Professional Documents
Culture Documents
The Recording Process: Learning Objectives
The Recording Process: Learning Objectives
2-1
The Account
Learning
Objective 1 ◆ Record of increases and decreases in
Explain what an a specific asset, liability, stockholders’
account is and equity, revenue, or expense item.
how it helps in
the recording ◆ Debit = “Left”
process.
◆ Credit = “Right”
Account Name
An account can Debit / Dr. Credit / Cr.
be illustrated in a
T-account form.
2-2 LO 1
Debits and Credits
Learning
DEBIT AND CREDIT PROCEDURES Objective 2
Define debits and
credits and
Double-entry system explain their use
in recording
◆ Each transaction must affect two or more business
transactions.
accounts to keep the basic accounting
equation in balance.
2-3 LO 2
Debits and Credits
Balance $15,000
2-4 LO 2
Debits and Credits
Balance $1,000
2-5 LO 2
Rules of Debit and Credit / Rules of Journalyzing
Assets Liabilities
Expenses Revenues
Dividends Equity
Increase Decrease Decrease Increase
2-6
Debits and Credits
increase side.
Liabilities
Debit / Dr. Credit / Cr.
Normal Balance
Chapter
3-24
2-7 LO 2
Debits and Credits
Chapter Chapter
3-25 3-25
2-8 LO 2
Debits and Credits
Normal Balance
Chapter
3-27
2-9 LO 2
Debits and Credits
Liabilities
Debit / Dr. Credit / Cr.
Normal Normal
Balance Balance
Debit Credit Normal Balance
Assets
Equity
Debit / Dr. Credit / Cr.
Debit / Dr. Credit / Cr.
Normal Balance
Normal Balance
Chapter
3-23
Expenses Chapter
3-25
Revenues
Debit / Dr. Credit / Cr.
Debit / Dr. Credit / Cr.
Normal Balance
Normal Balance
Chapter
3-27 Chapter
3-26
2-10
LO 2
Summary of Debit/Credit Rules
Statement of
Financial Position Income Statement
Asset = Liability + Equity Revenue - Expense
Debit
Credit
2-11 LO 2
Summary of Debit/Credit Rules
Question
Debits:
2-12 LO 2
Summary of Debit/Credit Rules
Question
Accounts that normally have debit balances are:
2-13 LO 2
Summary of Debit/Credit Rules
2-14 LO 2
> DO IT!
Kate Browne, president of Hair It Is Company SA, has just rented
space in a shopping mall in which she will open and operate a beauty
salon. A friend has advised Kate to set up a double-entry set of
accounting records in which to record all of her business transactions.
Identify the balance sheet accounts that Hair It Is Company will
likely use to record the transactions needed to establish and open the
business. Also, indicate whether the normal balance of each account
is a debit or a credit.
Assets Liabilities Equity
2-15 LO 2
The Account
Learning
Business documents, such as a sales Objective 3
Identify the basic
receipt, a check, or a bill, provide evidence steps in the
of the transaction. recording
process.
2-16 LO 3
Steps in the Recording Process
Learning
The Journal Objective 4
Explain what a
journal is and
◆ Book of original entry. how it helps in
the recording
◆ Transactions recorded in chronological process.
order.
2-17 LO 4
The Journal
GENERAL JOURNAL
Equipment 7,000
Cash 7,000
2-18 LO 4
The Journal
GENERAL JOURNAL
2-19 LO 4
> DO IT!
3-22
● THANK YOU SO MUCH
3-23