Professional Documents
Culture Documents
Accounting System
Accounting System
Learning Objectives
Accounting Information
The Accounting Cycle
System
Event Journal
Transaction Posting
Account Trial Balance
Real Account Adjusting Entries
Nominal Account Financial Statements
Ledger Closing Entries
Debits and Credits
Account Name
Debit / Dr. Credit / Cr.
Balance Rs 15,000
Debits and Credits
Account Name
Debit / Dr. Credit / Cr.
Balance Rs 1,000
Debits and Credits Summary
Liabilities
Debit / Dr. Credit / Cr.
Normal Normal
Balance Balance
Debit Credit Normal Balance
Assets Chapter
3-24
Equity
Debit / Dr. Credit / Cr.
Debit / Dr. Credit / Cr.
Normal Balance
Normal Balance
Chapter
3-23
Expense Chapter
3-25
Revenue
Debit / Dr. Credit / Cr.
Debit / Dr. Credit / Cr.
Normal Balance
Normal Balance
Chapter
3-27 Chapter
3-26
Debit
Credit
Stockholders’
= +
Assets Liabilities Equity
+ 32,000 + 46,000
+ 14,000
Double-Entry System Exercise
Stockholders’
= +
Assets Liabilities Equity
- 600 - 600
(expense)
Double-Entry System Exercise
Stockholders’
= +
Assets Liabilities Equity
+ 3,200 + 3,200
Double-Entry System Exercise
Stockholders’
= +
Assets Liabilities Equity
+ 2,300 + 2,300
(revenue)
Double-Entry System Exercise
Stockholders’
= +
Assets Liabilities Equity
+ 6,100
- 6,100
Double-Entry System Exercise
Stockholders’
= +
Assets Liabilities Equity
- 7,000 - 7,000
Double-Entry System Exercise
Stockholders’
= +
Assets Liabilities Equity
+ 10,000 - 10,000
Proprietorship
or Corporation
Partnership
Work
6. Financial Statements Sheet
4. Adjustments
What to Record?
“transactions and other events and
circumstances that affect a business enterprise.”
Types of Events:
External – between a business and its environment.
Internal – event occurring entirely within a business.
Review “Transactions and Events”
External Internal Not Recorded
General Journal
Date Account Title Ref. Debit Credit
Jan. 3 Cash 100 100,000
Common stock 300 100,000
General Ledger
Cash Acct. No. 100
Date Explanation Ref. Debit Credit Balance
Jan. 3 Sale of stock GJ1 100,000 100,000
3. Trial Balance
Trial Balance – a list of each account and its balance;
used to prove equality of debit and credit balances.
Prepayments Accruals
11,000
Adjusting Entries – “Unearned Revenues”
16,000
Adjusting Entries – “Accrued Revenues”
Revenues earned but not yet received in cash or
recorded.
Investments Cash
Debit Credit Debit Credit
300,000 300,000
Adjusting Entries – “Accrued Revenues”
Example: On July 1st, Phoenix Corp. invested Rs 300,000 in
securities that return 5% interest per year. Show the
adjusting journal entry required on July 31st.
Statement of
Income Statement of
Balance Sheet Retained
Statement Cash Flows
Earnings