Concept explainers
Journal:
Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.
Companies may use various kinds of journals, but every company has most common form of journal that is, the general journal. Journal makes three significant contributions to the recording process. They are as follows:
- Complete effect of a business transaction disclosed in one place.
- Transactions are recorded in chronological order.
- It helps to prevent or locate errors.
Rules of Debit and Credit
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
To journalize: the issuance of common stock in exchange of cash,
Equipment’s purchased on account, the rent paid for June month and after completing the welding work, bill sent to WW.
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Check out a sample textbook solutionChapter 3 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
- Journalise the transactions (Omit explanations)arrow_forwardUse the information from PB10 to complete this problem. Record entries for each transaction listed.arrow_forwardSource documents ________.A. are input devicesB. are output devicesC. do not have to be on paperD. cannot be electronic filesarrow_forward
- You wish to create a Data Table that calculates the NPV with various initial outlays in D1:E6. Which cell should be entered into the Data Table dialog box, and in which edit box?arrow_forwardRecord the transactions directly into the t accounts. The second pic is the examplearrow_forwardShow the correct journal entries.arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegePrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College