of the trial 7alance.  In this unit This unit contains the following topics8 TopicsSee Page Journalizing 9*tep 1:2  of ; Journal /ules#  of ; Journal ntries(  of ; The General edger  of ; The hart of &ccounts11  of ; Posting to the General edger 9*tep 2:1!  of ; alancing &ccounts1(  of ; Trial alance1+  of ; imitations of the Trial alance1  of ;   Marivic D. Valenzuela-Manalo Page 1of ;  Journalizing (Ste 1!   Overview ookkeeping is the systematic and chronological recording of transactions in  7ooks of accounts following a series of steps and procedures commonly referred to as the accounting cycle. This 7ookkeeping procedure 7egins with  'ournalizing which is the first part of this unit.  Journal &ccounting is 7ased on dou7le5entry 7ookkeeping, which means that accountants record the dual effects of a business transaction . The 7asic recording procedure in accounting in0ol0es a de0ice called a  journal  . &  'ournal is a daily record of 7usiness transactions that shows in one place the complete debit and credit effect of each transaction on the accounts of the business in chronological order  . The general 'ournal is also known as the book of srcinal entries .   Journalizing The chronological recording of the 7usiness transactions in the 7ook of srcinal entry.  Illustration elow is an e<ample of a typical 'ournal. JOURNAL PAGEDateP A R T I C U L A R SP/RDEBITCREDIT   Continued on next page Marivic D. Valenzuela-Manalo Page 2of ;  Journalizing (Step 1), Continued   Legend The definitions 7elow illustrate the legend8 ã  Date , is used to show the day of the month on which each transaction takes place. ã  Particulars  column or sometimes called the  Account Titles and  Explanation  column, is used to show e0ery account title affected 7y each transaction and to gi0e some e<planation or 'ustification of the de7its and credits 7eing made to the accounts. ã  P/R (Posting Reference)  column is important 7ecause it indicates the num7ers of the accounts in the ledger to which the de7its and credits recorded in the 'ournal ha0e 7een transferred. 4n manual systems, these account num7ers are inserted at the proper   time in the P=/ column of the  'ournal. ã  Debit and credit   columns indicate the amounts to 7e de7ited or credited to the account titles written in the particulars column.  Marivic D. Valenzuela-Manalo Page !of ;  Journal ule#   Overview The following guidelines will 7e useful when recording transactions in a general 'ournal.  Journal Rules The recording process follows these fi0e steps8 ã 1. Transactions are first analyzed, identifying the transaction from 7usiness source documents, e.g., official receipts, cash 0ouchers, etc. &ll transactions recorded in 'ournals must 7e 7ased upon some objectie erifiable eidence .  !usiness documents  are formal written records that  pro0ide information to e0eryone with an understanding of accounting to measure the amount of the transaction and to analyze it in the same way. The data used for the 'ournal entry are 0erifia7le if it is possi7le to trace the transaction to its point of srcin. ã 2. The day on which the transaction took place is written in the ;ate column. ã !. The account titles affected 7y the transactions are put into the  particulars column. 4t is an accepted practice to list first in each transaction the account title=s 7eing de7ited, followed 7y the account title=s  7eing credited. The de7ited account titles are written against the left margin of the particulars column. The accounts 7eing credited are indented from the left margin of the particulars column. 4f any single transaction requires se0eral de7its and credits, all account titles recei0ing the de7its will 7e listed first, followed 7y the indented account titles recei0ing the credits. &t the same time each account title is written in the  'ournal, the peso amount is inserted in the appropriate ;e7it or redit column. )or each 'ournal entry, the total de7its must equal the total credits. Continued on next page Marivic D. Valenzuela-Manalo Page #of ;
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