SlideShare a Scribd company logo

Ch05_WRD25e_Instructor.pptCh05_WRD25e_Instructor.ppt

Download as PPT, PDF
R
rinaasmaraasmara

This document provides an overview of accounting systems, particularly focusing on manual and computerized methods for recording financial transactions. It outlines key concepts such as subsidiary ledgers, special journals, and the processes involved in journalizing and posting financial information. Key learning objectives include understanding accounting systems, their internal controls, and the evaluation of operating performance through segment analysis.

Education
1 of 85
Download to read offline
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Accounting Accounting Systems Systems Chapter 5 Chapter 5
Learning Objectives Learning Objectives 1. 1. Define and describe an accounting system. Define and describe an accounting system. 2. 2. Journalize and post transactions in a manual Journalize and post transactions in a manual accounting system that uses subsidiary accounting system that uses subsidiary ledgers and special journals. ledgers and special journals. 3. 3. Describe and illustrate the use of a Describe and illustrate the use of a computerized accounting system. computerized accounting system. 4. 4. Describe the basic features of e-commerce. Describe the basic features of e-commerce. 5. 5. Use segment analysis in evaluating the Use segment analysis in evaluating the operating performance of a company. operating performance of a company.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Define and describe an accounting Define and describe an accounting system. system. 1 1
Basic Accounting Systems Basic Accounting Systems o An An accounting system accounting system is the methods and is the methods and procedures for collecting, classifying, procedures for collecting, classifying, summarizing, and reporting a business’s summarizing, and reporting a business’s financial and operating information. financial and operating information.
BASIC ACCOUNTING SYSTEMS BASIC ACCOUNTING SYSTEMS As a business grows As a business grows and changes, and changes, accounting systems accounting systems also change in the also change in the following three-step following three-step process. process.  Analyze user Analyze user information needs. information needs.  Design the system to Design the system to meet the user needs. meet the user needs.  Implement the Implement the system. system.
BASIC BASIC ACCOUNTING ACCOUNTING SYSTEMS SYSTEMS
Basic Accounting Systems Basic Accounting Systems o Internal controls Internal controls are the policies and are the policies and procedures that protect assets from misuse, procedures that protect assets from misuse, ensure that business information is accurate, ensure that business information is accurate, and ensure that laws and regulations are being and ensure that laws and regulations are being followed. followed.
Processing Methods Processing Methods o Processing methods Processing methods are the means by which are the means by which the accounting system collects, summarizes, the accounting system collects, summarizes, and reports accounting information.These and reports accounting information.These methods may be either methods may be either manual manual or or computerized computerized. .
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Journalize and post transactions in a Journalize and post transactions in a manual accounting system that uses manual accounting system that uses subsidiary ledgers and special subsidiary ledgers and special journals. journals. 2 2
Manual Accounting Systems Manual Accounting Systems o Understanding a manual accounting system is Understanding a manual accounting system is useful in identifying relationships between useful in identifying relationships between accounting data and reports. accounting data and reports.
Subsidiary Ledgers Subsidiary Ledgers o A large number of individual accounts with a A large number of individual accounts with a common characteristic can be grouped common characteristic can be grouped together in a separate ledger called a together in a separate ledger called a subsidiary ledger subsidiary ledger. .
Subsidiary Ledgers Subsidiary Ledgers o The primary ledger, which contains all of the The primary ledger, which contains all of the balance sheet and income statement accounts, balance sheet and income statement accounts, is called a is called a general ledger general ledger. .
Subsidiary Ledgers Subsidiary Ledgers o Each subsidiary ledger is represented in the Each subsidiary ledger is represented in the general ledger by a summarizing account, general ledger by a summarizing account, called a called a controlling account controlling account. .
Subsidiary Ledgers Subsidiary Ledgers o The individual customer accounts are The individual customer accounts are arranged in alphabetical order in a subsidiary arranged in alphabetical order in a subsidiary ledger called the ledger called the accounts receivable accounts receivable subsidiary ledger subsidiary ledger, , or or customers ledger customers ledger. .
Subsidiary Ledgers Subsidiary Ledgers o The individual creditor accounts are arranged The individual creditor accounts are arranged in alphabetical order in a subsidiary ledger in alphabetical order in a subsidiary ledger called the called the accounts payable subsidiary ledger accounts payable subsidiary ledger, , or or creditors creditors ledger ledger. .
SUBSIDIARY SUBSIDIARY LEDGERS LEDGERS
Special Journal Special Journal o One method of processing transactions more One method of processing transactions more efficiently in a manual system is to use special efficiently in a manual system is to use special journals. journals. Special journals Special journals are designed to be are designed to be used for recording a single kind of transaction used for recording a single kind of transaction that occurs frequently. that occurs frequently.
SPECIAL SPECIAL JOURNALS JOURNALS BUYING SELLING
Special Journals Special Journals o The all-purpose two-column journal, called the The all-purpose two-column journal, called the general journal general journal or simply the or simply the journal, journal, can be can be used for entries that do not fit into any of the used for entries that do not fit into any of the special journals. special journals.
Special Journals Special Journals o The The revenue journal revenue journal is used for recording fees is used for recording fees earned on account. earned on account.
Special Journals Special Journals o Cash fees earned would be recorded in the Cash fees earned would be recorded in the cash receipts journal cash receipts journal. .
Special Journals Special Journals o Purchases made on account (on credit) are Purchases made on account (on credit) are recorded in the recorded in the purchases journal purchases journal. .
Special Journals Special Journals o All cash payments are recorded in the All cash payments are recorded in the cash cash payments journal payments journal. .
Special Journals Special Journals o NetSolutions had the following selected NetSolutions had the following selected general ledger balances as of March 1, 2014: general ledger balances as of March 1, 2014: Account Number Account Balance 11 Cash $6,200 12 Accounts Receivable 3,400 14 Supplies 2,500 18 Office Equipment 2,500 21 Accounts Payable 1,230
Revenue Journal Revenue Journal o If NetSolutions recorded its revenue If NetSolutions recorded its revenue transactions in the general journal, the transactions in the general journal, the following entries would have to be made: following entries would have to be made:
Revenue Journal Revenue Journal o Revenues are normally recorded to the Revenues are normally recorded to the revenue journal when the company sends a revenue journal when the company sends a bill, referred to as an bill, referred to as an invoice invoice, to the customer. , to the customer. o Each invoice is normally numbered in Each invoice is normally numbered in sequence for future reference. sequence for future reference.
REVENUE REVENUE JOURNAL JOURNAL If NetSolutions journalized these same fees earned on account entries in the revenue journal, the process is simplified, as you can see in Exhibit 2.
Ch05_WRD25e_Instructor.pptCh05_WRD25e_Instructor.ppt
Revenue Journal Revenue Journal o Let’s take a step-by-step look at the process Let’s take a step-by-step look at the process used to post the first entry. This entry was used to post the first entry. This entry was made on March 2, 2014, when NetSolutions made on March 2, 2014, when NetSolutions issued Invoice No. 615 to Accessories By Claire issued Invoice No. 615 to Accessories By Claire for fees earned of $2,200. for fees earned of $2,200.
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Click here to skip “Exhibit 3 (in Steps)” (continued) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) 1 2 3 4 5 6 1 2 3 4 5 6 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 (continued) Date Item P.R. Debit Credit Balance Mar. 2 R35 2,200 2,200 2014 Accounts Receivable Subsidiary Ledger Accessories By Claire Revenue Journal Page 35 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 Mar. 2 615 Accessories By Claire 2 2 0 0 00 (continued) 2014 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 Date Item P.R. Debit Credit Balance Mar. 2 R35 2,200 2,200 2014 Accounts Receivable Subsidiary Ledger Accessories By Claire
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 (continued) 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 The same procedure would be used to post the other transactions to the individual accounts in the accounts receivable subsidiary ledger.
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Revenue Journal Page 35 1 2 3 4 5 6 1 2 3 4 5 6 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 (continued) 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Next, the amount column would be totaled. 9 6 0 0 00 31
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) ACCOUNT Accounts Receivable Account No. 12 Balance Dr. Cr. Date Dr. Cr. Item Post. Ref. 2014 Mar. 1 Balance 3 400 00 31 9 600 00 13 000 00 R35 The debit total is posted from the revenue journal to Accounts Receivable in the general ledger. Revenue Journal, page 35 (continued)
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 (12) Indicates a debit posting of $9,600 to Accounts Receivable (General Ledger Account 12) 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 31 9 6 0 0 00 (continued)
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) ACCOUNT Fees Earned Account No. 41 Balance Date Dr. Cr. Item Post. Ref. 9 600 00 R35 The credit total is posted from the revenue journal to Fees Earned in the general ledger. 9 600 00 Dr. Cr. (continued) Revenue Journal, page 35 Mar. 31 2014
EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Indicates a credit posting of $9,600 to Fees Earned (General Ledger Account 41) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 (12) 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 31 9 6 0 0 00 (41)
Cash Receipts Journal Cash Receipts Journal o All transactions that involve the receipt of cash All transactions that involve the receipt of cash are recorded in a are recorded in a cash receipts cash receipts journal journal. Every . Every entry recorded in the cash receipts journal will entry recorded in the cash receipts journal will involve a debit to the “Cash Dr.” column. involve a debit to the “Cash Dr.” column.
Ch05_WRD25e_Instructor.pptCh05_WRD25e_Instructor.ppt
EXHIBIT 4 EXHIBIT 4 (IN STEPS) (IN STEPS) Mar. 1 Rent Revenue 400 400 CASH RECEIPTS JOURNAL Other Accounts Post Accounts Receivable Cash Date Account Credited Ref. Cr. Cr. Dr. Page 14 2014 19 Web Cantina 3,400 3,400 28 Accessories By Claire 2,200 2,200 30 RapZone 1,750 1,750 Date Item P.R. Debit Credit Cr. Bal. ACCOUNT Rent Revenue Acct. No. 42 GENERAL LEDGER 42 CR14 Click the button to skip “Exhibit 4 (in Steps)” Mar. 1 2014 400 (continued) 400
EXHIBIT 4 EXHIBIT 4 (IN STEPS) (IN STEPS) Date Item P.R. Debit Credit Balance Web Cantina Mar. 1 Bal. 3,400 18 R35 2,650 6,050 2014 3,400 2,650 19 Mar. 1 Rent Revenue 400 400 CASH RECEIPTS JOURNAL Other Accounts Post Accounts Receivable Cash Date Account Credited Ref. Cr. Cr. Dr. Page 14 2014 19 Web Cantina 3,400 3,400 28 Accessories By Claire 2,200 2,200 30 RapZone 1,750 1,750 Accounts Receivable Subsidiary Ledger CR14 (continued) 42
Cash Receipts Journal Cash Receipts Journal o After all journalizing and posting to individual After all journalizing and posting to individual accounts for the month is complete, the accounts for the month is complete, the columns are totaled. columns are totaled.
EXHIBIT 4 EXHIBIT 4 (IN STEPS) (IN STEPS) Mar. 1 Rent Revenue 400 400 CASH RECEIPTS JOURNAL Other Accounts Post Accounts Receivable Cash Date Account Credited Ref. Cr. Cr. Dr. Page 14 2014 19 Web Cantina 3,400 3,400 28 Accessories By Claire 2,200 2,200 30 RapZone 1,750 1,750 42 400 7,350 7,750 ( ) ( ) ( ) A check mark indicates that items in this column are posted individually. 12 11 (continued) 31
Accounts Receivable Account Accounts Receivable Account o The total of the accounts in the accounts The total of the accounts in the accounts receivable subsidiary ledger should match the receivable subsidiary ledger should match the balance in the general ledger’s Accounts balance in the general ledger’s Accounts Receivable account. Receivable account.
Purchases Journal Purchases Journal o The The purchases journal purchases journal is designed for is designed for recording all recording all purchases on account purchases on account. .
Ch05_WRD25e_Instructor.pptCh05_WRD25e_Instructor.ppt
EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL Page 11 2014 Mar. 3 Howard Supplies 600 600 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 Click on button to skip “Exhibit 5 (in steps)” (continued)
EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) PURCHASES JOURNAL Page 11 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 Note that the March 12 purchase of office equipment for $2,800 is recorded as a debit in the “Other Accounts Dr.” column. Also note that the account title is written in for proper posting. (continued) Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL 2014 Mar. 3 Howard Supplies 600 600
EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) PURCHASES JOURNAL Page 11 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL 2014 Mar. 3 Howard Supplies 600 600 Date Item P.R. Dr. Cr. Balance 2014 P11 (continued) Accounts Payable Subsidiary Ledger Howard Supplies 600 Mar. 3 600
EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) PURCHASES JOURNAL Page 11 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL 2014 Mar. 3 Howard Supplies 600 600 (continued) The other entries to the accounts payable subsidiary ledger are recorded using the same procedure.
EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) PURCHASES JOURNAL Page 11 2014 Mar. 3 Howard Supplies 600 600 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 This posting reference indicates that Office Equipment (Account 18) is debited in the general ledger for $2,800. Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount 18
Purchases Journal Purchases Journal o At the end of March, all columns are totaled At the end of March, all columns are totaled and the equality of debits and credits is and the equality of debits and credits is verified.Then the total amounts in the verified.Then the total amounts in the “Accounts Payable Cr.” and “Supplies Dr.” “Accounts Payable Cr.” and “Supplies Dr.” columns are posted. Because Office Equipment columns are posted. Because Office Equipment was posted earlier, the $2,800 total is not was posted earlier, the $2,800 total is not posted. posted.
EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 18 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 31 6,230 3,430 2,800 ( ) ( ) ( ) Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL Page 11 2014 Mar. 3 Howard Supplies 600 600 21 ACCOUNT Accounts Payable No. 21 GENERAL LEDGER Date Item P.R. Debit Credit Balance Mar. 1 Bal 1,230 6,230 7,460 31 P11 2014 Supplies would be debited for $3,430 and 14 written in the parentheses.
Cash Payments Journal Cash Payments Journal o All transactions involving a credit to All transactions involving a credit to Cash Cash are are recorded in the recorded in the cash payments journal cash payments journal. .
Ch05_WRD25e_Instructor.pptCh05_WRD25e_Instructor.ppt
EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 On March 2, 2014, issued Check 150 for rent of $1,600. Click button to skip “Exhibit 6 (in steps)” (continued)
Cash Payments Journal Cash Payments Journal o The amounts listed in the “Other Accounts Dr.” The amounts listed in the “Other Accounts Dr.” column are posted on a regular basis.The column are posted on a regular basis.The $1,600 for Rent Expense is posted to Account $1,600 for Rent Expense is posted to Account No. 52. No. 52.
EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 General Ledger Account Rent Expense 1,600 1,600 Date Item P.R. Dr. Cr. Balance Account No. 52 52 (continued) 2014 Mar. 2 CP7
EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) 15 151 Grayco Supplies 1,230 1,230 CASH PAYMENTS JOURNAL PAGE 7 Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr 2014 Mar. 2 150 Rent Expense 1,600 1,600 On March 15, issued Check 151 to Grayco Supplies for $1,230. 52 (continued)
Cash Payments Journal Cash Payments Journal o Let’s post to the accounts payable subsidiary Let’s post to the accounts payable subsidiary ledger at this time to keep the creditors’ ledger at this time to keep the creditors’ accounts current. accounts current.
EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230  52 Accounts Payable Subsidiary Ledger Grayco Supplies Mar. 1 Bal. 1,230 Date Item P.R. Dr. Cr. Balance 1,230 --- 15 CP7 2014 (continued)
Cash Payments Journal Cash Payments Journal o Now, let’s journalize the remainder of March’s Now, let’s journalize the remainder of March’s cash disbursements. Following that, let’s post to cash disbursements. Following that, let’s post to the individual creditors’ accounts. the individual creditors’ accounts.
EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230  21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 52 (continued)
EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230  52    54 21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 (continued) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr
Cash Payments Journal Cash Payments Journal o The journal is ruled, summed, and verified for The journal is ruled, summed, and verified for the equality of the debits and the “Cash Cr.” the equality of the debits and the “Cash Cr.” column. column.
CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2008 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230 21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230 31 2,650 5,050 7,700 52    54  21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 (continued) CASH PAYMENTS CASH PAYMENTS JOURNAL JOURNAL
CASH PAYMENTS CASH PAYMENTS JOURNAL JOURNAL CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2008 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230 21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230 21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 31 2,650 5,050 7,700 52    54  (21) (11) ( )   The totals for “Accounts Payable Dr.” and “Cash Cr.” are posted. (continued)
Accounts Payable Account Accounts Payable Account o After all posting has been completed, the After all posting has been completed, the balances in the accounts payable subsidiary balances in the accounts payable subsidiary ledger should equal the balance of the ledger should equal the balance of the accounts payable controlling account in the accounts payable controlling account in the general ledger. general ledger.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Describe and illustrate the use of a Describe and illustrate the use of a computerized accounting system. computerized accounting system. 3 3
Computerized Accounting System Computerized Accounting System o Computerized accounting systems have the Computerized accounting systems have the following three main advantages over manual following three main advantages over manual systems: systems:  Computerized systems simplify the record-keeping Computerized systems simplify the record-keeping process by recording transactions in electronic process by recording transactions in electronic forms and, at the same time, posting them forms and, at the same time, posting them electronically to general and subsidiary ledger electronically to general and subsidiary ledger accounts. accounts.
Computerized Accounting System Computerized Accounting System  Computerized systems are generally more accurate Computerized systems are generally more accurate than manual systems. than manual systems.  Computerized systems provide management with Computerized systems provide management with current account balance information to support current account balance information to support decision making, since account balances are posted decision making, since account balances are posted as the transactions occur. as the transactions occur.
COMPUTERIZED COMPUTERIZED ACCOUNTING ACCOUNTING SYSTEMS SYSTEMS (continued)
COMPUTERIZED COMPUTERIZED ACCOUNTING ACCOUNTING SYSTEMS SYSTEMS (continued)
COMPUTERIZED COMPUTERIZED ACCOUNTING ACCOUNTING SYSTEMS SYSTEMS (concluded)
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Describe the basic features of e- Describe the basic features of e- commerce. commerce. 4 4
E-Commerce E-Commerce o Using the Internet to perform business Using the Internet to perform business transactions is termed transactions is termed e-commerce e-commerce. .
E-Commerce E-Commerce o When transactions are between a company When transactions are between a company and a consumer, it is termed and a consumer, it is termed B2C B2C (business-to- (business-to- consumer) consumer) e-commerce e-commerce. .
E-COMMERCE E-COMMERCE Three more advanced Three more advanced areas where the areas where the Internet is being used Internet is being used for business purposes for business purposes are: are:  Supply chain Supply chain management (SCM) management (SCM)  Customer relationship Customer relationship management (CRM) management (CRM)  Product life-cycle Product life-cycle management (PLM) management (PLM)
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Use segment analysis in evaluating Use segment analysis in evaluating the operating performance of a the operating performance of a company. company. 5 5
Segment Analysis Segment Analysis o One way to report revenue is by different One way to report revenue is by different segments. Businesses may be segmented by segments. Businesses may be segmented by region, by product or service, or by type of region, by product or service, or by type of customer. customer.
SEGMENT SEGMENT ANALYSIS ANALYSIS
USING SEGMENT INFORMATION USING SEGMENT INFORMATION TO PERFORM TO PERFORM HORIZONTAL ANALYSIS HORIZONTAL ANALYSIS
USING SEGMENT INFORMATION USING SEGMENT INFORMATION TO PERFORM TO PERFORM VERTICAL ANALYSIS VERTICAL ANALYSIS
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Accounting Accounting Systems Systems The End The End

More Related Content

PPT
Ch05 Fill ins
cwood
 
PPT
Ppt ch 02
Joyce Effinger
 
PPTX
Principal accounting - Ch05 accounting system and internal control
Arfan Fahmi
 
PPTX
UNIT- 2 PPT.pptx Accounting and finance.
bgmi18shivam
 
PDF
Accounts 4.pdf
MateenYousuf4
 
PDF
Accounts 4.pdf
MateenYousuf4
 
PPT
Acc6ch07.ders
alper
 
PPTX
BOOKKEEPING entrep12 module_LAst wk.pptx
VanessaTaberlo
 
Ch05 Fill ins
cwood
 
Ppt ch 02
Joyce Effinger
 
Principal accounting - Ch05 accounting system and internal control
Arfan Fahmi
 
UNIT- 2 PPT.pptx Accounting and finance.
bgmi18shivam
 
Accounts 4.pdf
MateenYousuf4
 
Accounts 4.pdf
MateenYousuf4
 
Acc6ch07.ders
alper
 
BOOKKEEPING entrep12 module_LAst wk.pptx
VanessaTaberlo
 

Similar to Ch05_WRD25e_Instructor.pptCh05_WRD25e_Instructor.ppt (20)

PDF
Guideto bookkeeping concepts
Shafiul Islam
 
PPTX
Journal Entries ...........pptx
Vikash Barnwal
 
PPTX
Administer Financial Accounts of Business PPT
Dano54
 
PPTX
FABM1 - Lesson 7 - The Two Books of Accounting.pptx
SheilaMarieAnnMagcal2
 
PPSX
New accountingbasicspart1
David Marshall
 
PPT
2.JOURNAL.ppt
AcacollegeforCMA
 
PDF
Icai accounting basics
ashutoshs916
 
PPT
Ch02_WRD25e_Instructor.pptCh02_WRD25e_Instructor.ppt
rinaasmaraasmara
 
PPT
Ch02 wrd12e instructor_final
fsuttonnnu
 
PPT
Chapter 2 Financial Accounting
fsuttonnnu
 
PPTX
Fundamentals of Accountancy, Business & Mgt. 1- Lesson 1
Lourdes Eyo
 
PPTX
Books of accounts
Charlize Marie
 
PPTX
accounting information system
hemlata malik
 
PDF
Accounting basics study_material_0
Abdul Hasan
 
PDF
Accounting basics study_material_0
Abdul Hasan
 
PPTX
Journal entries
Vikash Barnwal
 
PPT
44894768-FMA-PPT-3-Accounting-Cycle-Journal-Entries.ppt
RodolfoCorpuz
 
PPTX
2. Chap 2 (2).pptxerfrtgghfdefrrgcfdeerg
bobshimels
 
PPT
Ch2
Cyndi Vandenbark
 
PPTX
Accounting Process & Procedure
Dr. Sushil Bansode
 
Guideto bookkeeping concepts
Shafiul Islam
 
Journal Entries ...........pptx
Vikash Barnwal
 
Administer Financial Accounts of Business PPT
Dano54
 
FABM1 - Lesson 7 - The Two Books of Accounting.pptx
SheilaMarieAnnMagcal2
 
New accountingbasicspart1
David Marshall
 
2.JOURNAL.ppt
AcacollegeforCMA
 
Icai accounting basics
ashutoshs916
 
Ch02_WRD25e_Instructor.pptCh02_WRD25e_Instructor.ppt
rinaasmaraasmara
 
Ch02 wrd12e instructor_final
fsuttonnnu
 
Chapter 2 Financial Accounting
fsuttonnnu
 
Fundamentals of Accountancy, Business & Mgt. 1- Lesson 1
Lourdes Eyo
 
Books of accounts
Charlize Marie
 
accounting information system
hemlata malik
 
Accounting basics study_material_0
Abdul Hasan
 
Accounting basics study_material_0
Abdul Hasan
 
Journal entries
Vikash Barnwal
 
44894768-FMA-PPT-3-Accounting-Cycle-Journal-Entries.ppt
RodolfoCorpuz
 
2. Chap 2 (2).pptxerfrtgghfdefrrgcfdeerg
bobshimels
 
Ch2
Cyndi Vandenbark
 
Accounting Process & Procedure
Dr. Sushil Bansode
 
Ad

Recently uploaded (20)

PPTX
Institutional Correction lecture only . . .
limvtheghins
 
PPTX
Lesson notes of climatology university.
sgladness67
 
PDF
Black Hat USA 2025 - Micro ICS Summit - ICS/OT Threat Landscape
Chris Sistrunk
 
PDF
Classroom Observation Tools for Teachers
Nicaramirez
 
PPTX
master seminar digital applications in india
ananyaray35
 
PDF
RMMM.pdf make it easy to upload and study
sajedul2
 
PDF
grade 11-chemistry_fetena_net_5883.pdf teacher guide for all student
banteamlakmebratu738
 
PDF
A systematic review of self-coping strategies used by university students to ...
CleeveMoralde1
 
PDF
Chapter 2 Heredity, Prenatal Development, and Birth.pdf
MarjorieLopezTiu
 
PDF
ANTIBIOTICS.pptx.pdf………………… xxxxxxxxxxxxx
HakHe
 
PDF
The Lost Whites of Pakistan by Jahanzaib Mughal.pdf
jahanzaibmughal6
 
PPTX
PPT- ENG7_QUARTER1_LESSON1_WEEK1. IMAGERY -DESCRIPTIONS pptx.pptx
KMDee
 
PDF
O7-L3 Supply Chain Operations - ICLT Program
labyankof
 
PDF
GENETICS IN BIOLOGY IN SECONDARY LEVEL FORM 3
ElishamichaelSamwel
 
PPTX
Cell Types and Its function , kingdom of life
ClaireMangundayao1
 
PPTX
school management -TNTEU- B.Ed., Semester II Unit 1.pptx
NihumathunnisaH
 
PPTX
Pharmacology of Heart Failure /Pharmacotherapy of CHF
Rajshri Ghogare
 
PDF
FourierSeries-QuestionsWithAnswers(Part-A).pdf
Raji Murugan
 
PPTX
Cell Structure & Organelles in detailed.
DHANASHREESIVAKUMAR
 
PDF
Abdominal Access Techniques with Prof. Dr. R K Mishra
mohitsuren827
 
Institutional Correction lecture only . . .
limvtheghins
 
Lesson notes of climatology university.
sgladness67
 
Black Hat USA 2025 - Micro ICS Summit - ICS/OT Threat Landscape
Chris Sistrunk
 
Classroom Observation Tools for Teachers
Nicaramirez
 
master seminar digital applications in india
ananyaray35
 
RMMM.pdf make it easy to upload and study
sajedul2
 
grade 11-chemistry_fetena_net_5883.pdf teacher guide for all student
banteamlakmebratu738
 
A systematic review of self-coping strategies used by university students to ...
CleeveMoralde1
 
Chapter 2 Heredity, Prenatal Development, and Birth.pdf
MarjorieLopezTiu
 
ANTIBIOTICS.pptx.pdf………………… xxxxxxxxxxxxx
HakHe
 
The Lost Whites of Pakistan by Jahanzaib Mughal.pdf
jahanzaibmughal6
 
PPT- ENG7_QUARTER1_LESSON1_WEEK1. IMAGERY -DESCRIPTIONS pptx.pptx
KMDee
 
O7-L3 Supply Chain Operations - ICLT Program
labyankof
 
GENETICS IN BIOLOGY IN SECONDARY LEVEL FORM 3
ElishamichaelSamwel
 
Cell Types and Its function , kingdom of life
ClaireMangundayao1
 
school management -TNTEU- B.Ed., Semester II Unit 1.pptx
NihumathunnisaH
 
Pharmacology of Heart Failure /Pharmacotherapy of CHF
Rajshri Ghogare
 
FourierSeries-QuestionsWithAnswers(Part-A).pdf
Raji Murugan
 
Cell Structure & Organelles in detailed.
DHANASHREESIVAKUMAR
 
Abdominal Access Techniques with Prof. Dr. R K Mishra
mohitsuren827
 
Ad

Ch05_WRD25e_Instructor.pptCh05_WRD25e_Instructor.ppt

  • 1. c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Accounting Accounting Systems Systems Chapter 5 Chapter 5
  • 2. Learning Objectives Learning Objectives 1. 1. Define and describe an accounting system. Define and describe an accounting system. 2. 2. Journalize and post transactions in a manual Journalize and post transactions in a manual accounting system that uses subsidiary accounting system that uses subsidiary ledgers and special journals. ledgers and special journals. 3. 3. Describe and illustrate the use of a Describe and illustrate the use of a computerized accounting system. computerized accounting system. 4. 4. Describe the basic features of e-commerce. Describe the basic features of e-commerce. 5. 5. Use segment analysis in evaluating the Use segment analysis in evaluating the operating performance of a company. operating performance of a company.
  • 3. c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Define and describe an accounting Define and describe an accounting system. system. 1 1
  • 4. Basic Accounting Systems Basic Accounting Systems o An An accounting system accounting system is the methods and is the methods and procedures for collecting, classifying, procedures for collecting, classifying, summarizing, and reporting a business’s summarizing, and reporting a business’s financial and operating information. financial and operating information.
  • 5. BASIC ACCOUNTING SYSTEMS BASIC ACCOUNTING SYSTEMS As a business grows As a business grows and changes, and changes, accounting systems accounting systems also change in the also change in the following three-step following three-step process. process.  Analyze user Analyze user information needs. information needs.  Design the system to Design the system to meet the user needs. meet the user needs.  Implement the Implement the system. system.
  • 7. Basic Accounting Systems Basic Accounting Systems o Internal controls Internal controls are the policies and are the policies and procedures that protect assets from misuse, procedures that protect assets from misuse, ensure that business information is accurate, ensure that business information is accurate, and ensure that laws and regulations are being and ensure that laws and regulations are being followed. followed.
  • 8. Processing Methods Processing Methods o Processing methods Processing methods are the means by which are the means by which the accounting system collects, summarizes, the accounting system collects, summarizes, and reports accounting information.These and reports accounting information.These methods may be either methods may be either manual manual or or computerized computerized. .
  • 9. c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Journalize and post transactions in a Journalize and post transactions in a manual accounting system that uses manual accounting system that uses subsidiary ledgers and special subsidiary ledgers and special journals. journals. 2 2
  • 10. Manual Accounting Systems Manual Accounting Systems o Understanding a manual accounting system is Understanding a manual accounting system is useful in identifying relationships between useful in identifying relationships between accounting data and reports. accounting data and reports.
  • 11. Subsidiary Ledgers Subsidiary Ledgers o A large number of individual accounts with a A large number of individual accounts with a common characteristic can be grouped common characteristic can be grouped together in a separate ledger called a together in a separate ledger called a subsidiary ledger subsidiary ledger. .
  • 12. Subsidiary Ledgers Subsidiary Ledgers o The primary ledger, which contains all of the The primary ledger, which contains all of the balance sheet and income statement accounts, balance sheet and income statement accounts, is called a is called a general ledger general ledger. .
  • 13. Subsidiary Ledgers Subsidiary Ledgers o Each subsidiary ledger is represented in the Each subsidiary ledger is represented in the general ledger by a summarizing account, general ledger by a summarizing account, called a called a controlling account controlling account. .
  • 14. Subsidiary Ledgers Subsidiary Ledgers o The individual customer accounts are The individual customer accounts are arranged in alphabetical order in a subsidiary arranged in alphabetical order in a subsidiary ledger called the ledger called the accounts receivable accounts receivable subsidiary ledger subsidiary ledger, , or or customers ledger customers ledger. .
  • 15. Subsidiary Ledgers Subsidiary Ledgers o The individual creditor accounts are arranged The individual creditor accounts are arranged in alphabetical order in a subsidiary ledger in alphabetical order in a subsidiary ledger called the called the accounts payable subsidiary ledger accounts payable subsidiary ledger, , or or creditors creditors ledger ledger. .
  • 17. Special Journal Special Journal o One method of processing transactions more One method of processing transactions more efficiently in a manual system is to use special efficiently in a manual system is to use special journals. journals. Special journals Special journals are designed to be are designed to be used for recording a single kind of transaction used for recording a single kind of transaction that occurs frequently. that occurs frequently.
  • 19. Special Journals Special Journals o The all-purpose two-column journal, called the The all-purpose two-column journal, called the general journal general journal or simply the or simply the journal, journal, can be can be used for entries that do not fit into any of the used for entries that do not fit into any of the special journals. special journals.
  • 20. Special Journals Special Journals o The The revenue journal revenue journal is used for recording fees is used for recording fees earned on account. earned on account.
  • 21. Special Journals Special Journals o Cash fees earned would be recorded in the Cash fees earned would be recorded in the cash receipts journal cash receipts journal. .
  • 22. Special Journals Special Journals o Purchases made on account (on credit) are Purchases made on account (on credit) are recorded in the recorded in the purchases journal purchases journal. .
  • 23. Special Journals Special Journals o All cash payments are recorded in the All cash payments are recorded in the cash cash payments journal payments journal. .
  • 24. Special Journals Special Journals o NetSolutions had the following selected NetSolutions had the following selected general ledger balances as of March 1, 2014: general ledger balances as of March 1, 2014: Account Number Account Balance 11 Cash $6,200 12 Accounts Receivable 3,400 14 Supplies 2,500 18 Office Equipment 2,500 21 Accounts Payable 1,230
  • 25. Revenue Journal Revenue Journal o If NetSolutions recorded its revenue If NetSolutions recorded its revenue transactions in the general journal, the transactions in the general journal, the following entries would have to be made: following entries would have to be made:
  • 26. Revenue Journal Revenue Journal o Revenues are normally recorded to the Revenues are normally recorded to the revenue journal when the company sends a revenue journal when the company sends a bill, referred to as an bill, referred to as an invoice invoice, to the customer. , to the customer. o Each invoice is normally numbered in Each invoice is normally numbered in sequence for future reference. sequence for future reference.
  • 27. REVENUE REVENUE JOURNAL JOURNAL If NetSolutions journalized these same fees earned on account entries in the revenue journal, the process is simplified, as you can see in Exhibit 2.
  • 29. Revenue Journal Revenue Journal o Let’s take a step-by-step look at the process Let’s take a step-by-step look at the process used to post the first entry. This entry was used to post the first entry. This entry was made on March 2, 2014, when NetSolutions made on March 2, 2014, when NetSolutions issued Invoice No. 615 to Accessories By Claire issued Invoice No. 615 to Accessories By Claire for fees earned of $2,200. for fees earned of $2,200.
  • 30. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Click here to skip “Exhibit 3 (in Steps)” (continued) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00
  • 31. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) 1 2 3 4 5 6 1 2 3 4 5 6 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 (continued) Date Item P.R. Debit Credit Balance Mar. 2 R35 2,200 2,200 2014 Accounts Receivable Subsidiary Ledger Accessories By Claire Revenue Journal Page 35 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit
  • 32. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 Mar. 2 615 Accessories By Claire 2 2 0 0 00 (continued) 2014 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 Date Item P.R. Debit Credit Balance Mar. 2 R35 2,200 2,200 2014 Accounts Receivable Subsidiary Ledger Accessories By Claire
  • 33. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 (continued) 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 The same procedure would be used to post the other transactions to the individual accounts in the accounts receivable subsidiary ledger.
  • 34. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Revenue Journal Page 35 1 2 3 4 5 6 1 2 3 4 5 6 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 (continued) 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Next, the amount column would be totaled. 9 6 0 0 00 31
  • 35. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) ACCOUNT Accounts Receivable Account No. 12 Balance Dr. Cr. Date Dr. Cr. Item Post. Ref. 2014 Mar. 1 Balance 3 400 00 31 9 600 00 13 000 00 R35 The debit total is posted from the revenue journal to Accounts Receivable in the general ledger. Revenue Journal, page 35 (continued)
  • 36. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 (12) Indicates a debit posting of $9,600 to Accounts Receivable (General Ledger Account 12) 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 31 9 6 0 0 00 (continued)
  • 37. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) ACCOUNT Fees Earned Account No. 41 Balance Date Dr. Cr. Item Post. Ref. 9 600 00 R35 The credit total is posted from the revenue journal to Fees Earned in the general ledger. 9 600 00 Dr. Cr. (continued) Revenue Journal, page 35 Mar. 31 2014
  • 38. EXHIBIT 3 EXHIBIT 3 (IN STEPS) (IN STEPS) Indicates a credit posting of $9,600 to Fees Earned (General Ledger Account 41) Revenue Journal Invoice Post Accts. Rec. – Debit Date No. Account Debited Ref. Fees Earned – Credit Page 35 1 2 3 4 5 6 1 2 3 4 5 6 (12) 2014 Mar. 2 615 Accessories By Claire 2 2 0 0 00 6 616 RapZone 1 7 5 0 00 18 617 Web Cantina 2 6 5 0 00 27 618 Accessories by Claire 3 0 0 0 00 31 9 6 0 0 00 (41)
  • 39. Cash Receipts Journal Cash Receipts Journal o All transactions that involve the receipt of cash All transactions that involve the receipt of cash are recorded in a are recorded in a cash receipts cash receipts journal journal. Every . Every entry recorded in the cash receipts journal will entry recorded in the cash receipts journal will involve a debit to the “Cash Dr.” column. involve a debit to the “Cash Dr.” column.
  • 41. EXHIBIT 4 EXHIBIT 4 (IN STEPS) (IN STEPS) Mar. 1 Rent Revenue 400 400 CASH RECEIPTS JOURNAL Other Accounts Post Accounts Receivable Cash Date Account Credited Ref. Cr. Cr. Dr. Page 14 2014 19 Web Cantina 3,400 3,400 28 Accessories By Claire 2,200 2,200 30 RapZone 1,750 1,750 Date Item P.R. Debit Credit Cr. Bal. ACCOUNT Rent Revenue Acct. No. 42 GENERAL LEDGER 42 CR14 Click the button to skip “Exhibit 4 (in Steps)” Mar. 1 2014 400 (continued) 400
  • 42. EXHIBIT 4 EXHIBIT 4 (IN STEPS) (IN STEPS) Date Item P.R. Debit Credit Balance Web Cantina Mar. 1 Bal. 3,400 18 R35 2,650 6,050 2014 3,400 2,650 19 Mar. 1 Rent Revenue 400 400 CASH RECEIPTS JOURNAL Other Accounts Post Accounts Receivable Cash Date Account Credited Ref. Cr. Cr. Dr. Page 14 2014 19 Web Cantina 3,400 3,400 28 Accessories By Claire 2,200 2,200 30 RapZone 1,750 1,750 Accounts Receivable Subsidiary Ledger CR14 (continued) 42
  • 43. Cash Receipts Journal Cash Receipts Journal o After all journalizing and posting to individual After all journalizing and posting to individual accounts for the month is complete, the accounts for the month is complete, the columns are totaled. columns are totaled.
  • 44. EXHIBIT 4 EXHIBIT 4 (IN STEPS) (IN STEPS) Mar. 1 Rent Revenue 400 400 CASH RECEIPTS JOURNAL Other Accounts Post Accounts Receivable Cash Date Account Credited Ref. Cr. Cr. Dr. Page 14 2014 19 Web Cantina 3,400 3,400 28 Accessories By Claire 2,200 2,200 30 RapZone 1,750 1,750 42 400 7,350 7,750 ( ) ( ) ( ) A check mark indicates that items in this column are posted individually. 12 11 (continued) 31
  • 45. Accounts Receivable Account Accounts Receivable Account o The total of the accounts in the accounts The total of the accounts in the accounts receivable subsidiary ledger should match the receivable subsidiary ledger should match the balance in the general ledger’s Accounts balance in the general ledger’s Accounts Receivable account. Receivable account.
  • 46. Purchases Journal Purchases Journal o The The purchases journal purchases journal is designed for is designed for recording all recording all purchases on account purchases on account. .
  • 48. EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL Page 11 2014 Mar. 3 Howard Supplies 600 600 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 Click on button to skip “Exhibit 5 (in steps)” (continued)
  • 49. EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) PURCHASES JOURNAL Page 11 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 Note that the March 12 purchase of office equipment for $2,800 is recorded as a debit in the “Other Accounts Dr.” column. Also note that the account title is written in for proper posting. (continued) Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL 2014 Mar. 3 Howard Supplies 600 600
  • 50. EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) PURCHASES JOURNAL Page 11 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL 2014 Mar. 3 Howard Supplies 600 600 Date Item P.R. Dr. Cr. Balance 2014 P11 (continued) Accounts Payable Subsidiary Ledger Howard Supplies 600 Mar. 3 600
  • 51. EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) PURCHASES JOURNAL Page 11 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL 2014 Mar. 3 Howard Supplies 600 600 (continued) The other entries to the accounts payable subsidiary ledger are recorded using the same procedure.
  • 52. EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) PURCHASES JOURNAL Page 11 2014 Mar. 3 Howard Supplies 600 600 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 This posting reference indicates that Office Equipment (Account 18) is debited in the general ledger for $2,800. Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount 18
  • 53. Purchases Journal Purchases Journal o At the end of March, all columns are totaled At the end of March, all columns are totaled and the equality of debits and credits is and the equality of debits and credits is verified.Then the total amounts in the verified.Then the total amounts in the “Accounts Payable Cr.” and “Supplies Dr.” “Accounts Payable Cr.” and “Supplies Dr.” columns are posted. Because Office Equipment columns are posted. Because Office Equipment was posted earlier, the $2,800 total is not was posted earlier, the $2,800 total is not posted. posted.
  • 54. EXHIBIT 5 EXHIBIT 5 (IN STEPS) (IN STEPS) 7 Donnelly Supplies 420 420 12 Jewett Bus. Sys. 2,800 Off. Equip. 18 2,800 19 Donnelly Supplies 1,450 1,450 27 Howard Supplies 960 960 31 6,230 3,430 2,800 ( ) ( ) ( ) Accts. Other Post Payable Supplies Accounts Post Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount PURCHASES JOURNAL Page 11 2014 Mar. 3 Howard Supplies 600 600 21 ACCOUNT Accounts Payable No. 21 GENERAL LEDGER Date Item P.R. Debit Credit Balance Mar. 1 Bal 1,230 6,230 7,460 31 P11 2014 Supplies would be debited for $3,430 and 14 written in the parentheses.
  • 55. Cash Payments Journal Cash Payments Journal o All transactions involving a credit to All transactions involving a credit to Cash Cash are are recorded in the recorded in the cash payments journal cash payments journal. .
  • 57. EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 On March 2, 2014, issued Check 150 for rent of $1,600. Click button to skip “Exhibit 6 (in steps)” (continued)
  • 58. Cash Payments Journal Cash Payments Journal o The amounts listed in the “Other Accounts Dr.” The amounts listed in the “Other Accounts Dr.” column are posted on a regular basis.The column are posted on a regular basis.The $1,600 for Rent Expense is posted to Account $1,600 for Rent Expense is posted to Account No. 52. No. 52.
  • 59. EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 General Ledger Account Rent Expense 1,600 1,600 Date Item P.R. Dr. Cr. Balance Account No. 52 52 (continued) 2014 Mar. 2 CP7
  • 60. EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) 15 151 Grayco Supplies 1,230 1,230 CASH PAYMENTS JOURNAL PAGE 7 Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr 2014 Mar. 2 150 Rent Expense 1,600 1,600 On March 15, issued Check 151 to Grayco Supplies for $1,230. 52 (continued)
  • 61. Cash Payments Journal Cash Payments Journal o Let’s post to the accounts payable subsidiary Let’s post to the accounts payable subsidiary ledger at this time to keep the creditors’ ledger at this time to keep the creditors’ accounts current. accounts current.
  • 62. EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230  52 Accounts Payable Subsidiary Ledger Grayco Supplies Mar. 1 Bal. 1,230 Date Item P.R. Dr. Cr. Balance 1,230 --- 15 CP7 2014 (continued)
  • 63. Cash Payments Journal Cash Payments Journal o Now, let’s journalize the remainder of March’s Now, let’s journalize the remainder of March’s cash disbursements. Following that, let’s post to cash disbursements. Following that, let’s post to the individual creditors’ accounts. the individual creditors’ accounts.
  • 64. EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230  21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 52 (continued)
  • 65. EXHIBIT 6 EXHIBIT 6 (IN STEPS) (IN STEPS) PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230  52    54 21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 (continued) CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr
  • 66. Cash Payments Journal Cash Payments Journal o The journal is ruled, summed, and verified for The journal is ruled, summed, and verified for the equality of the debits and the “Cash Cr.” the equality of the debits and the “Cash Cr.” column. column.
  • 67. CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2008 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230 21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230 31 2,650 5,050 7,700 52    54  21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 (continued) CASH PAYMENTS CASH PAYMENTS JOURNAL JOURNAL
  • 68. CASH PAYMENTS CASH PAYMENTS JOURNAL JOURNAL CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2008 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230 21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 CASH PAYMENTS JOURNAL Other Accounts Ck. Post Accounts Payable Cash Date No. Account Debited Ref. Dr. Dr. Cr PAGE 7 2014 Mar. 2 150 Rent Expense 1,600 1,600 15 151 Grayco Supplies 1,230 1,230 21 152 Jewett Business Sys. 2,800 2,800 22 153 Donnelly Supplies 420 420 30 154 Utilities Expense 1,050 1,050 31 155 Howard Supplies 600 600 31 2,650 5,050 7,700 52    54  (21) (11) ( )   The totals for “Accounts Payable Dr.” and “Cash Cr.” are posted. (continued)
  • 69. Accounts Payable Account Accounts Payable Account o After all posting has been completed, the After all posting has been completed, the balances in the accounts payable subsidiary balances in the accounts payable subsidiary ledger should equal the balance of the ledger should equal the balance of the accounts payable controlling account in the accounts payable controlling account in the general ledger. general ledger.
  • 70. c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Describe and illustrate the use of a Describe and illustrate the use of a computerized accounting system. computerized accounting system. 3 3
  • 71. Computerized Accounting System Computerized Accounting System o Computerized accounting systems have the Computerized accounting systems have the following three main advantages over manual following three main advantages over manual systems: systems:  Computerized systems simplify the record-keeping Computerized systems simplify the record-keeping process by recording transactions in electronic process by recording transactions in electronic forms and, at the same time, posting them forms and, at the same time, posting them electronically to general and subsidiary ledger electronically to general and subsidiary ledger accounts. accounts.
  • 72. Computerized Accounting System Computerized Accounting System  Computerized systems are generally more accurate Computerized systems are generally more accurate than manual systems. than manual systems.  Computerized systems provide management with Computerized systems provide management with current account balance information to support current account balance information to support decision making, since account balances are posted decision making, since account balances are posted as the transactions occur. as the transactions occur.
  • 76. c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Describe the basic features of e- Describe the basic features of e- commerce. commerce. 4 4
  • 77. E-Commerce E-Commerce o Using the Internet to perform business Using the Internet to perform business transactions is termed transactions is termed e-commerce e-commerce. .
  • 78. E-Commerce E-Commerce o When transactions are between a company When transactions are between a company and a consumer, it is termed and a consumer, it is termed B2C B2C (business-to- (business-to- consumer) consumer) e-commerce e-commerce. .
  • 79. E-COMMERCE E-COMMERCE Three more advanced Three more advanced areas where the areas where the Internet is being used Internet is being used for business purposes for business purposes are: are:  Supply chain Supply chain management (SCM) management (SCM)  Customer relationship Customer relationship management (CRM) management (CRM)  Product life-cycle Product life-cycle management (PLM) management (PLM)
  • 80. c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Learning Objective Use segment analysis in evaluating Use segment analysis in evaluating the operating performance of a the operating performance of a company. company. 5 5
  • 81. Segment Analysis Segment Analysis o One way to report revenue is by different One way to report revenue is by different segments. Businesses may be segmented by segments. Businesses may be segmented by region, by product or service, or by type of region, by product or service, or by type of customer. customer.
  • 83. USING SEGMENT INFORMATION USING SEGMENT INFORMATION TO PERFORM TO PERFORM HORIZONTAL ANALYSIS HORIZONTAL ANALYSIS
  • 84. USING SEGMENT INFORMATION USING SEGMENT INFORMATION TO PERFORM TO PERFORM VERTICAL ANALYSIS VERTICAL ANALYSIS
  • 85. c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Accounting Accounting Systems Systems The End The End