Difference between pages "Accounting Process" and "General Journal"

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Whether you are using leather bound books, excel or software, the accounting/bookkeeping process remains the same.
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General Journal - All the financial transactions are recorded in chronological order where each transaction affects at least two accounts, and they must balance
  
It is simply the recording of all financial transactions within a business and then organising it a meaning full way for compliance and business analysis.
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'''Note:''' each entry must only contain one single transaction (source document)
  
All bookkeeping is still based on double entry accounting. All the software still works this way, its just that we don't see much of it anymore. Understanding the process though is one major difference between a data entry person and a great bookkeeper.
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====Examples: Not Registered for GST====
  
All accounts must be either debited or credited '''NOTE:''' Some accounts are increased by debits, others are increased by credits
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1. Shopping trip to The Office Depot - Purchased a stapler (cash/eftpos)
  
{| class="wikitable" style="width: 25%;"
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{| class="wikitable" style="width: 50%;"
 +
!colspan="4"|General Journal Example (Simple)
 
|-
 
|-
|'''Account''' || '''Increased By''' || '''Decreased By'''
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|'''Date'''
|-
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|'''Account'''
|Assets|| ''Debit''|| ''Credit''
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|'''Debit'''
 +
|'''Credit'''
 
|-
 
|-
|Expenses||''Debit''||''Credit''
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|June 30
 +
|Stationery
 +
| style="text-align:right;" | 1,100
 +
|
 
|-
 
|-
|Liabilities||''Credit''||''Debit''
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|
 +
| style="text-align:center;" | Cash At Bank
 +
|
 +
| style="text-align:right;" | 1,100
 
|-
 
|-
|Equity||''Credit''||''Debit''
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|
 +
|For the purchase of a really nice stapler
 +
|
 +
|
 +
|}
 +
<br>
 +
2. Shopping trip to The Office Depot - Purchased a stapler and some water for the staff room (cash/eftpos)
 +
{| class="wikitable" style="width: 50%;"
 +
!colspan="4"|General Journal Example (Less Simple)
 
|-
 
|-
|Revenue||''Credit''||''Debit''
+
|'''Date'''
 +
|'''Account'''
 +
|'''Debit'''
 +
|'''Credit'''
 +
|-
 +
|June 30
 +
|Stationery
 +
| style="text-align:right;" | 1,100
 +
|
 +
|-
 +
|
 +
|Staff Amenities
 +
| style="text-align:right;" | 200
 +
|
 +
|-
 +
|
 +
| style="text-align:center;" | Cash At Bank
 +
|
 +
| style="text-align:right;" | 1,300
 +
|-
 +
|
 +
|For the purchase of a really nice stapler and water
 +
|
 +
|
 
|}
 
|}
 +
<br>
 +
3. Shopping trip to <br>The Office Depot - Purchased a stapler and some sugar for the staff room (cash/eftpos)<br>The Techno Junkies - Purchased a new cable (on account)
 +
{| class="wikitable" style="width: 50%;"
 +
!colspan="4"|General Journal Example (Less Simple)
 +
|-
 +
|'''Date'''
 +
|'''Account'''
 +
|'''Debit'''
 +
|'''Credit'''
 +
|-
 +
|June 30
 +
|Stationery
 +
| style="text-align:right;" | 1,100
 +
|
 +
|-
 +
|
 +
|Staff Amenities
 +
| style="text-align:right;" | 200
 +
|
 +
|-
 +
|
 +
| style="text-align:center;" | Cash At Bank
 +
|
 +
| style="text-align:right;" | 1,300
 +
|-
 +
|
 +
|For the purchase of a really nice stapler and water
 +
|
 +
|
 +
|-
 +
|June 30
 +
|Computer Expense
 +
| style="text-align:right;" | 440
 +
|
 +
|-
 +
|
 +
|style="text-align:center;" | Accounts Payable
 +
|
 +
| style="text-align:right;" | 440
 +
|-
 +
|
 +
|New computer cable
 +
|
 +
|
 +
|}
 +
====Examples: Registered for GST====<br>
 +
1. Shopping trip to The Office Depot - Purchased a stapler (cash/eftpos)
  
These are generally the steps taken:
+
{| class="wikitable" style="width: 50%;"
* [[General Journal]] - All the financial transactions are recorded in chronological order where each transaction affects at least two accounts, and they ''must'' balance.
+
!colspan="4"|General Journal Example (Simple)
 
+
|-
* [[General Ledger]] - The transactions are now posted to the accounts identified in the Journal entry
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|'''Date'''
 
+
|'''Account'''
''' <span style="color: red"> more to come'''
+
|'''Debit'''
 +
|'''Credit'''
 +
|-
 +
|June 30
 +
|Stationery
 +
| style="text-align:right;" | 1,000
 +
|
 +
|-
 +
|
 +
|GST Payable
 +
| style="text-align:right;" | 100
 +
|
 +
|-
 +
|
 +
| style="text-align:center;" | Cash At Bank
 +
|
 +
| style="text-align:right;" | 1,100
 +
|-
 +
|
 +
|For the purchase of a really nice stapler
 +
|
 +
|
 +
|}
 +
<br>
 +
2. Shopping trip to The Office Depot - Purchased a stapler and some water for the staff room (cash/eftpos)
 +
{| class="wikitable" style="width: 50%;"
 +
!colspan="4"|General Journal Example (Less Simple)
 +
|-
 +
|'''Date'''
 +
|'''Account'''
 +
|'''Debit'''
 +
|'''Credit'''
 +
|-
 +
|June 30
 +
|Stationery
 +
| style="text-align:right;" | 1,000
 +
|
 +
|-
 +
|
 +
|Staff Amenities
 +
| style="text-align:right;" | 200
 +
|
 +
|-
 +
|
 +
|GST Payable
 +
| style="text-align:right;" | 100
 +
|
 +
|-
 +
|
 +
| style="text-align:center;" | Cash At Bank
 +
|
 +
| style="text-align:right;" | 1,300
 +
|-
 +
|
 +
|For the purchase of a really nice stapler and water
 +
|
 +
|
 +
|}
 +
<br>
 +
3. Shopping trip to <br>The Office Depot - Purchased a stapler and some sugar for the staff room (cash/eftpos)<br>The Techno Junkies - Purchased a new cable (on account)
 +
{| class="wikitable" style="width: 50%;"
 +
!colspan="4"|General Journal Example (Less Simple)
 +
|-
 +
|'''Date'''
 +
|'''Account'''
 +
|'''Debit'''
 +
|'''Credit'''
 +
|-
 +
|June 30
 +
|Stationery
 +
| style="text-align:right;" | 1,000
 +
|
 +
|-
 +
|
 +
|Staff Amenities
 +
| style="text-align:right;" | 200
 +
|
 +
|-
 +
|
 +
|GST Payable
 +
| style="text-align:right;" | 100
 +
|
 +
|-
 +
|
 +
| style="text-align:center;" | Cash At Bank
 +
|
 +
| style="text-align:right;" | 1,300
 +
|-
 +
|
 +
|For the purchase of a really nice stapler and water
 +
|
 +
|
 +
|-
 +
|June 30
 +
|Computer Expense
 +
| style="text-align:right;" | 400
 +
|
 +
|-
 +
||
 +
|GST Payable
 +
| style="text-align:right;" | 40
 +
|
 +
|-
 +
|
 +
|style="text-align:center;" | Accounts Payable
 +
|
 +
| style="text-align:right;" | 440
 +
|-
 +
|
 +
|New computer cable
 +
|
 +
|
 +
|}

Revision as of 06:13, 15 November 2018

General Journal - All the financial transactions are recorded in chronological order where each transaction affects at least two accounts, and they must balance

Note: each entry must only contain one single transaction (source document)

Examples: Not Registered for GST

1. Shopping trip to The Office Depot - Purchased a stapler (cash/eftpos)

General Journal Example (Simple)
Date Account Debit Credit
June 30 Stationery 1,100
Cash At Bank 1,100
For the purchase of a really nice stapler


2. Shopping trip to The Office Depot - Purchased a stapler and some water for the staff room (cash/eftpos)

General Journal Example (Less Simple)
Date Account Debit Credit
June 30 Stationery 1,100
Staff Amenities 200
Cash At Bank 1,300
For the purchase of a really nice stapler and water


3. Shopping trip to
The Office Depot - Purchased a stapler and some sugar for the staff room (cash/eftpos)
The Techno Junkies - Purchased a new cable (on account)

General Journal Example (Less Simple)
Date Account Debit Credit
June 30 Stationery 1,100
Staff Amenities 200
Cash At Bank 1,300
For the purchase of a really nice stapler and water
June 30 Computer Expense 440
Accounts Payable 440
New computer cable

====Examples: Registered for GST====
1. Shopping trip to The Office Depot - Purchased a stapler (cash/eftpos)

General Journal Example (Simple)
Date Account Debit Credit
June 30 Stationery 1,000
GST Payable 100
Cash At Bank 1,100
For the purchase of a really nice stapler


2. Shopping trip to The Office Depot - Purchased a stapler and some water for the staff room (cash/eftpos)

General Journal Example (Less Simple)
Date Account Debit Credit
June 30 Stationery 1,000
Staff Amenities 200
GST Payable 100
Cash At Bank 1,300
For the purchase of a really nice stapler and water


3. Shopping trip to
The Office Depot - Purchased a stapler and some sugar for the staff room (cash/eftpos)
The Techno Junkies - Purchased a new cable (on account)

General Journal Example (Less Simple)
Date Account Debit Credit
June 30 Stationery 1,000
Staff Amenities 200
GST Payable 100
Cash At Bank 1,300
For the purchase of a really nice stapler and water
June 30 Computer Expense 400
GST Payable 40
Accounts Payable 440
New computer cable