menu
bartleby
search
close search
Hit Return to see all results

How do I properly journalize a accounting cycle?

Question

How do I properly journalize a accounting cycle?

check_circleAnswer
Step 1

Note: Journalizing is one of the steps of an accounting cycle. Hence, journalizing of accounting transactions is explained below.

Accounting cycle is a process of recognizing, examining and recording the events of a company in monetary terms. It is a process which is carried out step by step of recording the transactions and presenting the data in the form of income statement, cash flow statement and balance sheet etc.

Step 2

Answer:

Journalizing is a process identifying and recording the transactions of business in the books of accounts in a chronological order. The accountant needs to recognize and examine the transactions that affects the business and record each entry in a journal accompanied by date and description of the transaction. The entries are recorded as the Debit balances and Credit balances.

The golden rules of accounting that are needed to be kept in mind for journalizing:

  1. Personal account: The receiver needs to be debit; the giver needs to be credit.
  2. Real account: What comes in needs to be debit; what goes out needs to be credit”
  3. Nominal account: All expenses and losses need to be debit; all incomes and gains needs to be credit.”
Step 3

For example:

Journalize the following transaction:

  1. A started business with cash $120,000.
  2. A withdrew $4,000 for personal use.
  3. Goods ...
Journal entries in the books of A.
Date Accounts title and explanation
Debit
Credit
$
$120,000
1.
Cash
$120,000
Capital
(Being cash brought into the
business)
2
Drawings
$4,000
Cash
$4,000
(Cash withdrawn for personal
use
3
$20,000
Purchases
$20,000
Cash
(Goods purchased for cash)
$10,000
4.
Cash
$10,000
Sales
Goods sold for cash)
help_outline

Image Transcriptionclose

Journal entries in the books of A. Date Accounts title and explanation Debit Credit $ $120,000 1. Cash $120,000 Capital (Being cash brought into the business) 2 Drawings $4,000 Cash $4,000 (Cash withdrawn for personal use 3 $20,000 Purchases $20,000 Cash (Goods purchased for cash) $10,000 4. Cash $10,000 Sales Goods sold for cash)

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Our solutions are written by experts, many with advanced degrees, and available 24/7

See Solution
Tagged in

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: is the answer correct?

A: Material spending variance is the total variance on the materials and includes both material purchas...

question_answer

Q: Why are cash equivalents included with cash in a statement of cash flows?

A: Cash equivalents: Instead of keeping idle cash during high interest rates, the companies invest cash...

question_answer

Q: Savallas Company is highly automated and uses computers to control manufacturing operations. The com...

A: Click to see the answer

question_answer

Q: I would like help with question number 4 and 5   Andretti Company has a single product called a Dak....

A: Product Costing: Accounting process to determine the total cost incurred to manufacture a product on...

question_answer

Q: Problem 14-2Concord Co. is building a new hockey arena at a cost of $2,620,000. It received a downpa...

A: Calculate Issue price of the bonds. 

question_answer

Q: Most Company has an opportunity to invest in one of two new projects. Project Y requires a $320,000 ...

A: We can calculate the net present value as follows : 

question_answer

Q: What is imputed interest?

A: Interest: Interest is a charge against the amount due, Interest is paid on the amount borrowed as a ...

question_answer

Q: Hi, I attempted this problem but did not get the correct values for part 2 (balances of the inventor...

A: 2.Calculate raw material ending balance: 

question_answer

Q: Calculate activity measures The following information was available for the year ended December 31, ...

A: Inventory turnover: Inventory Turnover Ratio measures the company’s ability to sell its inventory, i...

Sorry about that. What wasn’t helpful?