Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 3 - The Accounting Information System - Brief Exercises: BE3-7

Answer

a) Analyze each transaction in terms of its effect on the account. b) Enter the transaction information in a Journal. c) Posting in the Ledger.

Work Step by Step

a) The first step is to analyze the transaction. See whether a transaction has taken place or not. Ms. Suzane interviewed three girls for the post of a beauty assistant. There is no transaction, so there will not be any entry in accounts. If there is a transaction, find out the accounts to be effected. In which account increase or decrease will be there, and how the equation will balance. b) One analysis of the transaction is done, a Journal entry is made to record the transaction. c) The Journal entry is then posted to the respective account in the ledger. All the transaction of a particular account will be posted in the respective account in ledger. For example Cash Account in the ledger will have record of all the cash transactions taken place during the period.
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