Analyzing Transactions
6542– SRI HANDAYANI, SE, MM, MAk, CPMA
PROGRAM STUDI MANAJEMEN & AKUNTANSI FAKULTAS EKONOMI DAN BISNIS
UNIVERSITAS ESA UNGGUL
FEB103 PENGANTAR AKUNTANSI I +
LAB
Mahasiswa mampu melakukan analisis
transaksi, mencatat transaksi ke
dalam jurnal umum dan dampaknya
terhadap kondisi fnancial perusahaan
TKT306 - Perancangan Tata Letak Fasilitas 6623 - Taufqur Rachman 2
Chapter
2
Analyzing Transactions
Accounting,
21st EditionWarren Reeve Fess
PowerPoint Presentation by Douglas Cloud
Professor Emeritus of Accounting Pepperdine University
© Copyright 2004 South-Western, a division of Thomson Learning. All rights reserved.
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1.
Explain why accounts are used to
record and summarize the efects of
transactions on fnancial statements.
2.
Describe the characteristics of an
account.
3.
List the rules of debit and credit and
the normal balances of accounts.
4.
Analyze and summarize the fnancial
statement efects of transactions.
Objectives
Objectives
After studying this
chapter, you should
be able to:
After studying this
chapter, you should
5.
Prepare a trial balance and explain
how it can be used to discover
errors.
6.
Discover errors in recording
transactions and correct them.
7.
Use horizontal analysis to compare
fnancial statements from diferent
periods.
Objectives
Each financial statement
item, called an
account
,
is
included in the ledger.
Each financial statement
item, called an
account
,
is
A group of
accounts for a
business entity is
called a
ledger.
A group of
accounts for a
business entity is
A list of the
accounts in a ledger
is called a
chart of
accounts.
A list of the
accounts in a ledger
is called a
chart of
Major Account Classifications
Assets are
resources owned
by the business.
Assets
are
resources owned
by the business.
Liabilities are debts
owed to outsiders
(creditors).
Liabilities
are debts
Major Account Classifications
Liabilities are debts
owed to outsiders
(creditors).
Liabilities
are debts
owed to outsiders
(creditors).
Assets are
resources owned
by the business.
Assets
are
resources owned
by the business.
Liabilities are often identified
on the balance sheet by titles
that include
payable
.
Liabilities are often identified
on the balance sheet by titles
Owner’s equity
Revenues are
increases in
owner’s equity as
a result of selling
services or
products.
Revenues
are
increases in
owner’s equity as
a result of selling
services or
products.
Chris Clark,
Capital
Chris Clark,
Drawing
Fees Earned
Fares Earned
Commission
Revenue
Expenses are the
using up of assets
or consuming of
services to
generate revenue.
Expenses
are the
using up of assets
or consuming of
services to
generate revenue.
Rent Expense
Salary Expense
Utilities
Expense
To assist you in learning,
an account can be drawn
to resemble the letter T.
To assist you in learning,
an account can be drawn
The T-Account
The T-Account
The T-account has a title.
The T-account has a title.
The T-Account
The T-Account
The left side of the account is the
debit
side.
The left side of the account is the
debit
side.
Cash
Left side
The T-Account
The T-Account
The right side of the account is the
credit
side.
The right side of the account is the
credit
side.
Cash
Left side
debit
Right side
The T-Account
The T-Account
Cash
3,750
4,300
2,900
850
1,400
700
2,900
Balancing a T-Account
Cash
3,750
4,300
2,900
850
1,400
700
2,900
10,950
First, foot
the debit
side.
First, foot
the debit
850
1,400
700
2,900
Cash
3,750
4,300
2,900
10,950
5,850
Next, foot the
credit side.
850
Subtract total credits
from total debits to
obtain the account
balance.
Subtract total credits
from total debits to
obtain the account
balance.
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 1
Chris Clark, Capital 25 000 00
Invested cash in NetSolutions.
(A) On November 1, Chris Clark
deposits $25,000 in a bank account
in the name of NetSolutions.
(A) On November 1, Chris Clark
(A) On November 1, Chris Clark
deposits $25,000 in a bank account
in the name of NetSolutions.
(A) On November 1, Chris Clark
deposits $25,000 in a bank account
in the name of NetSolutions.
Effects of this entry in the Ledger
Cash
Nov. 1 25,000 Nov. 1 25,000
4
Purchased land for building site.
(B) On November 5,
NetSolutions bought land
for $20,000, paying cash.
(B) On November 5,
Effects of this entry in the Ledger
Cash
Nov. 1 25,000 Nov. 5 20,000
Land
Nov. 5 20,000
(B) On November 5,
NetSolutions bought land
for $20,000, paying cash.
(B) On November 5,
10
Accounts Payable 1 350 00
Purchased supplies on account.
(C) On November 10, NetSolutions
purchased supplies on account
for $1,350.
(C) On November 10, NetSolutions
purchased supplies on account
for $1,350.
(C) On November 10, NetSolutions
purchased supplies on account
for $1,350.
Effects of this entry in the Ledger
Supplies
Nov. 10 1,350
Accounts Payable
30 Accounts Payable 950 00
Cash 950 00
Paid creditors on account.
30 31 32 33 34 35 36
(F) On November 30, NetSolutions
paid creditors on account, $950.
Cash
Nov. 1 25,000 Nov. 5 25,000 18 7,500 30 3,650
Effects of this entry in the Ledger
Accounts Payable
Nov. 10 1,350
Nov. 30 950 30 950
(F) On November 30, NetSolutions
paid creditors on account, $950.
Debits
Credits
Asset accounts……….
Increase (+)
Decrease (-)
Liability accounts……
Decrease (-)
Increase (+)
Owner’s equity
(capital)
accounts….
Decrease (-)
Increase (+)
Credit for
increases
(+)
Credit for
increases
(+)
Credit for
decreases
(-)
Debit for
increases
(+)
Debit for
decreases
(-)
Debit for
decreases
(-)
ASSETS
Asset Accounts
Liability Accounts
LIABILITIES
Owner’s Equity Accounts
OWNER’S EQUITY
(D) On November 18, NetSolutions
received fees of $7,500 from
customers for services provided .
(D) On November 18, NetSolutions
received fees of $7,500 from
customers for services provided .
18 Cash 7 500 00
Fees Earned 7 500 00
Received fees from customers.
Effects of this entry in the Ledger
Cash
Nov. 1 25,000 Nov. 5 25,000
Fees Earned
Nov. 18 7,500 18 7,500
(D) On November 18, NetSolutions
received fees of $7,500 from
customers for services provided .
(D) On November 18, NetSolutions
received fees of $7,500 from
(E) Throughout the month, NetSolutions
incurred the following expenses:
wages, $2,125; rent, $800; utilities,
$450; and miscellaneous, $275 .
(E) Throughout the month, NetSolutions
incurred the following expenses:
wages, $2,125; rent, $800; utilities,
$450; and miscellaneous, $275 .
30 Wages Expense 2 125 00
Rent Expense 800 00
Utilities Expense 450 00 Miscellaneous Expense 275 00
Effects of this entry in the Ledger
Cash
Nov. 1 25,000 Nov. 5 25,000
Wages Expense
Nov. 30 2,125
18 7,500
(E) Throughout the month, NetSolutions
incurred the following expenses:
wages, $2,125; rent, $800; utilities,
$450; and miscellaneous, $275 .
(E) Throughout the month, NetSolutions
incurred the following expenses:
In every entry the sum of
the debits always equal
the sum of the credits.
In every entry the sum of
the debits always equal
(G) On November 30, a count revealed
that $800 of the supplies inventory
had been used.
(G) On November 30, a count revealed
that $800 of the supplies inventory
had been used.
30 Supplies Expense 800 00
Supplies 800 00
Effects of this entry in the Ledger
Supplies
Nov. 10 1,350
Supplies Expense
Nov. 30 800 Nov. 30 800
(G) On November 30, a count revealed
that $800 of the supplies inventory
had been used.
Double-Entry Accounting
Double-Entry Accounting
“ Double-entry accounting is based on a simple concept: each party in a business transaction will receive something and give something in return. In bookkeeping terms, what is received is a debit and what is given is a credit. The T account is a representation of a scale or
Credit for
increases
(+)
Credit for
decreases
(-)
Debit for
increases
(+)
Debit for
decreases
(-)
Expense Accounts
Revenue Accounts
Debits
Credits
Revenue accounts……
Decrease (-)
Increase (+)
Expense accounts……
Increase (+)
Decrease (-)
Withdrawals
by the
Owner
Withdrawals
by the
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 2
1 2 3 4
Nov. 302005 Chris Clark, Drawing 2 000 00
Cash 2 000 00
Chris Clark withdrew cash for personal use.
(H) On November 30, Chris Clark
withdrew $2,000 in cash from
NetSolutions for personal use.
30 950
30 2,000
Cash
Nov. 1 25,000 Nov. 5 25,000 18 7,500 30 3,650
Effects of this entry in the Ledger
Chris Clark, Drawing
Nov. 10 1,350
Nov. 30 2,000
(H) On November 30, Chris Clark
withdrew $2,000 in cash from
NetSolutions for personal use.
Increase
(Normal Balances) Decreases
Balance sheet accounts:
Asset Debit Credit
Liability Credit Debit
Owner’s Equity:
Capital
Credit Debit
Drawing Debit Credit
Income statement accounts:
Revenue Credit Debit
Expense
Debit Credit
Flow of Business Transactions
Flow of Business Transactions
1
Transaction
authorized
2
Transaction
takes place
3
Document
prepared
1.
Determine whether an asset, a liability,
owner’s equity, revenue, or expense account
is affected by the transaction.
2.
For each account affected by the transaction,
determine whether the account increases or
decreases.
3.
Determine whether each increase or decrease
should be recorded as a debit or a credit.
System to Analyze Transactions
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 2
1 2 3 4
Dec. 312005 Prepaid Insurance 2 400 00
Cash 2 400 00
Paid premium on two-year policy.
Dec. 1 NetSolutions paid a premium of
$2,400 for a comprehensive insurance
policy covering two years.
Dec. 1 NetSolutions paid a premium of
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 2
1 2 3 4
Dec. 12005 Prepaid Insurance 2 400 00
Cash 2 400 00
ACCOUNT Prepaid Insurance ACCOUNT NO. 15
Balance
Debit Credit Date Item Post. Ref. Debit Credit
2 400 00 2 400 00 Dec. 12005
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 2
1 2 3 4
Dec. 12005 Prepaid Insurance 2 400 00
Cash 2 400 00
ACCOUNT Prepaid Insurance ACCOUNT NO. 15
Balance
Debit Credit Date Item Post. Ref. Debit Credit
2 400 00 2 400 00 Dec. 12005 2
15
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 2
1 2 3 4
Dec. 12005 Prepaid Insurance 2 400 00
Cash 2 400 00
Paid premium on two-year policy.
15
ACCOUNT Cash ACCOUNT NO. 11
Balance
Debit Credit Date Item Post. Ref. Debit Credit
2 000 00 5 900 00 Nov. 302005 2
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 2
1 2 3 4
Dec. 12005 Prepaid Insurance 2 400 00
Cash 2 400 00
Paid premium on two-year policy.
15
ACCOUNT Cash ACCOUNT NO. 11
Balance
Debit Credit Date Item Post. Ref. Debit Credit
14 15 16 17
1 Rent Expense 52 800 00
Cash 11 800 00
Paid rent for December.
Dec. 1 NetSolutions paid rent for December,
$800.
14 15 16 17
1 Cash 14 360 00
Unearned Rent 23 360 00
Received advanced payment For three months’ rent of land.
Dec. 1 NetSolutions receives $360 for three
month’s rent beginning December 1.
Dec. 4 NetSolutions purchased office
equipment on account from Executive
Supply Co. for $1,800.
Dec. 4 NetSolutions purchased office
equipment on account from Executive
Supply Co. for $1,800.
18 19 20 21
4 Office Equipment 18 1 800 00
Accounts Payable 21 1 800 00
Dec. 6 NetSolutions paid $180 for a
newspaper advertisement.
Dec. 6 NetSolutions paid $180 for a
newspaper advertisement.
21 22 23 24
6 Miscellaneous Expense 59 180 00
Cash 11 180 00
Dec. 11 NetSolutions paid creditors $400.
Dec. 11 NetSolutions paid creditors $400.
24 25 26 27
11 Accounts Payable 21 400 00
Cash 11 400 00
Dec. 13 NetSolutions paid a receptionist and
part-time assistant $950 for two
weeks’ wages.
Dec. 13 NetSolutions paid a receptionist and
part-time assistant $950 for two
weeks’ wages.
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 3
1 2 3 4
Dec. 132005 Wages Expense 51 950 00
Cash 11 950 00
Dec. 16 NetSolutions received $3,100 from
fees earned for the first half of
December.
Dec. 16 NetSolutions received $3,100 from
fees earned for the first half of
December.
5 6 7 8
16 Cash 11 3 100 00
Fees Earned 41 3 100 00
Dec. 16 Fees earned on account totaled
$1,750 for the first half of
December.
Dec. 16 Fees earned on account totaled
$1,750 for the first half of
December.
9 10 11 12
16 Accounts Receivable 12 1 750 00
Fees Earned 41 1 750 00
Dec. 20 NetSolutions paid $900 to Executive
Supply Co. on the $1,800 debt owed
from the December 4 transaction.
Dec. 20 NetSolutions paid $900 to Executive
Supply Co. on the $1,800 debt owed
from the December 4 transaction.
13 14 15 16
20 Accounts Payable 21 900 00
Cash 11 900 00
Dec. 21 NetSolutions received $650 from
customers in payment of their
accounts.
Dec. 21 NetSolutions received $650 from
customers in payment of their
accounts.
18 19 20 21
21 Cash 11 650 00
Accounts Receivable 12 650 00
Dec. 23 NetSolutions paid $1,450 for
supplies.
Dec. 23 NetSolutions paid $1,450 for
supplies.
22 23 24 25
23 Supplies 14 1 450 00
Cash 11 1 450 00
Dec. 27 NetSolutions paid the receptionist
and part-time assistant $1,200 for
two weeks’ wages.
Dec. 27 NetSolutions paid the receptionist
and part-time assistant $1,200 for
two weeks’ wages.
27 28 29 30
27 Wages Expense 51 1 200 00
Cash 11 1 200 00
Dec. 31 NetSolutions paid its $310 telephone
bill for the month.
Dec. 31 NetSolutions paid its $310 telephone
bill for the month.
31 32 33 34
31 Utilities Expense 54 310 00
Cash 11 310 00
Dec. 31 NetSolutions paid its $225 electric
bill for the month.
Dec. 31 NetSolutions paid its $225 electric
bill for the month.
Post. Ref.
JOURNAL
Date Description Debit Credit
Page 4
1 2 3 4
Dec. 312005 Utilities Expense 54 225 00
Cash 11 225 00
Dec. 31 NetSolutions received $2,870 from
fees earned for the second half of
December.
Dec. 31 NetSolutions received $2,870 from
fees earned for the second half of
December.
5 6 7 8
31 Cash 11 2 870 00
Fees Earned 41 2 870 00
Dec. 31 NetSolutions earned $1,120 on
account for the second half of
December.
Dec. 31 NetSolutions earned $1,120 on
account for the second half of
December.
9 10 11 12
31 Accounts Receivable 12 1 120 00
Fees Earned 41 1 120 00
Dec. 31 Chris Clark withdrew $2,000 for
personal use.
Dec. 31 Chris Clark withdrew $2,000 for
personal use.
14 15 16 17
31 Chris Clark, Drawing 32 2 000 00
Cash 11 2 000 00
NetSolutions Trial Balance December 31, 2005 Cash2 065 00
Accounts Receivable 2 220 00 Supplies 2 000 00
Prepaid Insurance 2 400 00 Land 20 000 00
Office Equipment 1 800 00 Accounts Payable 900 00 Unearned Rent 360 00
Chris Clark, Capital 25 000 00 Chris Clark, Drawing4 000 00
Fees Earned 16 340 00 Wages Expense 4 275 00 Rent Expense 1 600 00 Utilities Expense 985 00 Supplies Expense 800 00
NetSolutions Trial Balance December 31, 2005
Cash2 065 00
Accounts Receivable 2 220 00 Supplies 2 000 00
Prepaid Insurance 2 400 00 Land 20 000 00
Office Equipment 1 800 00 Accounts Payable 900 00 Unearned Rent 360 00
Chris Clark, Capital 25 000 00
Chris Clark, Drawing4 000 00 Fees Earned 16 340 00 Wages Expense 4 275 00 Rent Expense 1 600 00 Utilities Expense 985 00 Supplies Expense 800 00
Miscellaneous Expense 455 00 42 600 00 42 600 00
NetSolutions Trial Balance December 31, 2005 Cash2 065 00
Accounts Receivable 2 220 00 Supplies 2 000 00
Prepaid Insurance 2 400 00 Land 20 000 00
Office Equipment 1 800 00 Accounts Payable 900 00 Unearned Rent 360 00
Chris Clark, Capital 25 000 00
Chris Clark, Drawing4 000 00
Fees Earned 16 340 00 Wages Expense 4 275 00 Rent Expense 1 600 00 Utilities Expense 985 00 Supplies Expense 800 00
Miscellaneous Expense 455 00 42 600 00 42 600 00
Statement
of Owner’s
NetSolutions Trial Balance December 31, 2005 Cash2 065 00
Accounts Receivable 2 220 00 Supplies 2 000 00
Prepaid Insurance 2 400 00 Land 20 000 00
Office Equipment 1 800 00 Accounts Payable 900 00 Unearned Rent 360 00
Chris Clark, Capital 25 000 00 Chris Clark, Drawing4 000 00
Fees Earned 16 340 00 Wages Expense 4 275 00 Rent Expense 1 600 00 Utilities Expense 985 00 Supplies Expense 800 00
Miscellaneous Expense 455 00
42 600 00 42 600 00
Income
Statement
1.
Failure to record a transaction or to post
a transaction.
2.
Recording the same erroneous amount
for both the debit and the credit parts
of a transaction.
3.
Recording the same transaction more
than once.
4.
Posting a part of a transaction correctly
as a debit or credit but to the wrong
account.
Error Correction Procedure
1. Journal entry is incorrect Draw a line through the error
but not posted. and insert correct title or
amount.
Error Correction Procedure
Error Correction Procedure
1. Journal entry is incorrect Draw a line through the error
but not posted. and insert correct title or
amount.
Error Correction Procedure
2. Journal entry is correct Draw a line through the
but posted incorrectly.posted error and post
correctly.
Error Correction Procedure
Error Correction Procedure
3. Journal entry is incorrect
Journalize and post a
and posted correcting entry.
What would be the necessary
correcting entry?
What would be the necessary
correcting entry?
Journal – As recorded and posted
Correcting Errors – An Example
Correcting Errors – An Example
On May 5, a purchase of ofce equipment on account was incorrectly journalized and posted as shown.
Date Description Debit Credit
May 5 Supplies 12,500
Journal – As recorded and posted
Correcting Errors – An Example
Correcting Errors – An Example
On May 5, a purchase of ofce equipment on account was incorrectly journalized and posted as shown.
Date Description Debit Credit
May 5 Supplies 12,500
Accounts Payable 12,500
Date Description Debit Credit
Date Description Debit Credit
May 5 Ofce Equipment 12,500
Supplies 12,500
Journal – As recorded and posted
Correcting Errors – An Example
Correcting Errors – An Example
On May 5, a purchase of ofce equipment on account was incorrectly journalized and posted as shown.
Date Description Debit Credit
May 5 Supplies 12,500
