1.

02 CONTENT NOTES

I. Double-Entry Accounting
A. Recording the debit and credit parts of a transaction is called double-entry
accounting.
1. Every transaction affects at least two accounts.
2. Debits must equal credits.
B. A journal is a form that is used to record transactions in chronological order.
C. The process of recording the transactions in a journal is called journalizing.
D. A journal that has two amount columns that can contain a variety of different
transactions is called a general journal.
E. An entry is recorded in the journal for each transaction. An entry consists of
four parts: date, debit, credit, and source document.

II. Source Documents

A. Business papers that contain information that is needed to record journal
entries
1. Check/Check stub – Orders a bank to pay cash from a bank account. It
contains the date, amount, the name of the payee to whom the check was
written and what the check purchased. The check stub is the record of
information on a check and shows the balance of the account.
2. Invoice/Bill – Contains the date of the transaction, quantity, description and
cost of each item and the payment terms.
(Note: Glencoe uses this term to show buying supplies on account for the
service business.)
3. Sales invoice – An invoice that is used to record a sale on account.
(Note: Southwestern uses this term for all sales on account transactions
and does not use the term Invoice. Glencoe uses this term to record all
sales on account transactions. Also, Glencoe uses Sales Slip and Sales
Ticket in Chapter 14 for a merchandising business.)
4. Receipt – Shows the date payment was made, the name of the person or
business that paid and the amount paid.
5. Memorandum – Contains a brief message describing a transaction. Often
used when there is no other type of source document.
6. Calculator tape/cash register tape – A calculator/cash register tape is used
to calculate the total cash sales at the end of a day.
B. An entry cannot be recorded unless there is a source document since the
source document proves the transaction occurred. This is called the
Objective Evidence accounting concept.

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1.02 Key Terms

Term Definition
Source Document Terms
A business paper that contains the information needed to
Source document
record the journal entry
A business form that orders a bank to pay cash from a bank
account. It contains the date, amount, the name of the
Check/check stub payee to whom the check was written and what the check
purchased. The check stub is the record of information on a
check and shows the balance of the account.
Contains the date of the transaction, quantity, description
and cost of each item and payment terms. (Glencoe uses
Invoice/bill
this term to show buying supplies on account for the service
business.)
An invoice that is used to record a sale on account. Can
also use the terms Sales Slip and Sales Ticket.
(Southwestern uses this term for all sales on account and
Sales invoice does not use the term Invoice. Glencoe uses this term to
record all sales on account transactions. Also, Glencoe
uses the terms Sales Slip and Sales Ticket for a
merchandising business.)
Shows the date payment was made, the name of the person
Receipt
or business that paid and the amount paid
A form that contains a brief message describing a
Memorandum transaction. Often used when there is no other type of
source document
Double-Entry Accounting Terms
Recording the debit and credit part of a transaction. Every
Double-entry accounting transaction affects at least two accounts. Debits must equal
credits
A form that is used to record transactions in chronological
Journal
order

Journalizing The process of recording the transactions in a journal

A journal that has two amount columns that can contain a

General journal
variety of different transactions
Consists of four parts: date, debit, credit and source
Entry
document and is recorded in the journal for each transaction

6311 Accounting I Summer 2010, Version 2 Page 2

1.02 Understanding Source Documents

GENERAL JOURNAL PAGE 1

1 2

DOC POST
DATE ACCOUNT TITLE DEBIT CREDIT
# REF

1 Aug 3 Supplies C1 275.00 1

2 Cash 275.00 2

GENERAL JOURNAL PAGE 4

1 2

DOC POST
DATE ACCOUNT TITLE DEBIT CREDIT
# REF

1 Aug 12 Accounts Receivable/Oakdale School S1 350.00 1

2 Cash 350.00 2

GENERAL JOURNAL PAGE 2

1 2

DOC POST
DATE ACCOUNT TITLE DEBIT CREDIT
# REF

1 Aug 1 Cash R1 5,000.00 1

2 Kim Park, Capital 5,000.00 2

6311 Accounting I Summer 2010, Version 2 Page 3

1.02 Understanding Source Documents – Page 2 –

GENERAL JOURNAL PAGE 3

1 2

DOC POST
DATE ACCOUNT TITLE DEBIT CREDIT
# REF

1 Aug 7 Supplies M1 500.00 1

2 Accounts Payable/Supply Depot 500.00 2

GENERAL JOURNAL PAGE 2

1 2

DOC POST
DATE ACCOUNT TITLE DEBIT CREDIT
# REF

1 Aug 12 Cash T12 295.00 1

2 Sales 295.00 2

6311 Accounting I Summer 2010, Version 2 Page 4