Recording and Posting Transactions

Extend Your Knowledge: 3.2

Journalize

Post

Prepare statements

Close

Prepare post-closingtrial balance

Adjust

Prepareunadjusted trial balance

Prepare adjusted

trial balance

22

3

4

5 6

7

8

9Analyze transactions1

The Accounting Cycle

Analyze transactions

1

Bank Statement

Finlay Interiors

January 2005

Jan.1 Deposit $10,000

Purchase Ticket

Note PayableClient Billing

Service Contract

Carol Finlay invested $10,000 cash into the business. This would appear on a source document, the bank statement, as a deposit. This is a transaction and will therefore be recorded.

Analyze transactions

1

Journalize2

Bank Statement

Finlay Interiors

January 2005

Jan.1 Deposit $10,000

GENERAL JOURNAL Page 1

Date Account Titles and Explanation PR Debit Credit Jan. 1 Cash 101 1 0 000 Carol Finlay, Capital 301 10 000 Investment by owner

The transaction is recorded in the general journal as a $10,000 debit to Cash and a $10,000 credit to Carol Finlay, Capital

GENERAL JOURNAL Page 1

Date Account Titles and Explanation PR Debit Credit Jan. 1 Cash 101 1 0 000 Carol Finlay, Capital 301 10 000 Investment by owner

Analyze transactions

1

Journalize2

Post3

GENERAL LEDGER

Cash ACCOUNT NO. 101

DATE EXPLANATION PR DEBIT CREDIT BALANCE

Jan. 1 G1 10 0 0 0 10 0 0 0

Carol Finlay, Capital ACCOUNT NO. 301

DATE EXPLANATION PR DEBIT CREDIT BALANCE

Jan . 1 G1 10 0 0 0 10 0 0 0

The transaction is posted from the general journal to the appropriate accounts in the ledger.

GENERAL LEDGER

Cash ACCOUNT NO. 101

DATE EXPLANATION PR DEBIT CREDIT BALANCE

Jan. 1 G1 10 0 0 0 10 0 0 0

Jan. 31 G1 8 0 7 0

Carol Finlay, Capital ACCOUNT NO. 301

DATE EXPLANATION PR DEBIT CREDIT BALANCE

Jan . 1 G1 10 0 0 0 10 0 0 0

Analyze transactions

1

Journalize2

Post3

Prepareunadjusted trial balance

4

The trial balance is prepared by taking the balance from each account in the ledger and listing it on the trial balance.