Akaun Chapter 3

KE1013 Chapter Three 1

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THE HIGHER THE MOUNTAIN U CLIMB, THE VIEW IS NICER


CHAPTER THREE :

THE RECORDING PROCESS


Outline

• Characteristics of an account

• The rules of Debit and Credit

• The steps in recording process

• The preparation of Trial Balance


The Books of Entry

• Journal : Prime entry book

• Account : individual accounting record of

increases or decreases in a specific item.

• Ledger : Group of accounts

– General Ledger

– Creditors Ledger / Accounts Payable

– Debtors Ledger / Accounts Receivable

• Chart of Account : List of accounts


The Recording Process

DocumentsDocumentsDocumentsSourceDocuments

Journal Ledger

Trial Balance


Journal

Name of the journal

Date Particular Folio Debit Credit


Account

Name of the account

Debit Credit

Date Particular Folio Total

Date Particular Folio Debit Credit Balance

Name of the account

T-Account

Three Columns Account


The Rules of Debit and Credit

• Assets :• Debit => increase• Credit => decrease

• Liabilities and Owner’s Equity :• Debit => Decrease• Credit => Increase


The Rules of Debit and Credit

Debit Account Credit

Increase in Assets Decrease in Assets

Decrease in Liabilities Increase in Liabilities

Decrease in Owner’s Equity Increase in Owner’s Equity

Decrease in Revenue Increase in Revenue

Increase in Expenses Decrease in Expenses


Expansion of Basic Equation

Assets = Liabilities + Owner’s Equity

AssetsLiabilities Capital Drawings

Revenue Expenses


Recording Transaction

Transaction Debit Credit

Started business with cash. CapitalCash

Bought office equipment on creditfrom Syarikat Emas.

OfficeEquipment

Account Payable

Received loan from Bank Intanin cash.

Cash BankLoan



Bought motor van by cash Motor Vehicle

Cash

Paid rental expenses by cash RentalExpenses

Cash

Bought office supplies by credit OfficeSupplies

Account Payable



Paid utility bills with cash UtilityExpenses

Cash

Received cash from Abu, a debtor. Cash AccountReceivable

A check on supplies showedthat RM120 supplies has been used.

SuppliesExpenses

OfficeSupplies



Owner brought in his own car to be used in business.

MotorVehicle

Capital

Sold motor van for cash CashMotor Vehicle

Owner took cash for his own use. Drawings Cash


Journal Entries

Siti Malaysia, the owner of Tadika Malaysia started her businesson 1 January 2002 with cash M25,000. The followings aretransactions related to the business for the month of January:

Illustration : Tadika Malaysia


Tadika Malaysia

General Journal

Date Particulars Debit Credit

Jan. 1 Cash 25,000

Capital 25,000

( Cash invested by owner )


Tadika Malaysia- General Journal

Jan. 5 Bought office equipment with cash, RM500.

Jan. 5 Office Equipment 500

Cash 500

(Bought office equipment with cash)



Jan.10 Bought furnitures amounting to RM4,700 withcash from Syarikat Perabot Kita.

Jan. 10 Furnitures 4,700

Cash 4,700

( Bought furnitures withcash )




Jan. 11 35,000

35,000



Jan.11 Bought motor van for business use by creditfrom Syarikat Kenderaan amounting to RM35,000.

Motor vehicles

Account Payable

( bought motor van by credit )


Jan.15 Paid advertising expense RM2,000 with cash.

Jan. 15 Advertising expense 2,000

Cash 2,000

( Paid advertising expense with cash )




Jan.18 Paid utility bills with cash amounting to RM325.

Jan. 18 Utilities Expense 325

Cash 325

( Paid utility bills with cash )




Jan.23 Paid salaries by cash RM700 per person for5 workers.

Jan. 23 Salary expense 3,500

Cash 3,500

( Paid salary by cash )




Jan 24 Received cash RM7,500 for the fees of the month.

Jan. 24 Cash 7,500

Revenue : Fees 7,500

( received fees or the month )




Jan.27 Bought two units of computers on credit , amountingto RM4,000 per unit.

Jan. 27 Office Equipment 8,000

Account Payables 8,000

( Bought computers on credit )




Jan.30 Siti Malaysia took cash RM1,200 for her own use.

Jan. 30 Drawings 1,200

Cash 1,200

( Cash withdrawals by the owner )




Posting from journal to ledger

Journal Ledger


General Ledger

Cash

Jan 1 Capital 25,000 Jan 5 Office Equipt 500

24 Fees Rec. 7,500 10 Furnitures 4,700

18 Utilities 325

15 Advertising 2,000

30 Drawings 1,200

23 Salary 3,500

Balance c/f

32,500 32,500

20,275


General Ledger

Capital

Jan 1 Cash 25,000

25,00025,000

Jan 31 Bal c/f 25,000


General Ledger

Office Equipment

Jan 31 Bal c/f 8,500

Jan 5 Cash 500

27 A/c Payable8,000

8,500 8,500


General Ledger

Furnitures

Jan 31 Bal c/f 4,700Jan 10 Cash 4,700

4,700 4,700

Motor Vehicles

Jan 11 A/c Payable 35,000 Jan 31 Bal c/f 4,700

35,000 35,000


General Ledger

Account Payable

Jan 31 Bal c/f 43,000 Jan 11 M. Vehicles 35,000

27 O. Equipmt 8,000

43,000 43,000


General Ledger

Advertising


2,000 2,000

Utility

Jan 18 Cash 325 Jan 31 Bal c/f 325

325 325


General Ledger

Salaries


3,500 3,500

Fees Received

Jan 24 Cash 7,500Jan 31 Bal c/f 7,500

7,500 7,500


General Ledger

Drawings

Jan 30 Cash 1,200

1,2001,200

Jan 31 Bal c/f 1,200


The Trial Balance

A list of accounts and their balances at a given time.

The purpose: to prove that the debits equal the creditsafter posting.

If the debits and credits do not agree, it is a sign of errorthat occurs during journalizing and posting.


Tadika MalaysiaTrial Balance as at 31 January 2002

Accounts Debit Credit

Cash 20,275

Capital 25,000

Office Equipment 8,500Furniture 4,700Motor Vehicles 35,000Account Payables 43,000

Advertising 2,000Utility 325Salaries 3,500

Fees Received 7,500Drawings 1,200

75,500 75,500


The Trial Balance : Errors

• Errors affecting trial balance

• Errors not affecting trial balance


Errors affecting trial balance

• Omission of part of an entry

• Errors of transposition

• Errors in addition in the ledger accounts

• Posting to incorrect sides of accounts

• Errors in trial balance


Errors not affecting trial balance

• Error of omission

• Error of commission

• Error of principle

• Complete reversal of entries

• Compensating errors

• Errors of original entries

Akaun Chapter 3

Education

Transcript of Akaun Chapter 3