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Week 5 Workshop Workbook

The document discusses the purpose and advantages of general journal entries in accounting, highlighting their role in recording transactions and preventing errors. It also explains the importance of a chart of accounts for categorizing business transactions, providing insights into financial performance. Additionally, it includes examples of general journal entries and transactions for various companies.

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h214333
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7 views12 pages

Week 5 Workshop Workbook

The document discusses the purpose and advantages of general journal entries in accounting, highlighting their role in recording transactions and preventing errors. It also explains the importance of a chart of accounts for categorizing business transactions, providing insights into financial performance. Additionally, it includes examples of general journal entries and transactions for various companies.

Uploaded by

h214333
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 12

Accounting in Society

MACQUARIE BUSINESS SCHOOL


Department of Accounting and
Corporate Governance

ACCG1000 Accounting for Decision


Making
WEEK 5 Workshop Financial Accounting for Business –
Preparing General Journal Entries

Workshop Discussion Questions


Q1. What is the purpose of a general journal entry? Discuss the advantages of the general
journal.
The purpose of a general journal entry is to show how each transaction the journal shows,
demonstrates the effect of debit and credit on specific accounts. The advantages of the general
journal consist of how it provides a chronological record of all transactions and it disclose the
complete effect of a transaction in one place which helps prevent of locate errors.

Q2. What is a chart of accounts? Why is a chart of accounts important?


Chart of accounts are all transactions for a business which are recorded in accounts that are set
up in the general ledger. It allows you to break down all the transactions that your business made
during a specific period into different subcategories. By separating out your revenue, liabilities,
assets, and business expenditures, a chart of accounts enables you to gain insight into the
effectiveness of different areas of your business.

Page 1 of 12
Accounting in Society

Chapter 2: BE2.3 & 2.4

Expensive Designs Pty Ltd

**The first transaction has been completed to give you some guidance

Account debited Account credited


(a) (b) (c) (d) (a) (b) (c) (d)
Basic Specific Normal Basic Specific Normal
Transaction type account Effect balance type account Effect balance

1 Asset Cash Increase Debit Equity Share Increase Credit


capital

2 Asset Equipme Increase Debit Asset Cash Decrease Debit


nt (motor
vehicles)

3 Asset Supplies Increase Debit Liabilit Accounts Increase Credit


s y payable

4 Asset Accounts Increase Debit Equity Service Increase Credit


receivabl revenue
e

5 Equity Advertisi Increase Debit Asset Cash Decrease Debit


ng
expense

6 Asset Cash Increase Debit Asset Accounts Decrease Debit


receivabl
e

7 Liabili Accounts Decreas Credit Asset Cash Decrease Debit


ty payable e

Page 2 of 12
Accounting in Society

Page 3 of 12
Accounting
Expensive Designs Pty Ltd in Society

General Journal

Date Account Name Debit Credit

1 Cash 10000 10000


Share capital.
(Issued shares to investors for cash)
2 Equipment/motor vehicles 5000 5000
Cash
(Purchased car for business with cash
3 Supplies 500 500
Accounts payable
(Purchased supplies on account)
4 Accounts receivable 1800 1800
Service revenue.
(Invoiced customers for services performed
5 Advertising expense 200 200
Cash
(paid advertising expense)
6 Cash 700 700
Accounts receivable (received cash from customers
7 Accounts payable 300 300
Cash
(Paid dividends to shareholders

Page 4 of 12
Accounting in Society

Page 5 of 12
Chapter 2: PSB 2.7 part (a) onlyAccounting in Society

Busy Bookkeepers Pty Ltd


Date Account Name Debit Credit

2 Cash 88000
Share capital.
(Issued shares for cash) 88000
3 Not a transaction so there will be no entry
(Hired a reception)
4 Supplies 1600 1600
Accounts Payable
(Purchased supplies on account
7 Rent expense. 2400 2400
Cash
(Paid office rent)
11 Accounts Receivable 3800 3800
Service Revenue (Billed client for services
provided)
12 Cash 3000 3000
Revenue received in advance.
(Received an advance for future services)
17 Cash 1700 1700
Service Revenue (Received cash for revenue
earned)
31 Salaries 2000 2000
Expense
Cash (Paid salaries)
31 Accounts Payable ($1,600 X 40%) Cash (Paid 640 640
creditor on account)

CLASS ACTIVITY

Date Account Name Debit Credit

6 (Supplier – unearned revenue – you pay 400$ as a deposit


for prepayment – but haven’t repaid – prepayment is an
asset – revenue received in advance is a liabili
11

14

Page 6 of 12
18 Accounting in Society

22

28

Page 7 of 12
Additional Self-Study Questions Accounting in Society

Chapter 2: E2.6

Bookit Pty Ltd

Accounts Accounts
debited credited
Transaction Basic (a) Specific (b) Effect (c) Normal (d) Basic (a) Specific (b) Effect (c) Normal (d)

1 Asset Cash Increase Debit Equity Share capital Increase Credit

Page 8 of 12
Accounting in Society

Page 9 of 12
Chapter 2: E2.7 Accounting in Society

Bookit Pty Ltd

Date Account Name Debit Credit

Page 10 of 12
Chapter 2: PSA2.5 part (a) Accounting in Society

Mahon Consultants Pty Ltd

Date Account Name Debit Credit

Page 11 of 12
Accounting in Society

Page 12 of 12

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