 Hello! In this presentation, we will work a comprehensive problem recording journal entries in the general journal over here, posting those journal entries then to the general ledger, and then using the general ledger in order to create the trial balance. This will be similar to worksheet problems we have worked in the past. However, this time, we will be focusing in on transactions by date rather than by cycle. In the past, we focused on transactions related to cash, then transactions related to accounts receivable or the sale cycle, then transactions related to accounts payable or the purchases cycle. In this case, we're just going to go through the transactions by date and not focus on any particular cycle. In so doing, we're going to have some more activity we're going to have to work on and focus in on at any given time. We're going to have to work through this excel sheet and try to figure out how best to manipulate this excel sheet. It looks pretty intimidating at first glance, but it's not too bad once we focus in on one thing at a time and work through that. The data is going to be down here, so we're going to put the activities of this data into the journal entries, then posting them to the general ledger, which will then populate the trial balance. First thing we're going to do is hide some of these cells. What we're going to work in is this worksheet first, and I want to have this as easy as possible to move around. In order to do that, we'll just practice how to set things up in excel, and one way is to hide these at first. I don't need this extra sheet right here, so I'm going to hide that so I can see this sheet right next to the data that we will be working with. In order to do that, you want to put your cursor on the F up here. We'll put it on the E, this small E. We'll put it right there on the E. We're going to highlight that whole column, and then highlight all columns from E to I. Let go. Then you have that highlighted area, and remember it's the whole column, not just part of the column. We had to highlight the whole thing, and then right click in the highlighted area, and we're going to hide those cells. Now we're working in just the cells to the left, this sheet, this general journal, where we will then post our record, our journalize, the journal entries. The first activity happens on five three, and it says, we receive cash from clients for advanced payment for services that will be provided in the future, record as unearned revenue. We're going to record this transaction, we did work, and we're going to receive payment for work we're going to do in the future. So that's going to be on five threes. I'm going to put the date here in cell A five, I'm just going to put five dash three, it's going to format it with a date format in the month and then the day. And first question we're going to say, is cash affected? And in this case, we're going to say, yes, cash is affected, we received cash, and that's going to be the key term of course seen, received cash. So if we know nothing else, we know that cash has been received, cash has a debit balance represented by the fact that it does not have brackets, we need to make it go up. So we're going to do the same thing to it, which is a debit. So I'm here in K five, the cell K five, going to right click on that cell and copy, we're going to put that in cell B five, right click and paste 123. The amount then will be, if we scroll back down 4000, so we're going to put 4000 here, I'm going to credit something for 4000, I could put a negative 4000, but I'm going to use a formula, which is negative, and then point to this 4000 here, it'll take that 4000, multiply times negative one, flipping the sign to a credit to 4000. Then we just need to know what this account needs to be. And you would think that if we got cash from a client, it would be revenue. But in this case, what this long thing is trying to say is we receive payment in advance for services that will be provided in the future. So we haven't done the work yet in essence, and therefore we cannot record the revenue under the revenue recognition principle until the work has been done, and therefore must be recording this to unearned fees, unearned fees, we can see is in the liability section. I'm going to copy that. We're going to put that up here in B six right click and paste 123. We're then going to double click right before the you and space three times. So we have that. Now we already know that we're going to credit the unearned fees because we debited cash. That's why we think of cash first. But if we think through that, we're going to say, hmm, unearned fees looks like it's in the liability section of the trial balance as it's close to other liability accounts. It has a credit balance represented by the fact that it has brackets, and the unearned fees needs to go up. Why? Because we owe something in the future, not money necessarily, but work is due in the future. Therefore, we're going to have to increase it by doing the same thing to it, which in this case would be another credit. Remember that this is the journal entry that we have just recorded in the process of journalizing the journal entry in the general journal. Now we're going to post this journal entry to the general ledger over here starting with cash. So cash is here. It's the first account on the trial balance first account on the general ledger. We're going to be on the debit side and we'll be in cell in nine. Highly recommend using formulas here. You could type in 4000, but if you have a problem, it'll be much more difficult to find that problem. If you just type it in there, what we want to do is tie everything together. I'm going to say equals then point to this 4000. Once we select enter, this will go up by 4000. That balance will then be in this cell here, and we will be out of balance by 4000 down here and enter. So we're up to 26 100, 26 100 here, 26 or 4000 out of balance here. Now we will post the other side under and fees. Here is under and fees here. If we scroll down to the trial balance, it's way down here under and fees. We want to have this account. It's going to be the last liability account, last orange account. It'll be in the same order on the general ledger. So we have assets here. We then have liabilities. So we're looking for that last liability account here it is. Now, of course, we can see that when we're down here in the liability section, we can't really see the journal entry. We could record this and just hit the equal sign and scroll back over. We're going to try to show some other techniques that you can use. We do really want to use formulas. So a few ways you can do that. You can try to memorize the cell and put equals and memorize the cell there, or you can say equals and scroll back over and find it, which works quite well. But I'm going to try to show you this technique just so we can see more of the screen at one time. And that technique is just to be the freeze the frames. In order to do that, you want to go to the home tab or you want to go to the views tab up top views tab, and you're going to go to this window here. Now, in order to freeze these frames, you want to make sure what I'm trying to do is freeze the cells B through D so that anytime I scroll over this way, I still see those cells here so that when I get over there, I can see this activity at the same time as seeing part of the general ledger and then post those out at the same time. In order to do that, you want to be right here on J1. So you have to be here when freezing the frames if you're going to do this. So you're going to go to the view tab, then you're going to go to the windows group and then freeze frames. And you want to freeze the frames here. So when you do that, what will happen is if you scroll this way, then you'll see that these cells A through D are always still there. And that means we can always see the journal entries no matter where we go. So if we use that function then and I want to record something to the unearned fees, then I can just scroll over to unearned fees. It's going to be these orange accounts. Note that it's a little confusing at first to see it goes A, B, C, D, X, because the cells are freeze. But we're going to be down here. And I still have to scroll down a bit. So we might also want to minimize the screen a bit. I'm at 130. I'm going to bring it down to maybe 100 and 100 is pretty close. So then we want to credit here. And so we want to credit here. So I'm in cell AA 24. So we have to manipulate notice this Excel sheet. It's not too bad. You can do it in a lot of different formats, but we got to manipulate this Excel sheet a bit within AA 24. I'm going to say that equals, scroll up just a bit and point to that 4,000. And that's going to increase this 2,500 by the 4,000 to 6,500. We're going to make the screen big again back to 130. That 6,500 should also be reported here on the trial balance and put his back in balance down here. All right, let's see the next transaction. We're saying 55 receive cash from clients for work done in the past and recorded as accounts receivable. So 55, I'm going to skip a line and put 55 in here. And we're going to say, is cash affected? And of course, the first part of that is received cash. So we're going to say cash is affected. Cash has a debit balance represented by the fact that it does not have brackets. We're going to make it go up by doing the same thing to it, which in this case is another debit. So I'm going to copy cash in K5, right click and copy. We're going to put that in cell B8, right click and paste 123. The amount then is going to be this 3,100. So we're going to put 3,100 on the debit side 3,100. We're going to credit something for 3,100. I'm going to do that with a formula negative of that number and enter. So now we just need to know what we are going to credit. You would think that if we got cash, we would credit revenue, but in this case, it says receive cash from clients for work done in the past. So we have to just know that work was done in the past and we must then have recorded revenue when the work was done in accordance with the revenue recognition principle. And now we have this account called accounts receivable, which we now need to decrease by the amount of payment we have received. So accounts receivable is K6. I'm going to right click that. I'm going to put that underneath in B9, right click and paste 123. Then I'm going to double click. We're going to double click before the A and add 3 spaces for that indentation. Now we already know that we're going to credit accounts payable because we debited cash and we need to credit something, but we also want to check that we know that accounts payable is an asset account, has a debit balance therefore, and we need to make it go down. This account representing people owing us money after they have paid us, then that account needs to go down. And therefore, we're going to make it go down by doing the opposite thing to it, which is a credit. So we're going to post the cash first to the general ledger. So here's the cash first item on the trial balance, first item on the general ledger. We want it on the debit side. We're going to go to the next transaction line in so in 10 say equals and point to that 3100 and enter next one. We got accounts receivable. It's going to be nice and easy. It's right next to the cash. So it's going to be our second transaction in essence. We got a better asset and lost the worser asset in one sense. So accounts receivable is going to be right here since so CS nine. So this is the accounts receivable general ledger. We are doing the active posting. We're on the credit side as nine equals and point to that 3100 and enter. So that brings this balance down. We're now left with just 300 that 300 is on the trial balance as well. And we are back in balance. No effect on net income from either of these two transactions as of yet. Next transaction says paid cash for miscellaneous expense five nine. So I'm going to say five nine. Skip a line five dash nine. And first question is cash affected. We're going to say yes it is affected is affected says paid therefore it's going down. How do we make something go down? We do the opposite thing to it as its normal balance cash having a normal balance of a debit the opposite then being a credit. Therefore we will credit cash copy and cash. We're going to put that on the bottom. So here's the date. I'm going to be on the bottom of the date. Right click paste 123. Then we're going to double click right before the C indent three times put the dollar amount in the credit side in D 12 of that amount in this case $400. So we're going to put negative $400. Then we're going to debit something. I'm going to do that with a formula by saying negative of that number. And now we just need to know what we should be debiting in five nine. We said that we paid for miscellaneous expense. So that's going to be down here on the expense side miscellaneous often being on the bottom because it's kind of like that catch all things that we typically put it on the bottom. So it's in K 23. I'm going to copy that. We're going to put that on the top of our journal entry in cell B 11 right click and paste 123. Now we just need to post this out. Now note that we already knew that we're going to debit the expense because we credited the cash. But we also know that all expenses have debit normal balances and they only go up in the debit direction. Therefore we do the same thing to it, which is another debit. Now we're going to post this. Now note that this miscellaneous expense is the last account on the trial balance and therefore the last account on the general ledger. If we have freeze the pains we can we can go over and find that. So note that we have the assets first and then the liabilities and then the equity and then the revenue and expenses. And we're way down here in the last expense in cell AL 21. Now if you freeze the pains, it's nice because you can be over here in AL 21. And we are on the debit side and just say equals and point to that 400 all on the same screen. Once we select enter, it will increase this amount here. There's the 400. It'll also pull that over to the trial balance over here. It'll put us out of balance by 400 and net income is now at a loss because revenue minus expenses means that we have debits winning and no revenue. And so that means we're at a loss. Now we're going to record the other side, the cash side. Cash has a credit here. First account on the trial balance, first account on the general ledger. We're going to go to the next line credit side right here in 011 and say that that equals then point to this $400. That's going to bring this balance down by $400 to 28 800 that same number here in the cash item. And that puts us back in balance on the trial balance. Next we have 513 paid vendor for part of debt incurred in the prior month recorded as accounts receivable. So 513. We're going to be right here. Skip a line. 513. First question. Is cash affected? We're going to say yes. Keyword being paid. So we see paid. So we're going to say cash is going down. Cash has a debit balance in order to make something go down. We do the opposite thing to it, which is a credit. So we're going to credit cash. I'm going to copy cash. Going to put it on the bottom. Here's the date. It's going to go on the bottom of the date. Right click and paste 123. Going to double click right before the C indent three times. And then we're looking for that amount. So on 513. It's $500. So we're going to put right here 500 in D 15 negative 500 for the credit. We're going to debit something for 500. I'm going to put that with a negative of this number 500. Now we just need to know what that amount should be. So if we look at 513 paid vendor for part of the debt incurred in the prior month. So we're paying off a debt that was incurred in the prior month and it actually tells us that it's going to be accounts payable. So why did we pay something? We incurred a debt in the prior month. We probably purchased an expense or some kind of asset on account. And now we're paying off the on account. The on account account being accounts payable. So we're paying off what is owed for some transaction that happened in the past. A liability then is going down some copying accounts payable. We're going to put that in cell B 14 right click and paste 123. So here's our journal entry. We already know that we're going to debit accounts payable because we credited cash. But if we think through it accounts payable as a liability account, it has a credit balance represented by the brackets. It needs to go down because accounts payable represents what is owed to us. And this transaction represents somebody paying us. And therefore the amount owed to us must go down. So we will do the opposite thing to it as it's normal balance, which is a debit. When recording this will record the payable first. It's going to be the first orange accounts in this order all the assets and then accounts payable the liability. Same order over here on the GL. So here's all the assets. And then here's the liability. Remember we freeze the we froze the screen not freeze it we froze it. And therefore we're going to be over here and that may look a little funny, but we're over here in accounts payable. And we are on the debit side. We're in cell Z nine. That's going to equal this 500 on the debit. That's a credit. This will be a debit. This will then go down to 300 scrolling back over to our trial balance. We see that 300 here. We see that we are out of balance by 500 scrolling back up. We then have cash, which has a credit of 500. That's our first account here. It will be our first account here. We're on the credit side. So here we are in 012 equals and we're going to point to this 500. That's going to bring this balance down by 500 to 28 300, which we then see here on the trial balance. And we see that we are back in balance here. No effect on net income just that $400 from the prior transaction. Next transaction we've got on 516 paid employee for salary incurred $800 on 516. So I'm going to skip line 516. And the first question obviously is cash affected. We're going to say yes keyword paid paid employees. Therefore cash is going down. So how do we make something go down? We do the opposite thing to it as its normal balance normal balance here debit opposite then credit we will then credit cash copy cash going to put that on the bottom. Here's the date. We're going to be on the bottom of that right click paste 123. Then we're going to double click before the C indent three times put the dollar amount on the credit side that dollar amount of $800 in this case. So we're going to say 800 credit negative 800. We're going to put a debit of something for 800 negative of that number just flipping the sign. What should that account be? We paid employees if we look through our our trial balance which I always recommend having available we see salaries expense that sounds like it could be something related to payroll. So I'm going to say that's the one we're going to copy salaries expense put that on the top right click in B17 paste 123. Now we already know that we're going to debit the salaries expense because we credited cash but we always want to double check it and say well salaries expense is an expense all expenses have debit balances they only go up in the debit direction therefore we will do the same thing to it as its normal balance that is a debit. We're then going to post this so this recorded journal entry will now be posted and it's going to be in order again so we've got assets liabilities equity revenue and expenses it's going to be way down here then so we're going to be way over in the same section on the GL so we have assets on the GL we've got liabilities we've got revenue we've got expenses we're way down here in the salaries expense we have a debit here we're going to be in the salaries on the debit side right here in a h9 we're going to say that that equals and then point to this 800 that's going to bring this up by 800 that same 800 if we scroll back over will then be represented here and we will be out of balance by 800 we're then going to credit the cash for 800 cash is our first account here it's our first account here we then will record the credit on the credit side here next line down in cell o 13 we're going to say that equals and then point to this 800 so we've got the 28 300 we'll go down by 800 to 27 500 that then will be represented on the trial balance as well and we will be back in balance here we know that net income also went down by that 800 meaning there's no revenue left so there are no credits and the debits are winning on the income statement meaning there's more debits than credits or more expenses than revenue so this is actually a loss because the non-bracketed numbers represent debits and we don't have any bracket numbers we will later and this will make more sense once we get some revenue to see how the calculation is working but until that happens we just have them a loss for the month of 1200 dollars next transaction 517 we're going to say cash received from client for revenue earned that okay so we're going to have some revenue now so 517 so next here we're going to say 517 is cash affected we're going to say yes it says cash was received keyword received cash has a debit balance how do we make it to go up for being received we do the same thing to it as its normal balance which is another debit so what we're going to do is debit cash i'm going to copy cash in k5 right click and copy well you will then scroll down to sell b20 right click and paste 1 2 3 dollar amount on the debit side will be we received cash of 7100 7100 we're going to credit something for 7100 i'm going to represent that with a negative of that number then we just need to know what this amount should be or what this account should be and it says here that we received cash from client for service earned during the month so we're going to basically say this is done at the same time we earned the service at the same time or within the same month that we did that we got the cash and therefore we're going to record revenue at the time that we have earned it this point in time so we're going to copy revenue or income that's going to be in b21 right click and paste 1 2 3 well then double click before the r space three times and there we have that so now we're going to go ahead and record this out note that we already knew that we're going to credit revenue because we debited cash but if we think through it we're going to say well revenue as a normal credit balance revenue only goes up clients pay us we don't pay clients or customers pay us we don't pay customers and therefore we make a revenue go up by doing the same thing to it which in this case is another credit notice that this is our kind of our favorite journal entry and both sides are good there's nothing bad about this journal entry we received cash and we earned revenue and we need a debit and a credit and that's why the debits of credits aren't inherently good or bad there's nothing bad about either side of this and we need a debit and a credit so the assets are going up with a debit and the revenue is going up with a credit both sides being good so we're going to say first posting the cash that's our first account on the trial balance first account on the general ledger we will then be on the debit side in sell in 14 so within in 14 equals pointy to this 7100 that will bring this balance up by 7100 put that number on the trial balance put us out of balance by 7100 so there we have that we're at 34600 34600 then here we are out of balance by 7100 now we're going to post the credit side so here's the revenue here's the revenue here note that it goes assets liabilities equity then revenue it's going to be the same order when we look at the general ledger so we're scrolling over assets liabilities equity and then revenue so we are here in the revenue account on the credit side in cell a e 19 a e 19 we're going to say that equals and point to the cell way over here on d 21 and remember we free we froze the screen so that we have these these cells that are always going to scroll over if you don't remember how to do that or you didn't see that go back to the prior point in the video to find it we just went to the view tab and froze the screen but you got to be in the right cell to do that so go back and check that out if you want to freeze the screen you don't have to freeze the screen you could do this in other other ways as well but there's going to be that we're going to see that same 7100 here and if we calculate net income then we see that it is calculated as 7100 credit minus the debits meaning we have income now this bracketed number not representing a loss but representing the fact that the credits are greater than the debits by 5900 giving us net income of 5900 we are also of course back in balance next transaction we're going to be down here on 521 where it says purchase of supplies on account no cash paid so 520 purchase supplies on account so we're going to be here i'm going to say on a 23 we're going to say 5-21 correct 520 i got 20 520 and we're going to say first is cash affected we're going to say yes the keyword there being paid so i'm sorry purchase supplies doesn't say paid we say purchase supplies on account and therefore no paid of the cash and on account is the key term so we have not yet paid cash we purchased it on account so what is affected not cash we purchased it with a payable but it might be easier for us to think not of the payable but what we received in order to know what the debits and credits are we received supplies supplies appear in the assets section we know that assets have our debit balance accounts we know that it's going up because we bought more supplies and therefore we can do the same thing to it as its normal balance again it might be easier for us to think of supplies in terms of does it get debited or credited then the payable and then figure out what happens to the payable that's the that's the order i would recommend so i'm going to copy the supplies we're going to put that on top in b23 right click and paste 123 the amount then 7500 i'm going to scroll back up here we're going to put 7500 and then we're going to credit something for 7500 then we know that that credit will not be cash it's going to be something other than cash and of course it will be accounts payable so accounts payable we're going to copy that in cell k 12 right click and copy going to scroll back down we're going to put that in cell b24 right click and paste 123 we're then going to double click in front of the a indent three times and there we have that now we're going to post the supplies supplies is going to be the what is it the third account here so it's going to be the third account here so here's supplies and we need i'm going to scroll over just a tab we need a debit to supplies so debit to supplies in cell r 20 r 20 equals this 7500 once we select enter will increase this amount by 7500 to 8,850 that amount showing here on the trial balance and putting us out of balance by 7500 we're then going to record the liability 7500 so here it is here first liability account we're going to scroll over it's in terms of assets and then liabilities same order we're over here on accounts payable now we can't see these two at the same time i'm going to make it a little bit smaller so i'm going to make it go down 120 and how about there 110 so we're recording this liability over here in cell a 810 so i'm in cell a 810 i'm going to say that equals and then point to this 7500 that's going to bring this amount up to 7800 if we make this a bit larger again back up to 130 scroll back over we're going to see that that amount is here 7800 and we can see that we're back in balance from that transaction