1
Adeng Pustikaningsih, M.Si.
Dosen Jurusan Pendidikan Akuntansi Fakultas Ekonomi
Universitas Negeri Yogyakarta
CP: 08 222 180 1695
1. Describe the characteristics of an account and
record transactions using a chart of accounts and journal.
2. Describe and illustrate the posting of journal
entries to accounts.
3. Prepare an unadjusted trial balance and explain
how it can be used to discover errors.
4. Discover and correct errors in recording
transactions.
Describe the characteristics of
an account and record
transactions using a chart of
Accounting systems are
designed to show the
increases and decreases in
each financial statement item
The T account has a title.
76
The left side of the account is called the debit
side.
Title
The right side of the account is called the
credit side.
Title
9
Title
Debit Credit
Amounts entered on the
Title
Debit Credit
Amounts entered on the
11
Cash
(a) 25,000 (b) 20,000
(d) 7,500 (e) 3,650
(f) 950
(h) 2,000
Balance 5,900
Balance of the account
A group of accounts
for a business entity is
A list of the accounts
in a ledger is called a
Assets
are resources owned
by the business entity.
• Cash
• Supplies
• Prepaid expenses
Liabilities
are debts owed to
outsiders (creditors).
• Accounts payable
• Notes payable
Owner’s equity
is the owner’s
right to the assets of the
Revenues
are increases in
owner’s equity as a result
of selling services or
products to customers.
• Fees earned
• Commission revenue
The using up of assets or
consuming services in the
process of generating
revenues results in
expenses
.
• Wages expense
• Rent expense
This transaction is initially entered in a record called a
21
Journalizing requires the following steps:
1. Record the date. If this is the first entry on
the page, the year is inserted above the month. As long as the month does not change, the rest of the journal entries on the require on the day be recorded.
2. The title of the account debited is listed in
3. Enter the amount in the Debit column.
4. Record the credit account in the
Description column.
5. Enter the amount in the Credit column.
Watch these steps take place as the entry
to record Chris Clark’s deposit is
(a) On November 1, Cita Cinta opens a new business and deposits Rp.
25,000,000 in a bank account in the name of SolusiNet.
Balance Sheet Accounts
JOURNAL
Date Description Debit Credit Page 1
Cita Cinta, Capital 25 000 000 Invested cash in SolusiNet.
The effect of this entry is shown in the
accounts of SolusiNet as follows:
Cash
Nov. 1 25,000 Nov. 1 25,000
Cita Cinta, Capital
(b)
On November 5,
SolusiNet bought land
for Rp 20,000,000
paying cash.
27
5 Land 20 000 000
Cash 20 000 000
(
c)
On November 10,
SolusiNet purchased
supplies on account for
Rp1,350,000
29
10 Supplies 1 350 000
Accounts Payable 1 350 000 Purchased supplies on
(f)
On November 30,
SolusiNet paid
creditors on account,
Rp. 950,000
31
30 Accounts Payable 950 000
Cash 950 000
Debits Credits
Asset accounts……. Increase (+) Decrease (-)
Liability accounts.… Decrease (-) Increase (+)
Owner’s equity
(capital) accounts… Decrease (-) Increase (+)
33 Credit for
increases (+)
Debit for decreases
(–)
Owner’s Equity Accounts
Credit for decreases
(–) Debit for
increases (+)
Asset Accounts
Credit for increases
(+) Debit for
decreases (–)
Liability Accounts
Example Exercise 2-1
Prepare a journal entry for the purchase of a truck on June 3 for Rp.42,500, 000 paying Rp.8,500,000 cash and the
remainder on account.
Follow My Example 2-1
June 3 Truck Rp. 42,500,000
Cash 8,500,000
(d) On November 18, SolusiNet
received fees of Rp7,500,000 from customers for services provided.
Income Statement Accounts
30 Cash 7 500 000
Fees Earned 7 500 000 Received fees from
(e) Throughout the month, SolusiNet incurred the following expenses: wages, Rp. 2,125,000; rent Rp.
800,000; utilities, Rp. 450,000; and miscellaneous, Rp.275,000.
30 Wages Expense 2 125 000 Rent Expense 800 000 Utilities Expense 450 000 Miscellaneous Expense 275 000
Cash 3 650000
(g) On November 30, a count revealed that Rp.800,000 of the supplies inventory had been used during the month.
30 Supplies Expense 800 000
Supplies 800 000
41
Debits Credits
Revenue accounts… Decrease (-) Increase (+)
Expense accounts… Increase (+) Decrease (-)
Credit for increases
(+) Debit for
decreases (–)
Revenue Accounts
Income Statement Accounts
Credit for decreases
43
Equals
Net Income (credit > debits)
increases owners’ equity (capital)
Net Loss (debits > credits) decreases
Example Exercise 2-2
Prepare a journal entry on August 7 for the fees earned on account, Rp.115,000,000.
Follow My Example 2-2
Aug. 7 Accounts Receivable 115,000,000
The owner of a proprietorship may withdraw cash from the business for personal use. Such withdrawals have the
effect of decreasing owner’s equity.
(h) On November 30, Cita Cinta withdrew Rp.2,000,000 in cash from SolusiNet for personal use.
47
Cash 2 000 000
Cita Cinta withdrew cash for personal use.
Example Exercise 2-3
Prepare a journal entry on December 29 for the payment of Rp.12,000,000 to the owner of Smartstaff Consulting
Services, Dominique Walsh, for personal use.
Follow My Example 2-3
Dec. 29 Dominique Walsh, Drawing 12,000,000
49 Increase
(Normal Bal.) 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
Example Exercise 2-4
State for each account whether it is likely to have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries. Also, indicate its normal balance.
1. Ambarwati, Drawing 2. Accounts Payable 3. Cash
51 For Practice: PE 2-4A, PE 2-4B
Follow My Example 2-4
1. Debit entries only; normal debit balance
2. Debit and credit entries; normal credit balance 3. Debit and credit entries; normal debit balance 4. Credit entries only; normal credit balance
5. Debit and credit entries; normal debit balance 6. Debit entries only; normal debit balance
The equality of debits and credits for each transaction is built into the
accounting equation: Assets =
Liabilities + Owner’s Equity.
Because of this double equality, this system is called the
53
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.
1. Determine whether an asset, liability,
owner’s equity, revenue, expense, or
drawing account is affected by the transaction.
Transaction Analysis
4. Record the transaction using a journal entry.
5. Periodically post journal entries to the
accounts in the ledger.
6. Prepare an unadjusted trial balance at
Describe and illustrate
the posting of journal
entries to the accounts.
The process of transferring
the debits and credits from
Dec. 1 SolusiNet paid a premium of Rp.2,400,000 for a
comprehensive insurance policy covering liability, theft and fire. The policy covers a one-year
period.
Dec. 1 SolusiNet paid rent for December, Rp.800,000. The company from
which SolusiNet is renting its store space requires the payment of rent on the first of each month, rather than at the end of the month.
1 Rent Expense 52 800 000
Cash 11 800 000
An alternative approach is to debit
Rent Expense for Rp.800,000 on
December 1. This avoids having to transfer the balance to an expense
SolusiNet received an offer from a local retailer to rent the land purchased on November 5. The retailer plans to use the land as a parking lot for its employees
and customers. SolusiNet agreed to rent the land to the retailer for three months,
63
Dec. 1 SolusiNet receives Rp. 360,000
for three month’s rent for use of
its land beginning December 1.
1 Cash 11 360 000
Unearned Rent 23 360 000 Received advance
payment for three months’ rent on land.
Dec. 4 SolusiNet purchased office equipment on account from PD.Tunas Jaya. for Rp.1,800,000
4 Office Equipment 18 1 800 000
Accounts Payable 21 1 800 000
65 Dec. 6 SolusiNet paid Rp.180,000 for
a newspaper advertisement.
6 Miscellaneous Expense 59 180 000
Cash 11 180 000
Paid for newspaper ad.
Dec. 11 SolusiNet paid
creditors Rp.400,000
11 Accounts Payable 21 400 000
Cash 11 400 000
Paid creditors on
67 Dec. 13 SolusiNet paid a receptionist and
part-time assistant Rp.950,000 for
two weeks’ wages.
13 Wages Expense 51 950 000
Cash 11 950 000
Paid two weeks’ wages.
Dec. 16 SolusiNet received
Rp.3,100,000 from fees earned for the first half of December.
16 Cash 11 3 100 00
Fees Earned 41 3 100 00 Received fees from
69 Dec. 16 Fees earned on account
totaled Rp.1,750,000 for the first half of December.
16 Accounts Receivable 12 1 750 000
Fees Earned 41 1 750 000 Recorded fees earned
on account.
Dec. 20 SolusiNet paid Rp.900,000 to Executive Supply Co. on the Rp.1,800,000 debt
owed from the December 4 transaction.
20 Accounts Payable 21 900 000
Cash 11 900 000
71 Dec. 21 SolusiNet received
Rp.650,000 from customers in payment of their accounts.
21 Cash 11 650 000
Accounts Receivable 12 650 000 Received fees from
customers on account.
Dec. 23 SolusiNet paid Rp
1,450,000 for supplies.
23 Supplies 14 1 450 000
Cash 11 1 450 000
73 Dec. 27 SolusiNet paid the receptionist and
part-time assistant Rp.1,200,000
for two weeks’ wages.
27 Wages Expense 51 1 200 000
Cash 11 1 200 000
Paid two weeks’ wages.
Dec. 31 NetSolutions paid Rp.310,000 for telephone charges for the month.
31 Utilities Expense 54 310 000
Cash 11 310 000
75 Dec. 31 SolusiNet paid Rp.225,000 for
electric usage for the month.
Post. Ref.
JOURNAL
Date Description Debit Credit Page 1
Dec 31 Utilities Expense 54 225 000
2007
Cash 11 225 000
Paid for electric usage.
Dec. 31 SolusiNet received Rp.2,870,000 from fees earned for the second half of December.
31 Cash 11 2 870 000
77 Dec. 31 NetSolutions earned
Rp.1,120,000 on account for the second half of
December.
31 Accounts Receivable 12 1 120 000
Fees Earned 41 1 120 000 Recorded fees earned
on account.
Dec. 31 Cita Cinta withdrew
Rp.2,000,000 for personal use.
31 Cita Cinta, Drawing 32 2 000 000
Cash 11 2 000 000
79
Example Exercise 2-5
On March 1, the cash account balance was Rp. 22,350,000. During March, cash
receipts totaled Rp.241,880,000 and the March 31 balance was Rp.19,125,000.
Follow My Example 2-5
Using the following T-account solve for the amount of cash payment (indicated by ? below).
Cash
Mar. 1 Bal 22,350 ? Cash payments Cash receipts 241,880
Mar. 31 Bal. 19,125
Rp.19,125 = Rp.22,350 + Rp.241,880 – Cash payments Cash payments = Rp.22,350 + Rp.241,880 –Rp.19,125 =
Rp.245,105
Prepare an unadjusted
trial balance and explain
how it can be used to
discover errors.
The equality of debits and credits in the ledger should be proved at the end of each accounting period by preparing a trial balance. The heading should first list the name
of the company, the statement’s
83 82
Cash 2 0 6 5 000
Account Receivable 2 2 2 0 000
Supplies 2 0 0 0 000
Prepaid Insurance 2 4 0 0 000
Land 20 0 0 0 000
Office Equipment 1 8 0 0 000
Account Payable 9 0 0 000
Unearned Rent 3 6 0 000
Chris Clark, Capital 25 0 0 0 000 Chris Clark, Drawing 4 0 0 0 000
Fees Earned 16 3 4 0 000
Wages Expense 4 2 7 5 000 Rent Expense 1 6 0 0 000 Utilities Expense 9 8 5 000 Suppliexpense 8 0 0 000 Miscellaneous Expense 4 5 5 000
Balances Balances
SolusiNet
Unadjusted Trial Balance 31-Dec-07
In Rp.
For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance total to be unequal, indicate whether the debit or credit total is higher and by how much.
a. Payment of a cash withdrawal of Rp.5,600,000 was journalized and posted as a debit of RP.6,500,000 to Salary Expense and a credit of RP.6,500,000 to Cash. b. A fee of Rp.2,850,000 earned from a client was
debited to Accounts Receivable for Rp.2,580,000 and credited to Fees Earned for Rp.2,850,000.
85
Follow My Example 2-6
a. The totals are equal since both the debit and credit entries were journalized and posted for Rp.6,500,000.
b. The totals are unequal. The credit total is higher by Rp.270,000 (Rp.2,850,000 – Rp.2,580,000).
c. The totals are unequal. The debit total is higher by Rp.7,000,000 (Rp.3,500,000 + Rp.3,500,000).
Discover and correct
errors in recording
transactions.
A transposition occurs when the order of the digits is
changed mistakenly, such as writing Rp.542,000 as
Rp.452,000 or Rp.524,000. In a slide, the entire number is mistakenly moved one or more spaces to the right or the left, such
Another type of error is a posting error. Assume that on May 5 a Rp.12,500,000 purchase of office
equipment on account was
incorrectly journalized and posted as a debit to Supplies and a credit
89
Entry to Correct Error
May 31 Office Equipment 18 12 500 000
Supplies 14 12 500 000 To correct erroneous
Example Exercise 2-7
a. A withdrawal of Rp.6,000,000 by Roni Ahmad, owner of the business, was recorded as a debit to Office Salaries Expense and a credit to Cash.
b. Utilities Expense of Rp.4,500,000 paid for the current month was recorded as a debit to
Miscellaneous Expense and a credit to Accounts Payable.
91
Follow My Example 2-7
a. Cheri Ramey, Drawing 6,000
Office Salaries Expense 6,000
b. Accounts Payable 4,500
Miscellaneous Expense 4,500
Utilities Expense 4,500
Cash 4,500
Note: The first entry in (b) reverses the incorrect entry, and the second entry records the correct entry.
For Practice: PE 2-7A, PE 2-7B
90
