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Chapter 6

Chapter_6_Review.docx

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Department
Commerce
Course
COMMERCE 1BA3
Professor
Laura Parker
Semester
Fall

Description
Chapter 6 Review JOURNAL BASICS The Journal is a book where accounting entries for transactions are first recorded before ledger Accounting entries in a journal are called journal entries and are recorded separately in chronological order JOURNAL BREAKDOWN  DATE, PARTICULAR, POSTING REFERENCE, DEBITS, CREDITS DATE – year: once per page at top; posted again only if change in year occurs DATE – month: once per page at top; posted again only if change in month occurs DATE – date: at every transaction, even if repeated Steps in Journalizing 1 – Enter page number; enter date 2 – Enter debit amount and particular 3 – Enter credit amount and particular (indent credit particular) 4 – Write brief explanation Usefulness of Journal To provide continuous record of entries chronologically Accounting clerk collects data from source documents and organizes them into a journal for readability A proper job done at this stage, can reduce accounting errors The journal is useful for references to verify transactions and when checking mistakes Opening Entry sets of financial position of a business on the first page of journal SOURCE DOCUMENTS Source Document are documents which show nature of transaction and gives info to account it properly Information for journal entries is taken from source documents Accounting department learn of transactions of businesses from these business documents For transactions without source documents: memos, calculations, or old documents work Usually multiple copies of source documents are made for reference (customer, business, middlemen) In sales transactions, person who sells known as vendor, person who buys known as purchaser Types of Source Documents 1. Cash Sales Slip – source document; details of transaction which goods/services sold for cash 2. Sales Invoice – source document; details of transaction which goods/services sold on account Chapter 6 TEST Review Kosalan Akilan 3. Point of Sale Terminal – source document; computerized sales register; allows for exchange of funds electronically (POS) terminal used when credit and debit cards are used Always debit bank and credit sales for (POS) terminal (POS) summary shows the sales activities of the terminal; types are host reconciliation or transaction log Transaction log – by POS terminal; detailed information about the transa
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