2-1
Chapter 2
The Recording
Process
Slide
2-4
The Account
Slide
2-5 SO 1 Explain what an account is and how it helps in the recording process.
The Account
Account Name
Debit / Dr. Credit / Cr.
Balance $15,000
Account Name
Debit / Dr. Credit / Cr.
Balance $1,000
Assets Chapter
Equity
3-24
Normal Balance
Normal Balance
Chapter
Expense
3-23
Revenue
Chapter
3-25
Normal Balance
Normal Balance
Chapter
3-27 Chapter
3-26
Slide
2-9 SO 2
Debits and Credits Summary
Debit
Credit
Review Question
Debits:
a. increase both assets and liabilities.
b. decrease both assets and liabilities.
c. increase assets and decrease liabilities.
d. decrease assets and increase liabilities.
Assets
Debit / Dr. Credit / Cr.
Assets - Debits should
exceed credits.
Normal Balance
Chapter
3-23
Liabilities – Credits
should exceed debits.
Liabilities
Debit / Dr. Credit / Cr.
The normal balance is on
the increase side.
Normal Balance
Chapter
3-24
Normal Balance
Chapter
3-27
Illustration 2-12
Review Question
Accounts that normally have debit balances are:
a. assets, expenses, and revenues.
b. assets, expenses, and retained earnings.
c. assets, liabilities, and dividends.
d. assets, dividends, and expenses.
Slide
2-18 SO 3 Identify the basic steps in the recording process.
Steps in the Recording Process
Journalizing
Book of original entry.
General Journal
Date Account Title Ref. Debit Credit
Sept. 1 Cash 15,000
Share capital 15,000
General Journal
Date Account Title Ref. Debit Credit
Sept. 1 Delivery equipment 14,000
Cash 8,000
Accounts payable 6,000
Slide Solution on
2-21 notes page
SO 4
Steps in the Recording Process
The Ledger
General Ledger
All accounts maintained by a company.
All asset, liability, equity, revenue and expense accounts.
Illustration 2-16
Slide
2-22
SO 5 Explain what a ledger is and how it helps in the recording process.
Answer on
notes page
Slide
2-23
SO 5 Explain what a ledger is and how it helps in the recording process.
The Ledger
Slide
2-24
SO 5 Explain what a ledger is and how it helps in the recording process.
The Ledger
Chart of Accounts
Illustration 2-18
Slide
2-25 SO 5 Explain what a ledger is and how it helps in the recording process.
Posting
Posting – the
process of
transferring
amounts from
the journal to
the ledger
accounts.
Illustration 2-19
Slide
2-26 SO 6 Explain what posting is and how it helps in the recording process.
The Recording Process Illustrated
Follow these steps:
1. Determine what
type of account
is involved.
2. Determine what
items increased
or decreased and
by how much.
3. Translate the
increases and
decreases into
debits and
credits.
Illustration 2-20
Slide
2-27 SO 6 Explain what posting is and how it helps in the recording process.
The Recording Process Illustrated
Illustration 2-21
Slide
2-28 SO 6 Explain what posting is and how it helps in the recording process.
The Recording Process Illustrated
Illustration 2-22
Slide
2-29 SO 6
The Recording Process Illustrated
Illustration 2-23
Slide
2-30 SO 6
The Recording Process Illustrated
Illustration 2-24
Slide
2-31 SO 6
The Recording Process Illustrated
Illustration 2-25
Slide
2-32 SO 6
The Recording Process Illustrated
Illustration 2-26
Slide
2-33 SO 6 Explain what posting is and how it helps in the recording process.
The Recording Process Illustrated
Illustration 2-27
Slide
2-34 SO 6
The Recording Process Illustrated
Illustration 2-28
Slide
2-35 SO 6
The Recording Process Illustrated
Illustration 2-29
Slide
2-36 SO 6
Posting
Review Question
Posting:
a. normally occurs before journalizing.
b. transfers ledger transaction data to the journal.
c. is an optional step in the recording process.
d. transfers journal entries to ledger accounts.
Solution on
notes page
Slide
2-37 SO 6 Explain what posting is and how it helps in the recording process.
The Recording Process Illustrated
Katherine Turner recorded the following
transactions during the month of March.
Slide Solution on
2-38 notes page SO 6
The Trial Balance
Illustration 2-32
A list of accounts
and their
balances at a
given time.
Purpose is to
prove that debits
equal credits.
Slide
2-39 SO 7 Prepare a trial balance and explain its purposes.
The Trial Balance
Slide
2-40 SO 7 Prepare a trial balance and explain its purposes.
Answer on
Slide
2-41 notes page SO 7 Prepare a trial balance and explain its purposes.
The Trial Balance
The accounts
come from the
ledger of Christel Corporation
Trial Balance (in thousands)
Christel December 31, 2011
Corporation at
December 31,
2011.
Slide Solution on
2-42 notes page SO 7