 Hello, in this presentation we will define time ticket. According to Fundamental Accounting Principles Wild 22nd edition, the definition of time ticket is source document used to report the time an employee spent working on a job or on overhead activities and then to determine the amount of direct labor to charge to the job or the amount of indirect labor to charge to overhead. When considering a time ticket in this context, we're thinking about the tracking of time for an employee for the reason of applying the cost of that time to a job cost system. We're considering then a manufacturing type company in this scenario, one that produces inventory from raw materials, converting it ultimately to finished goods inventory. Which then is prepared for sale and when sold then is converted from finished good, the asset of inventory to the expense account of cost of goods. Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it sold. The time ticket will be a tool used to track the time and thereby tracking the costs so that we can apply them to a particular job. The job cost system looking something like this. We have the trial balance here. We have multiple inventory accounts, the inventory accounts being broken down into components of inventory, including the raw materials inventory, work and process inventory, finished goods inventory, factory overhead inventory. We can imagine the process here when we're producing inventory of it starting from raw materials, moving then to work and process and or factory overhead, ultimately moving into finished goods inventory, the inventory that then is ready for sale at which time, the time of sale, it will then be moved to the expense account, ultimately the income statement account, the expense account of cost of goods sold. These inventory accounts like all accounts will be backed up and supported by general ledger accounts, including the GL accounts over here of raw materials, finished goods, work and process, factory overhead, those accounts in order by date of transactions within those accounts, the ending balance within the general ledger accounts, equaling what is on the trial balance, for example, raw materials here, adding up to this 170,000 in the general ledger, matching the 170,000 on the trial balance, same idea for the finished goods, work and process, factory overhead accounts. Problem here, however, in terms of a job cost system is that the general ledger doesn't give us enough information to track the inventory costs from say, work and process to finished goods, from finished goods to cost of goods sold. We then need to back that information up in another format, put it in a different order, that order, that format, being job cost sheets. Job cost sheets could look something like this, where we have three jobs, in this example, job 14, job 15, job 16, those jobs, including the costs of materials, labor and overhead per job, and the total of those costs, then being the total costs that we are tracking per job. The time sheets, of course, will help us to apply the correct amounts to each particular job. It's going to be one of the tools that will allow us to apply direct labor to particular jobs and or break out the indirect labor, the amounts that we're not going to be able to apply to a particular job, things like maintenance on the factory or supervisor salaries, those being things that will need to be applied to factory overhead, and then applied to the job in some type of estimating format. Once we have that information, we will then use the job cost sheets to back up the trial balance. For example, job 16 only open job, in our example indicated here, adding up to 260,000, that amount matching what is on the trial balance under the work and process account, and the amount on the general ledger under the work and process account. Other two jobs are closed indicated by this green item here, and therefore these amounts of 186,000 and 314 are going to be included in the finished goods, the goods inventory available for sale, ready for sale, once sold, it then moving from finished goods to the expense account of cost of goods sold.