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    Basic Accounting p3

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    Hazzelle Dumale
    The document outlines the 10 steps of the accounting cycle: 1) identifying transactions, 2) recording transactions in a journal, 3) posting to ledgers, 4) preparing a trial balance, 5) preparing an adjusting worksheet, 6) preparing financial statements, 7) journalizing and posting adjusting entries, 8) journalizing and posting closing entries, 9) preparing a post-closing trial balance, and 10) journalizing and posting reversing entries. It also defines key accounting terms like the general journal, ledger, trial balance, and chart of accounts.

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    Basic Accounting p3

    Uploaded by

    Hazzelle Dumale
    54 views5 pages
    The document outlines the 10 steps of the accounting cycle: 1) identifying transactions, 2) recording transactions in a journal, 3) posting to ledgers, 4) preparing a trial balance, 5) preparing an adjusting worksheet, 6) preparing financial statements, 7) journalizing and posting adjusting entries, 8) journalizing and posting closing entries, 9) preparing a post-closing trial balance, and 10) journalizing and posting reversing entries. It also defines key accounting terms like the general journal, ledger, trial balance, and chart of accounts.

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    The document outlines the 10 steps of the accounting cycle: 1) identifying transactions, 2) recording transactions in a journal, 3) posting to ledgers, 4) preparing a trial balance, 5) preparing an adjusting worksheet, 6) preparing financial statements, 7) journalizing and posting adjusting entries, 8) journalizing and posting closing entries, 9) preparing a post-closing trial balance, and 10) journalizing and posting reversing entries. It also defines key accounting terms like the general journal, ledger, trial balance, and chart of accounts.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    54 views5 pages

    Basic Accounting p3

    Uploaded by

    Hazzelle Dumale
    The document outlines the 10 steps of the accounting cycle: 1) identifying transactions, 2) recording transactions in a journal, 3) posting to ledgers, 4) preparing a trial balance, 5) preparing an adjusting worksheet, 6) preparing financial statements, 7) journalizing and posting adjusting entries, 8) journalizing and posting closing entries, 9) preparing a post-closing trial balance, and 10) journalizing and posting reversing entries. It also defines key accounting terms like the general journal, ledger, trial balance, and chart of accounts.

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    BASIC ACCOUNTING

    PART III

    THE ACCOUNTING CYCLE

    Step 1: Identification of Events to be Recorded

    Step 2: Transactions are Recorded in the Journal

    Step 3: Journal Entries Are Posted to the Ledger

    Step 4: Preparation of Trial Balance

    Step 5: Preparation of Worksheet including Adjusting Entries

    Step 6: Preparation of Financial Statements

    Step 7: Adjusting Journal Entries Are Journalized and Posted

    Step 8: Closing Journal Entries Are Journalized and Posted

    Step 9: Preparation of a Post-Closing Trial Balance

    Step 10: Reversing Journal Entries Are Journalized and Posted

    General Journal – it is the book of original entry. Shows the effects of a


    transaction in terms of debits and credit.

    Posting – Transferring the amount from general journal to appropriate accounts


    in the ledger.

    Ledger – a grouping of accounts. Used to classify and summarize transactions


    and to prepare data for basic financial statements.

    Trial Balance – listing of all ledger accounts, in order, with their respective debit
    or credit balances.
    The Journal – is a chronological record of events or business transactions
    showing all the effects of each transaction in terms of debits and credits.
    Because transactions are initially recorded in the journal, it is called as the book
    of original entry. General journal is the simplest form of journal.

    Journalizing – is the process of recording transaction in the journal after it has


    been identified and measured.

    Format

    The standard contents of general journal are as follows;

    1. Date
    2. Account title and Explanation
    3. Post Reference
    4. Debit
    5. Credit

    No. Date Account title and Explanation P.R. Debit Credit


    1 2019
    2 Jan 1 Cash xxx
    3 Mateo, Capital xxx
    4 Initial investment

    Simple and Compound Entry

    Simple Entry – only two accounts are affected, one is debited and the other
    account is credited

    Compound Entry – three or more accounts are required in journal entry.


    The Ledger – group of accounts used by the company. It is the book of final
    entry. The accounts in the general ledger is classified in two general groups:

     Balance sheet or real accounts (assets, liabilities and owner’s equity)


     Income statement or nominal account (revenue and expenses)

    Chart of Accounts – is the list of all account titles used by the company with their
    corresponding account numbers. Account titles are arranged in financial
    statement order. Meaning the balance sheet comes first, which contains asset,
    liabilities and equity. Then, income statements will follow, revenue and expenses.
    Trial Balance – listing of all ledger accounts, in order, with their respective debit
    or credit balances.

    ERRORS
    The resulting discrepancy in the trial balance is divisible by 9
    Transposition – reversing the order of numbers

    e.g. 21 750 and 21 570


    21 750 - 21 570 = 180

    180 is divisible by 9
    Slide – moving of the decimal point.
    e.g. 21 750 and 2 157

    21 750 - 2 157 = 19 575


    19 575 is divisible by 9
    References
    Ballada, W. (2018). Basic Financial Accounting and Reporting. Manila: DomDane Publishers.

    Ong, F. L. (2016). Fundamentals of Accounancy, Business and Management 1 for Senior High School.
    Quezon City: C & E Publishing, Inc.

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