JOURNALIZING

ACCOUNTING
TRANSACTIONS
By: Amy Hur
Paoi Lorenzo
 Motivation

https://m.youtube.com/watch?v=llqW8k38q2Q
 Objectives

Dierentiate Assets, Liabilities, Equity, Revenue, and

Expenses

Identify the Accounting Formula

Categorize the Chart of Accounts

Compare Debit and Credit

Classify dierent transactions

Presentation
 What is Accounting?
It is a systematic process of
identifying, recording,
measuring, classifying,
verifying, summarizing,
interpreting and
communicating financial
information.

It reveals profit or loss for a

given period, and the value and
nature of a firm's assets,
liabilities and owners' equity.
Accounting Formula
 Journalising Transactions
Source documents are the basis for recording
transactions in a chronological order in a journal.

Each company has what is called the general journal or

the book of original entry:

General journal (book of original entry) contains records

about all transactions of an entity. In particular, the
journal includes such data as the event date, accounts
involved, explanations and amount(s).
 Account Types
Assets are cash, properties, or things of values owned by the business.

Liabilities are amounts the business owes to creditors.

Owners equity is the owners investment or net worth.

Revenue is shown usually as the top item in an income (profit and

loss) statement from which all charges, costs, and expenses are
subtracted to arrive at net income.

Expenses are the cost required for something; the money spent from
business
 Debit and Credit
A debit is an accounting entry that either increases an
asset or expense account, or decreases a liability or equity
account.

A credit is an accounting entry that either increases a

liability or equity account, or decreases an asset or
expense account.
 Chart of Accounts

The Chart of Accounts is a listing of all accounts

used in the general ledger of an organization.
Accounts are usually listed in order of their
appearance in the financial statements, starting
with the balance sheet and continuing with the
income statement. Typical accounts found in the
chart of accounts are:
Chart of Accounts
Normal Balance
When the
Account type
increases,
input its
normal
balance when
it decreases,
input the
other one.
Practice!
Transaction #1: On December 1, 2016, Mr. Donald Gray
started Gray Electronic Repair Services by investing
$10,000. The journal entry should increase the
company's Cash, and increase (establish) the capital
account of Mr. Gray; hence:
Cash are Assets. their normal
Balance is Debit. Input debit
because it increased.
Answer:

Capitals are equity. It's normal

balance is Credit.input credit
because it increased
 Transaction #2: On December 5, Gray Electronic Repair
Services paid registration and licensing fees for the business,
$370.

Taxes and Licences are payables and

they are liabilities. The normal
balance for liabilities are credit.
Answer: Since your payables decreased ( you
paid them) , input the value in the
debit side.

Cash are assets. Their normal

balance is debit. Since your cash
decreased( you used it to play
taxes) input the value in the
credit side.
Transaction #3: On December 6, the company acquired
tables, chairs, shelves, and other fixtures for a total of
$3,000. The entire amount was paid in cash.
Furnitures and Fixtures are assets.
Its normal balance is debit. Since
your assets increased ( you bought
Answer: them) input the value in the debit
side.

Cash are assets. Its normal

balance is debit. Since your cash
decreased( you used it to
purchase furnitures), input the
value in the credit side.
 Transaction #4: On December 7, the company acquired
service equipment for $16,000. The company paid a 50%
down payment and the balance will be paid after 60 days.
Service Equipment are assets. Its
normal balance is debit. Since your
Answer: assets increased ( you bought
them) input the value in the debit
side.

Since you didn't pay the 50%, the

Cash are assets. Its normal
balance is debit. Since your cash
decreased( you used it to
purchase survive equipment ),
input the value in the credit side.
other 8000 will be added to your
accounts payable. accounts payable
are liabilities. Their normal balance
is Credit. Since your accounts
payable increased, input the value in
the credit side
 Synthesis
What is accounting? Why is it important?
What is the dierence between assets, liabilities,
equity and revenue ?
What is the dierence between Debit and Credit?
What is the purpose of a normal Balance in
Recording Transactions? ?
 Evaluation
Click on the link below to answer the evaluation test

https://www.classmarker.com/online-test/start/?
quiz=mjd59b39737dede9