Acct Notes

• 1. Analyze Transactions
• 2 Record in General Journal
• 3 Post to the Ledger
• 4 Unadjusted trial balance
• 5 Adjusting entries
• 6 Prepare Adjusted trial balance
• 7 Closing Entries
• 8 Post Closing trial balance
• 9 Reversing Entries - optional

Prepare Adjusted Trial Balance

Prepare Income Statement

Prepare Retained Earnings

Prepare Balance Sheet

Sales Journal- sale of merchandise on credit

Purchase Journal- purchases on credit

Cash Receipts Journal - Record Cash Receipts

Cash Payment Journal - Record Cash Payments

Accounts Receivables

Accounts Payables

• Debit Credit
• Assets + -
• Liabilities - +
• Capital Stock - +
• Retd Earnings - +

• Debit Credit
• Revenue - +
• Expense + -
• Dividend + -

Debit the Liability Credit the Asset

• eg
• Unearned Rent 150
• Rent Revenue 150

Debit the Asset Credit the Revenue

• eg
• Interest Receivable 200
• Interest Revenue 200

Debit the Expense Credit the Liability

• eg
• Salary Expense 900
• Salary Payable 900

Debit the Expense Credit the Asset

• eg
• Insurance Expense 875
• Prepaid Insurance 875

• Increase the Expense Decrease the Asset
• Credit Contra-Asset
• eg
• Depreciation Expense 500
• Accumulated Depreciation 500

• Expenses Income Summary
• | Credit Debit|

• Revenue Income Summary
• Debit| |Credit

• Dividends Retained Earnings
• |Credit Debit|

• Income Summary Retained Earnings
• Debit| |Credit

=Ending Inventory

= Cost of Goods Sold

= Cost of Goods Avalialbe for Sale

= Ending Inventory

= Cost of Goods Available for sale

• Cost of Goods Sold Net Income
• Overstated Understated

Cost of Goods Sold Net Income

Understated Overstated

Cost of Goods Sold Understated

an expense account

Contra expense offset to Cost of Goods Sold

• Adjusting Entry 12/31 Reversing Entry 1/1
• Interest Rec 66 Interest Rev 66
• Interest Rev 66 Interest Rec 66
• 3/1
• Cash 1419
• Notes Receivable 1320
• Interest Revenue 99
• Interest Revenue period = 33