Chapter 2 Recording Business TransactionsuTHE ACCOUNT, THE JOURNAL AND THE LEDGERuDEBITS, CREDITS AND DOUBLE-ENTRY ACCOUNTINGuTRANSACTION RECORDING PROCESSuRECORDING TRANSACTIONSuPREPARING THE TRIAL BALANCELifang DiLifang DiSchool of Economics and Management ZJNUSchool of Economics and Management ZJNUTel: 658112Tel: 658112Email: dilifangzjnu.comEmail: dilifangzjnu.comThe Account, the Journal and the LedgerAccounts is the detailed record of all the changes that have occurred in a particular asset, liability or owners (stockholders) equity. It is the basic summary device of accounting. Journal is the chronological record of transactions.Ledger is the book holding all the accounts with their balances.Trial balance is the list of all the accounts with their balances.Analyze each transaction and event from source documentsAccounting ProcessRecord transactions and events in a journal (分录簿分录簿)Post journal information to the ledger (账簿账簿)Prepare the trial balance (试算平衡表试算平衡表)AssetsAccountsAssetsAccountsAssetAccounts=The Account Groups+LiabilityAccountsLiabilityAccountsLiabilityAccountsEquityAccountsEquityAccountsEquityAccountsOwner, CapitalOwner, WithdrawalsLandEquipmentBuildingsCashNotes ReceivableSuppliesPrepaid expensesAccounts ReceivableAssetAccountsAsset AccountsAccrued LiabilitiesUnearned RevenueNotes PayableAccounts PayableLiabilityAccountsLiability AccountsEquityAccountsRevenuesCapitalDrawingExpensesEquity AccountsChart of AccountsThe chart of accounts （会计科目表） is a list of all accounts and includes an identifying number for each account.T-Account, Debits and CreditsA T-account (TA T-account (T形账户形账户) represents a general ) represents a general ledger account and is a tool used to ledger account and is a tool used to understand the effects of one or more understand the effects of one or more transactions. transactions. LiabilitiesEquityAssets=+Double-Entry AccountingDebit CreditDebit CreditDebit CreditASSETS + + - -LIABILITIES - - + +EQUITIES - - + +An account balance is the difference between the increases and decreases in an account.Normal balance is the side an account increases. RevenuesRevenuesExpensesExpensesCapitalCapitalDrawing/DiviDrawing/Dividendsdends_ _+ +_ _Debit CreditCapital - - + +Debit CreditDrawing/Dividends + + - -Debit CreditExpenses + + - -Debit Credit Revenues - - + +Double-Entry AccountingEquityDollar amount of debits and creditsJournalizing TransactionsTransaction DateTransaction explanationTitles of Affected AccountsBalance Column AccountT-accounts are useful illustrations, but balance column ledger accounts are used in practice.Posting Journal Entries1Identify the debit account in ledger.2Enter the date.3Enter the amount and description.4Enter the journal reference.5Compute the balance.Enter the ledger reference.6Analyzing TransactionsAnalysis:Double entry:101301Posting:Analyzing TransactionsAnalysis:Double entry:126101Posting:Analyzing TransactionsAnalysis:Double entry:167101Posting:Analyzing TransactionsAnalysis:Double entry:126201Posting:Analyzing TransactionsAnalysis:Double entry:403101Posting:Preparing a Trial BalancePreparing a trail balance involves three steps:1.List each account title and its amount (from ledger) in the trial balance. If an account has a zero balance, list it with a zero in the normal balance column (or omit it entirely).2.Compute the total of debit balances and the total of credit balances.3.Verify (prove) total debit balances equal total credit balances.After processing its remaining transactions for December, FastForwards Trial Balance is prepared.DebitsCreditsCash4,350$ Accounts receivable- Supplies9,720 Prepaid Insurance2,400 Equipment26,000 Accounts payable6,200$ Unearned consulting revenue3,000 C. Taylor, Capital30,000 Owners Withdrawals200 Consulting revenue5,800 Rental revenue300 Salaries expense1,400 Rent expense1,000 Utilities expense230 Total45,300$ 45,300$ FastForwardTrial BalanceDecember 31, 2009The trial balance lists all account balances in the general ledger. If the books are in balance, the total debits will equal the total credits.End-of-Chapter HomeworkOptional:Review: accounting vocabulary on P98Quick Check:multiple choice questions on P99Required to submit:Assess Your Progress:S2-5, S2-9, E2-13，E2-14谢谢观赏！谢谢观赏！