Hello and welcome to the session this is. Professor for hat. In this session we would look at journalizing and posting. This topic is covered an introductory financial accounting journals accounting, journal in accounting course. And it’s helpful if you are basically starting to study for the CPA exam as always. I would like to remind you to connect with me on LinkedIn if you haven’t done so YouTube is what you would need to subscribe. I have one thousand. Six hundred. Plus accounting journals accounting, journal in accounting auditing finance and tax lecture. This lectures goes on the financial accounting journals accounting, journal in accounting. But I do cover other accounting journals accounting, journal in accounting courses if you like my lectures please like them. Click on the like button. It doesn’t cost you anything. Share them with others if you’re benefiting that might benefit other people please connect with me on Instagram on my website. You’ll have resources to additional material such as PowerPoint slides through false multiple-choice if you’re studying for your CPA exam two thousand plus CPA questions. Check it out. So the first thing we’re going to go over is the double-entry accounting journals accounting, journal in accounting system in the t-account that we learned about in the prior session so if you don’t know the t-accounts go back to the prior session and look at the t-account otherwise you’re going to be confused but let’s go ahead and review journals accounting, journal in accounting. We have assets the increase on the debtor side the reduce on the credit side liabilities the increase on the credit side come and stock increase on the credit side. I told you to cross out the debit journals accounting, journal in accounting side dividend increase on the debit journals accounting, journal in accounting side. You can cross out the credit side for now revenue increase on the credit. You can cross out. The debit journals accounting, journal in accounting expenses increases on the debit journals accounting, journal in accounting. And you can cross out the credit and also. I talked about the normal balances for each account and I said the account the side that the account increases on is also called the normal balance and this is where we put the balance for the account. It’s the same side now. I have almost a fifteen minute recording explaining this equation this is just the review for the people who viewed it.
But if you haven’t filled it and you want to know all about this. So view the prior session. Now the first thing we’re gonna learn is how to journalize so. This is a general journal. That’s empty. This is a general journal. That’s empty so the first. Let’s assume you are giving a transaction journals accounting, journal in accounting word the owner invested money in the business so the owner invested $30,000 cash in the business. Now what you. What did you learn in in the end chapter 1. You learned that cash will go up by 30 thousand and common stock will go up by 30 thousand now. What we’re gonna do we’re gonna look at the t-account well if cash goes up. It means we debit journals accounting, journal in accounting cash. Thirty thousand because cash is an asset and cash is going up come in stock when come and start going up common stock. We’ll take a credit total debit journals accounting, journal in accounting equal total credits. Thirty thousand equal to thirty thousand. How do we journalize this transaction journals accounting, journal in accounting . The first thing is we post the date and the ledger. This transaction journals accounting, journal in accounting took place. December first second the account that’s being debit journals accounting, journal in accountinged listed. First in this transaction journals accounting, journal in accounting cash is being debit journals accounting, journal in accountinged cash is listed first cash debit journals accounting, journal in accounting thirty thousand the account. That’s being credited is listed next and we indent a little common stock then we put the title of the accounts and we credit common stock. Thirty thousand then we post. Did that make sure that that it send the credits equal to each other. Then we post an explanation received investment by the owner so this is the first transaction journals accounting, journal in accounting . This is how we journalize. Let’s look at the second transaction journals accounting, journal in accounting took place on December 1st. We bought supplies for cash. So supplies went up supplies as an asset. We debit journals accounting, journal in accounting supplies and we credit cash because cash is going down supplies this list at first because supplies is the account that’s being debit journals accounting, journal in accountinged now. We’re gonna learn to practice those transaction journals accounting, journal in accounting . This is just an overview. Okay so those are the general rules. Let’s go ahead and practice more questions to see how we journalize.
After we journalize we post to the ledger. So what is posting to the ledger. Well this is what a ledger in each account has a ledger. This is the cash ledger. And it’s the cash is number 101. Here’s what’s gonna happen on. December first we received $30,000 in cash. So this is the cash budget. So this is like the t-account notice. This is the t account the debit journals accounting, journal in accounting column and credit column in this is on the side we have the balance this is the balance so if I receive $30,000 cash how much how much cash do I have thirty thousand so that’s my balance now on December 2nd I paid two thousand five hundred cash therefore cash is credited. What’s my balance in cash. My cash went down my balance. Is twenty-seven thousand five hundred on December third. I paid twenty six thousand dollar cash so my cash went down gets credit. What’s my balance now. 1500 on December 10th I received four thousand two hundred. What’s my new balance. Five thousand seven hundred so this is keeping track of my running balance now. This is all the accounts ledger. Each account will have its own ledger. And we’re gonna see this in form of fee account so we’re gonna have a tea account for each account and we’re gonna see this one. We were the example next so this is a running balance. So what we need to do is this. You remember this transaction journals accounting, journal in accounting we journalize we debit journals accounting, journal in accountinged cash credited common stock after we journalize. We post to the cash ledger. If we debit journals accounting, journal in accountinged cash the same date we bring down the day to the cash ledger of December first and if we debit journals accounting, journal in accountinged cash we’re gonna debit journals accounting, journal in accounting cash. Therefore we debit journals accounting, journal in accounting cash thirty thousand and this is the t account for cash. Now the balance is thirty thousand since we credited common stock again we bring down the date common stock December first since we credited common stock. We’re gonna credit common stock and the balance in common stock is thirty thousand again. This is the t account for common stock. So we’re keeping track of the t account for common stock.
We’ll keep in track of the t account for cash. Now when we go ahead and we go through the entries. I’m only going to show you the t account. I’m not gonna show you the balance because this is an official general ledger which is gonna work with the t account. Now few things you want to know on the slide so this way you kind of move move move move ahead. One is each general. Ledger has an account for example cash. Is 101 common stock 307 and we talked about this in the prior session. Those are the chart of accounts now what we do after. We posted the lecture after we take this 30 pounds. And bring it down here what we do. Is we write here. P our post reference 101. What is 101. It’s this number here. Why do we put 101 to indicate that this 30,000 was transferred now in this column we put. G 1 what is G 1. It means this is. This is general journals accounting, journal in accountingpage 1 so this is so this 30,000 coming from the general journals accounting, journal in accountingpage 1 so notice for common stock also coming from j1 and the account number is 307 so after we post we go back here. And we put number 307 this is what. PR is post reference. That’s all what it is now. We’re not going to be using those because it takes a lot of time to do the post reference in the real work this is done automatically what we’re gonna go over is the general journals accounting, journal in accountingjournalizing transaction journals accounting, journal in accounting . We’re gonna start from the beginning. We’re gonna identify the transaction journals accounting, journal in accounting from any source document. We’re gonna analyze it as we did. In the prior chapter record the transaction journals accounting, journal in accounting in the journals accounting, journal in accountingentry applying the double entry accounting journals accounting, journal in accounting the debit journals accounting, journal in accounting and the credits and post the entry for simplicity. We’re going to be using the t-account to represent the ledger so when I said you know this is the ledger. You’re gonna see it’s a t-account then. I just showed you that. The ledger is a t-account except the formal ledger will have. It will have the running balance on the side for our purposes. We don’t have a running balance. We have to compute the running balance ourselves so starting with the first transaction journals accounting, journal in accounting first we are going to analyze the transaction journals accounting, journal in accounting .
Fastforward receive $30,000 cash from chase. Taylor in exchange for common stock. What did we learn in. Prior session we learn how to analyze this transaction journals accounting, journal in accounting . We learned that cash went up income and stock went up. Now we need to look at it from a t-account perspective so from a t-account perspective. The two accounts affected our cash and common stock. So this is the cash account and this is the common stock account. Cash is going up if cash is going up. I’m gonna debit journals accounting, journal in accounting cash because when cash goes up cash is an asset cash is gonna go up. I’m gonna credit common stock. Also come and start going up. I credit common stock. Now i journalize. I debit journals accounting, journal in accounting cash 30,000 that common stock 30,000 now technically you journalize. Then you post what. I’m doing I’m using the general ledger as the t-account okay. But you journalize debit journals accounting, journal in accounting cash credit comments that so simply put on the side. You do this key account cash you do this. You put okay cash come and start 30,000 30,000 then you journals accounting, journal in accountingeyes then you post but I’m using the general ledger as my on my side. T account okay so now if I ask you. What is the cash balance. The cash balance is thirty debit journals accounting, journal in accounting balance. What’s the equity common stock. The common stock is thirty thousand. So we just generalize and we posted to the ledger transaction journals accounting, journal in accounting to fast forward pace two thousand five hundred for supplies well if I paid cash cash is gonna go down and supplies gonna go up. This is what. I learned when I analyzed the transaction journals accounting, journal in accounting . Now I need to take this information and turn it into a t-account well if I if I increase supplies supplies as a debit journals accounting, journal in accounting as supplies as an asset. I debit journals accounting, journal in accounting if I reduce cash cash as a credit so this is from the thirty thousand is from the prior balance from the prior from the prior entry from the prior transaction journals accounting, journal in accounting . So if you see those so only look at the red ones from the prior transaction journals accounting, journal in accounting .
Okay so what. I’m gonna do. I’m gonna debit journals accounting, journal in accounting supplies. And the general journals accounting, journal in accountingand I’m gonna credit cash in the general journals accounting, journal in accountingnow if I ask you what is the balance in the cash account well I started with thirty thousand then. I paid 2,500. My balance is twenty thousand twenty seven thousand five hundred my balance in the supplies. Two thousand five hundred. Let’s take a look at this transaction journals accounting, journal in accounting fast-forward pase pase cash twenty six thousand for equipment. So we gave cash. They gave us equipment. Cash will go down. Equipment will go up. They’re both assets so cash will go down is a credit. I’m gonna credit cash and debit journals accounting, journal in accounting equipments on the side. I do this debit journals accounting, journal in accounting cash credit equipment. Now i journalize. I debit journals accounting, journal in accounting my cash in the general journals accounting, journal in accountingand I credit my equipment in the general. Now what’s my balance in cash. My talents in cash went down by 26,000. So my cash is 1,500. My equipment is 26,000. Let’s take a look at this transaction journals accounting, journal in accounting . We purchase seven thousand one hundred of supplies on credit from supplier well. I have more supplies but I have more accounts payable because I bought them on credit. I did not pay cash. So supplies gone up is an asset. I debit journals accounting, journal in accounting supply. Seven thousand one hundred accounts payable as a liability. I have more accounts payable. I credit accounts payable so i debit journals accounting, journal in accounting my supplies and I credit my accounts payable. That’s the general journals accounting, journal in accountingnow if I ask you what is the balance and supplies. It is nine thousand six hundred and you’re gonna see later on that we’re gonna reduce supplies when we use them and what’s my balance in accounts payable seven thousand one hundred you’re gonna see later on when I pay my payable. That’s gonna go down right now. I owe seven thousand one hundred and I owe it the staples so this way we make it a little bit. Realistic fast forward provide consulting services and immediately collect four thousand two hundred cash. What did we learn earlier. When we analyzed this transaction journals accounting, journal in accounting we received cash because we generated revenue so cash will go up but revenue will go up so cash will go up.
Cash takes a debit journals accounting, journal in accounting. I’m gonna debit journals accounting, journal in accounting cash but Avenue. Always go up will takes a credit four thousand two hundred credit so. I’m going to debit journals accounting, journal in accounting my cash. Credit my revenue now if I ask you what is. The cash account. Cash account went up by four thousand two hundred from the prior balance so he add up all the debit journals accounting, journal in accounting. Add up all the credit. Take the difference. What is my consulting revenue. My consulting revenue is 4200 transaction journals accounting, journal in accounting s. Ex fastforward pays one thousand one hundred cash for December rent. Why did I pay the cash for December rent so my cash is gonna go down. My rent always go up. My cash is gonna go down and my rent expense gonna go up rent expense always go up and always takes a debit journals accounting, journal in accounting on can. I have it the debit journals accounting, journal in accounting rent expense and I’m gonna credit cash so I’m gonna credit cash. Debit journals accounting, journal in accounting rent expense. This is going down and this is go up so. I’m gonna debit journals accounting, journal in accounting rent expense in the general journals accounting, journal in accountingin credit cash. What’s my balance in rent. Expense a thousand. What’s my balance in cash. It’s this amount minus this amount in the answer will be here. Transaction journals accounting, journal in accounting seven more payment of expenses a seven hundred cash for employee salary. My cash is can. I go down my salary. Expense gonna go up so this is going up. This is coming down well salary expense always take a debit journals accounting, journal in accounting so. I’m gonna debit journals accounting, journal in accounting salary expense. I’m paying cash. Cash is credited again. The journals accounting, journal in accountingentry debit journals accounting, journal in accounting expense credit cash transaction journals accounting, journal in accounting number eight fast-forward provide consulting services. That’s good of 1600 in rent. Its facilities for three hundred. The customer is billed 1900. Now we did more work we did two type of work we did some consulting work worth one thousand six hundred and we rented some equipment to someone for three hundred for the same clients so in total we have revenue of 1900. Unfortunately the customer did not pay for the revenue the customer the customer build build us. I’m sorry we build the client. They did not pay we build on.
Therefore we’re gonna have account receivable it’s gonna go up because we receive the promised to be paid in the future which is an asset consulting revenue. Always go up. Revenue always go up in rental revenue. Goes up now from a t-account account receivable is an asset so. I’m going to debit journals accounting, journal in accounting account receivable I need credit of 1900 so I credit consulting revenue 1600 and I credit rental revenue of 300 now. I just need to do the journal. Entry i debit journals accounting, journal in accounting account receivable credit in credit revenue. Now if I ask you what is the balance. An account receivable 1900. What’s the balance in consulting revenue 5800. What’s the balance in rental revenue 300. Those are the balances transaction journals accounting, journal in accounting line receipt of cash on account fast-forward receives 1900 cash the client billing in eighth. Well this client pays really quick. We build them here. This is when we build them now. They paid the bill if they paid the bill they paid the bill with cash. Cash will go up account receivable will go down. They’re both assets if cash goes up. I’m gonna debit journals accounting, journal in accounting cash account. Receivable is an asset. It’s gonna go down now my balance an account receivable back to zero now. They don’t owe me anything and this is the entry. I debit journals accounting, journal in accounting cash. Credit account receivable transaction journals accounting, journal in accounting 10 fast forward pace we set staples with the company was called Cal. Tech supply 900 cash toward the payment in transaction journals accounting, journal in accounting for the payment in transaction journals accounting, journal in accounting . The what we did in transaction journals accounting, journal in accounting for payable in transaction journals accounting, journal in accounting for enough payment we bought seven thousand one hundred of supplies on credit. Now we paid 900 our cash will go down and our accounts payable will go down. They both go down so cash will go down takes a credits and accounts payable. Go down takes a debit journals accounting, journal in accounting so. I’m gonna debit journals accounting, journal in accounting my accounts payable and credit my cash. Now if I ask you. What is the balance in accounts payable. So how much do. I still owe what I still owe six thousand two hundred. What’s my balance in cash. You add up all the debit journals accounting, journal in accounting add up all the credit takes.
The difference in the difference is a debit journals accounting, journal in accounting and this is the journals accounting, journal in accountingentry. I debit journals accounting, journal in accounting accounts payable credit cash transaction journals accounting, journal in accounting . 11 fast-forward pays 200 dividend. Well what did I learn when I analyze this transaction journals accounting, journal in accounting . I learned that cash goes down because I paid cash why did I pay. Cash because of dividend dividend goes up so cash goes down dividend always go up like an expense but dividend reduces equity so dividend is part of my DEA dividend is increase on the debit journals accounting, journal in accounting cash reduce on the credit. Let’s journals accounting, journal in accountingeyes. I’m gonna debit journals accounting, journal in accounting dividend and credit cash. Exactly what. I did here. Debit journals accounting, journal in accounting dividend and credit cash. What’s my balance in dividend 200. What’s my balance in cash. Add all the debit journals accounting, journal in accounting at all. The credit. Take the difference. And it’s a debit journals accounting, journal in accounting balance transact in 12 so this is a new transaction journals accounting, journal in accounting fast forward received $3,000 cash cash will go up in advance of providing consulting services. We receive this money in advance before we did the service when we receive the money before we do the service we’re gonna have something called a liability called unearned consulting revenue unearned means. We have not earned the money. We have the money but we haven’t earned it therefore it’s a liability so cash is gonna go up. Cash goes up on the debit journals accounting, journal in accounting so. I’m gonna debit journals accounting, journal in accounting my cash. Unearned rent consulting revenue is a liability liability goes up on the credit to I credit liability so by accepting the 3000 cash. We have an obligation to perform. This obligation to perform is called a liability. Now you’re gonna see later on this liability will go down. When does it go down when we perform the work. And we’re gonna see this later on so we’re gonna debit journals accounting, journal in accounting cash. Credit consulting revenue debit journals accounting, journal in accounting cash credit consulting revenue transaction journals accounting, journal in accounting 13 fast-forward pays 2,400 cash. Cash will go down insurance premium for 24 month insurance coverage start. December 1st if I paid cash cash is gonna go down what did I pay cash for for insurance now. I paid an advance for two years.
This is called the prepaid insurance so this is a prepaid prepaid our assets. Okay so cash is gonna go down. Prepaid this is an asset as that goes up by a debit journals accounting, journal in accounting nasod goes down by a credit cash. Goes down now. What’s my balance in prepaid my balance in prepaid is two thousand four hundred and with it what did I say about the prepaid earlier and in a prior session that prepaid eventually go down and determine to an expense which we’ll see later on. Okay so this is the journals accounting, journal in accountingentry. I debit journals accounting, journal in accounting prepaid credit cash transaction journals accounting, journal in accounting 14. I purchase supplies for cash so I used cash to buy supplies. What’s gonna happen to my cash. It’s gonna go down and my supplies is gonna go up. Supplies will go up on the debit journals accounting, journal in accounting because supplies is an asset. And it’s going up now. I have more supplies. Cash is an asset. It’s gonna go down. It goes down the credit. Now what’s my balance and supplies 7220. That’s seven thousand. Seven thousand six seven thousand seven hundred and twenty if my math is right. No it’s more than that. It’s nine thousand. Six hundred and nine thousand seven hundred and twenty 97 20 my balance and supplies 97 20. What’s my balance in cash at all the debit journals accounting, journal in accounting and all the credits and the difference is that so. I’m gonna debit journals accounting, journal in accounting supplies. Credit cash payment of expense in cash fast forward pays three hundred and five dollar for the December utilities if I paid cash cash goes down if I paid for my allotted utility expense expenses. Go up cash goes down expense goes up. I debit journals accounting, journal in accounting expenses because expenses always go up on the debit journals accounting, journal in accounting and since cash going down. I credit cash. I debit journals accounting, journal in accounting expense credit cash. What’s my balance in utilities 305. What’s my balance in my cash. Had all the credits had all the debit journals accounting, journal in accounting and the difference is a debit journals accounting, journal in accounting payment of more expenses in cash paid $700 cash in employee salary for work performed in the later part of December. I paid cash. Cash will go down for an expense expense goes up expense takes a debit journals accounting, journal in accounting now. My salaries expense so far is 1400 1400 1400 and.
I paid in cash. Cash will go down once again if I add up all my debit journals accounting, journal in accounting subtract my credit the balance in cash will be a debit journals accounting, journal in accounting so I debit journals accounting, journal in accounting expense credit cash and this as a summary for all the balances so after I add up all my data set up all my credits. The balance in cash is 40 to 75 the balance in account receivables zero debit journals accounting, journal in accounting balance the balance and supplies 97 20 the balance in prepaid 2400 the balance and equipment. 26,000 all these balances are debit journals accounting, journal in accounting balances. Because assets increase on the debit journals accounting, journal in accounting and they will have a debit journals accounting, journal in accounting balance liabilities accounts payable 6,200 credit and earned revenue 3000 credit total cred total balance of total liabilities of nine thousand two hundred common stock a credit balance dividend debit journals accounting, journal in accounting balance consulting revenue five thousand eight hundred credit rental revenue three hundred credit salaries expense one thousand four hundred debit journals accounting, journal in accounting rent expense. One thousand dabit utilities expense three fifty if I add up common stock – dividend plus revenues minus expenses will give me equity of thirty three thousand 195 liabilities plus equity should equal to your assets. Now what we do. We take this information the ending balances and we’re gonna prepare a trial balance in the next session. I will discuss this trial balance but all the numbers from the trial balance. Now you know. They’re coming from the general ledger for each account. There is a debit journals accounting, journal in accounting column. There’s a credit column and this is what. I’ll pick up next session talking about the trial balance and the financial statements as always. I would like to remind you to visit my website if you’re interested in additional resources and you’re studying for your courses or especially if you’re studying for your CPA exam you’re gonna study for your exam once it’s a lifetime investment visit my website study hard accounting journals accounting, journal in accounting this worth it good luck.
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