THIRD

QUARTER
 RECORDING
USINESS TRANSACTIO
TRANSACTION ANALYSIS

4 BASIC STEPS:

1. Identify - source
documents.
2. Indicate - accounts
3. Ascertain -
increased or decreased
4. Determine debit or
credit
ACCOUNTING CYCLE
series of sequential
steps or procedures to
accomplish the
accounting process.
 Step 1. Identification of events to be recorded
source documents
During the
Step 2. Transactions are recorded in the journal
accounting
economic impact of transactions
period
Step 3. Journal entries are posted in the ledger
transfer of information from the journal to the ledger for classification
Step 4. Preparation of a Trial Balance
provide a listing to verify the equality of debits and credit in the ledger
Step 5. Preparation of the Worksheet including Adjusting Entries
aid in the preparation of the financial statement
Step 6. Preparation of the Financial Statements
provide useful information to decision-makers.
Step 7. Adjusting Journal Entries are Journalized and Posted
At the end of
record the accruals, expiration of deferrals, estimations and other
the
events from the worksheet. Accounts and transfer profit to owner
accounting
Step 8. Closing Journal Entries are Journalized and Posted
period
close temporary accounts and transfer profit to owners equity.
Step 9. Preparation of a Post-Closing Trial Balance
check the equality of debits and credits after the closing entries.
Step 10. Reversing Journal Entries are Journalized and Posted
simplify the recording of certain regular transaction in the next
At the start of
accounting period.
the next period
 The General Journal
(the book of original Shows all the effects of
entry) transaction in terms of
Office Equipment x xx debits and credits
Cash
xxx
Accounts Payable
xxx
Posting
Transferring the amounts from
the general journal to the
Cash appropriate accounts in the
Office
Equipmen ledger.
t
Cash

Trial Balance
Assets
Liabilities
Listing of all ledger accounts,
Owners Equity
in order, with their respective Revenues
debit or credit balances. Expenses
Source Documents
identify and describe transactions and events
entering the accounting process.
written evidences that contain information about
the nature and the amounts of the t
transactions.
bases for the journal entries
sales for journal entries
Sales invoices, cash register tapes, official
receipts, bank deposit slips, bank
statements, checks, purchase orders, time
cards, and statement of account.
THE JOURNAL
The chronological record of the entitys transactions.
Shows all the effects of a business transaction in
terms of debits and credits.
Initially recorded in a journal rather than directly in
the ledger
Known as the book of original entry
The nature and volume of transactions of the
business determine the number and type of journals
needed.
Types of journal
General journal the simplest journal
Sales journal
Purchases journal
THE FORMAT
Standard contents of the general
journal

Date
Account Titles and Explanation
P.R. <posting reference>
Debit
Credit
 Account Titles and
Date Explanation P.R. Debit Credit
2006

Novembe 1 Cash 300

r 000.00

Corpuz, Capital
300,000

Initial
investment.