Posting from journals to the general leger (double entry principle) (Module 5 - 8) COMPLETE Flashcards
In the cash Receipts Journal, the total amount for bank is
recorded in the (debit/credit) side.
In the Cash Receipts Journal, the total amount for bank is
recorded in the debit side.
What is a debit account?
An account where assets (mostly money) goes to.
What is a credit account?
An account where assets (mostly money) comes from.
State the double entry principle.
With every account debited or credited in the general ledger, there will always be another account effected that is also either debited or credited..
When Drawings(Owner’s equity) is Debited then what account will be credited?
Bank will be credited because money flows out of the bank account account and into to drawings account.
sales is an income account so should be (debited/ credited) when it increases
Sales is an income account and income should be credited when it increases
When sales (an income) is credited (increased) by R50, what will then be debited according to the double entry principal?
CRJ
the bank account will be directly effected and will be debited (increase)
Simple example:
|Dr………………….sales…………………(Cr)|
|Amount |Reason| Amount| Reason
|…………………………|R50……..| bank
|(Dr)………………….bank………………….Cr|
|Amount |Reason| Amount| Reason
|R50………| sales…|
When the Cost Of Sales (an expense) account is debited (increased) by R1300, what account will be effected according to the double entry principle?
CRJ
Trading stock is the account directly effected by an increase in the cost of sales since when the trading stock decreases (when it is sold) then the cost of sales account will increase by the said trading stocks cost price.
|(Dr)…………….cost of sales……………Cr|
|Amount |Reason| Amount| Reason
|R1300…..| TS……..|
|Dr……………Trading stock………….(Cr)|
|Amount |Reason| Amount| Reason
|…………………………| R1300….| COS
COS means cost of sales and TS means trading stock, had to save up on space.
Lets say using a businesses bank card, a bakery buys a new oven! When the Equipment (an asset) account is debited(increased) by R6000, what account will be effected according to the double entry principal?
CPJ
Bank(an asset) will be directly effected since money is taken out of the bank account and put into or rather converted to Equipment with the same value but in a different form, crediting the bank account.
|(Dr)…………….Equipment…………….Cr|
|Amount |Reason| Amount| Reason
|R6000…..|Bank…|
|Dr………………….bank………………….(Cr)|
|Amount |Reason| Amount| Reason
|…………………………|R6000…..|Equip
When a clothing business buys R500 trading stock in socks with its bank card, The Trading stock(an asset) account will be debited but what account was effected?
CPJ
Bank (an asset) will be directly effected since money is taken out of the bank account and converted to Equipment with the same value but in a different form, crediting the bank account…
|(Dr)……………Trading stock……………Cr|
|Amount |Reason| Amount| Reason
|R500…….|Bank….|
|(Dr)………………….bank…………………..Cr|
|Amount |Reason| Amount| Reason
|…………………………|R500…….|TS
TS = Trading stock
A certain business finally pays it’s employees their long overdue salary(an expense) of R700. what happens to the salaries account? and what other account is effected?
CPJ
The salaries account(expense) will increase because money flows inwards debiting it and the bank account(asset) will decrease because money flows out into the wages account
|Dr…………………salaries………………..Cr|
|Amount-|Reason|-Amount|-Reason
|R700…….|Bank….|
|Dr……………………bank………………….Cr|
|Amount-|Reason|-Amount|-Reason
|…………………………|R700…….|salaries
The business owner of a bacon manufacturing company that’s near bankruptcy due scepticism from allegations of the products being made of bat flesh wants to give his business one more chance and maybe it could redeem itself. So he invests R120 000 into the business in hopes that they could hire some good PR management. Capital(owners equity) has increased, increasing capital and will therefor be credited, but what account will this effect according to the double entry principal?
CRJ
Capital (owners equity) is all assets the owner of the business contributes to their business and in this case its hard cash baby! so the account effected will therefore be the bank account, causing it to increase, debiting it.
|Dr……………………bank………………….Cr|
|Amount |Reason| Amount| Reason
|R120000.|Capital|
|Dr…………………..Capital………………..Cr|
|Amount |Reason| Amount| Reason
|…………………………|R120000|Bank
NOTE: bank usually has many posts in the journals. That means all you have to post for it is the end of term amounts with the reason: “total receipts”
A business owner withdraws R1500 for personal use. What happens to drawings and the other account effected, huh?
CPJ
Drawings increases on the Debit side and the owner withdrew some money and the other account effected was bank! wow, how shocking… bank (an asset) will be credited in this case due to money flowing out to the owner’s personal account.
|Dr………………..Drawings……………….Cr|
|Amount |Reason| Amount| Reason
|R1500…..|Bank….|
|Dr…………………..Bank……………………Cr|
|Amount |Reason| Amount| Reason
|…………………………|R1500…..|Drwngs
In the cash Payments journal, the total end amount for bank is recorded in the (debit/credit) side.
In the cash Payments journal, the total end amount for bank is recorded in the credit side.
What reason should you use when posting the end-of-term total amount for the bank account from the CPJ?
Total receipts .
