Week 3

Business document from which information for journal entry is obtained.

Transaction generates source document. Each transaction must have a source

document as proof. Business must have objective evidence that

transaction actually occurred. Source document contains information

necessary for journalizing.

Check: document ordering bank to pay cash. Business records check information on check stub.

Invoice: document that describes goods or services sold, quantity, price.◦ Sales invoice: recording customer sale on account

Receipt: document acknowledging cash received by business.

Memorandum: document on which a message is written describing a transaction.

Book of original entry. Used to record transactions in chronological

order (by date). Information from source documents is used

to add transactions. Known as an entry. Recording information in a journal is known

as journalizing. There are different kinds of journals used to

record different kinds of transactions. General journal: record any transaction.

Each transaction recorded in the journal will identify the accounts affected (usually 2).

Each transaction recorded in the journal will identify the debit and credit parts.

Helps ensure debits = credits.

Every journal page must be numbered.

All transactions must have a date.

Source document information added here.

Account title identifies affected account. Always list debited account first.

Questions?