 Hello in this presentation. We will work a worksheet together which will record journal entries similar to those We have recorded in the past journal entries related to cash So we will record the journal entry process a bit faster But we are adding a new component this time That's component being that we will post these journal entries rather than to a Worksheet as we did in the past to a general ledger So we're gonna post these journal entries that we will record here now to this new item over here the general ledger this being the more traditional way of posting the transactions and a bit longer of a way obviously this worksheets gonna be a bit Longer we're gonna have to maneuver around at this worksheet a bit which will help us with both understanding Excel and the Larger worksheets note as we go this will not be too complicated as we go Hopefully if we take it one step by step, but note just the complexity of this worksheet would intimidate most people So that's just the nature of spreadsheets even though what we do from point to point Typically is not too difficult. We're just gonna be using addition and subtraction Most people are just scared of the of the worksheet itself That's good because it kind of provides us with some opportunities if we're we can understand how these things are put together then We have a bit of an edge in that particular area, so that's what we're gonna work on here We're gonna record the journal entry here We're gonna post them to the general ledger note that we have our Tribal in order of assets liabilities equity income and expense Then the general ledger will be in the same order meaning we have asset GL accounts Liability GL accounts in orange and then the capital then revenue and expenses The GL accounts will include the account name matching the trial balance And it will include a debit and credit as well as a running balance which will populate as we go Therefore all we want to do is enter data into the blue areas of this worksheet I'm gonna maneuver around this worksheet mainly using this item down here going back and forth And we will also manipulate the size from time to time Using this item down here like to get used to that and see if we can all you know get used to working with those functions So let's go down to the first transaction which says owner a deposits cash into the business checking account 130,000 asking our questions a bit faster than we have in the past is Cash affected we're gonna say yes cash is affected cash went into the business cash has a normal debit balance We need to make it go up. Therefore. We're gonna do the same thing to it as its normal balance Which is a credit which is a debit so we're gonna debit this item I'm gonna go ahead and copy cash in cell e5 right-click copy. I'm gonna put that in cell B5 right-click, and I'm gonna paste it one two three just the values not pasting normal because I don't want to make it green We're gonna paste it values only one two three. We could just type it in there, of course But I'm gonna put a copy and paste 130,000 in cells c5. I'm not gonna put any Commas or anything like that when we select enter it will then populate for us We then know that we are going to credit something I'm gonna use a formula to put the credit in there I do need to put a negative credit in there. So either type in negative 130,000 or Put the negative and then point to the cell Excel will then take the 130,000 multiply times negative one to get a negative 130,000 then we just need to know what this account is now remember It's the owner that put this 130,000 into the business therefore We're really gonna look for that owner capital or equity account, which is the owner capital in this case So capital is here that will then be the other account. I'm gonna right-click and copy that I'm gonna put that in cell B6 right-click and paste one two three Then I'm gonna we're gonna double-click before the O and an indent three times and enter So again, you could use the home like if you wanted to indent without having to click the spacebar three times You could click here and go to the home tab Alignment and increase indent and that would do the same thing sometimes when the cells are locked However, that that doesn't work. So you have to just use the spacebar. Alright, then we're gonna post this Remember that this whole worksheet right here. This is sometimes referred to as the general journal That's just like the piece of paper. We put the journal entries on. This is the journal entry The process of recording journal entry the act of what we just did recording this journal entry is Journalizing the journal entry so these terms can pop up in multiple choice questions sometimes and now we're gonna do the process of Posting this is the process of posting the journal entry to the general ledger So this is the process of posting so we're gonna start with cash cash is the first account on the trial balance Therefore also the first account on the general ledger the GL The cash account has a debit and credit side to it We will be on the debit side first because we're recording the debit over here to the debit over here We will be using formulas and I highly highly recommend using formulas because it helps us to tie everything together If there are problems Formulas help them solve the problems. So use formulas So I'm gonna say equals for the formula and I'm gonna just point to this 130,000 when we select enter it will then populate this cell to 130,000 and this will then be populated here as well in cash as 130,000 So there we have it 130 130 we're out of balance by 130 meaning we have a debit and we have no other credit to Cancel it out that other credit, of course being the capital account now The capital account is down here on the trial balance is gonna be in the same order over here assets then liabilities then equity So equity is right there. I'm gonna make this a bit smaller by using this icon I'm at a hundred and thirty percent of normal size if I click this this down arrow or if I hold down shift and scroll down It will take this size down to 120 in this case that might be enough I'm gonna scroll up just a bit so we can see that so now I can see this all in one space so we can see the entire worksheet here and so I'm gonna go over here to so O20 so I'm in the owner capital which has a debit and credit We want to be on the credit side because we had in the credit side over here So we are in so O20 then and we're gonna use the same formula I'm just gonna say equals and point to that credit. So I'm gonna say equals then I'm gonna take my cursor and point to that credit right there and That means it's just gonna pull it over. This is gonna populate up to 130,000 it will populate over here as well alt automatically. We will then be back in balance no effect on net income So enter so it's populated over here. It populated over here We're back in balance meaning that cash Of a debit equals the what is owed to the owner and capital count of a credit so debits and credits are equal meaning debits minus the credits equals zero and We have no effect on net income So that's gonna be the first transaction now note that we are recording this entire thing as we go meaning I'm recording this journal entry Then posting it and then we're seeing what happens to the trial balance and whether or not we are in balance at the same time When you do a lot of book problems Especially because you generally have to do it by hand or sometimes use some kind of software But they often will make you do the entire Journal entries then post all journal entries like all a through f in this case to the general ledger and then Post all the GL accounts to the trial balance That that's not a bad way of doing it could be faster in some cases But the problem is if you're out of balance at the end you won't know where you're out of balance at and you kind of have to start The whole thing over a lot of times Therefore I recommend using excel because you can kind of see what's happening If you do it by hand you kind of have to do that otherwise you'd have to erase Basically these numbers each time and re-input those numbers Which might be a useful exercise to do. I would almost recommend doing that But I do recommend trying to put together some system such as this so that we can check our balance After every transaction so that we don't basically have to start all over again if there is a problem So anytime you can set up the system in that way. I would look for that It happens a lot in accounting where you're gonna Things will be going great throughout the month until you try to reconcile something at the end of the month You don't want to wait till the end of the month to reconcile something that you know is going to cause you a problem You want to make a system so you can kind of do it as you go any type of longer problem I would look to do it something like this and that'll help you work through it All right, we're going to do the second one here says be receive cash from client for work done So we're going to say is cash affected. I'm going to say yes, we received cash Cash has a debit balance. We're going to make it go up by doing the same thing to it Which in this case would be another debit So I'm going to copy cash in cell e5 by right clicking copy We're going to paste that in b8 by right clicking pasting not the normal pace but pasting one two three Values only we're going to put the amount then that amount being 13 000 We're then going to credit something for 13 000. So we debited cash We're going to credit something by saying negative of that number and enter Now we just need to know the account that will be credited and of course in this case We received cash from client for work done Therefore the reason we are getting cash is because we did the work at the same point in time When doing work we earn revenue. So We will copy this revenue account And paste it here in cell b9 I'm going to right click in cell b9 and paste it one two three Then I'm going to double click or we're going to double click right before the r And indent three times one two three on the space bar and enter Remember that we credited this account through this revenue one because we knew we had to due to the fact that we debited the Cash account, but if we think through it, we know that revenue is a credit balance normal balance account And that it only goes up in the credit direction clients or customers only pay us We don't typically pay clients or customers. Therefore, we increase it by doing the same thing to it as its normal balance Which is a credit well then post this out This is the journal entry that we just processed of journalizing the journal entry Now we will go through the process of posting the journal entry to the general ledger We're going to post this first part first cash There's cash here. Here it is on the trial balance. Here it is on the general ledger the first account We're just going to skip a line now Notice that oftentimes we'll have the dates here on another column I've eliminated the dates just so we have less data So note that it's always going to be an order by transaction by the number of transactions That we're going to have so we're always going to basically skip another line Whether it be a debit or credit typically and have a new transaction on a new line Now note that some problems and some textbooks may try to save space by actually putting You know credits over here like right next to the debit But typically we would like to have a new line for each transaction within The account whether they be debits or credits So i'm going to be here in j 10 and we're going to say that equals and just point to this 13 Again, you could type in 13, but it's far better to use the formulas because if there's a problem You will be much better off when we hit enter. It's going to take that 130,000. It's going to increase it in the debit direction to 143,000 that 143 now also being shown on the trial balance putting us out of balance by 13 The debits being greater than the credits by the 13 until we post this second piece The revenue account is down here. So it's going to be in the same order as its liabilities Equity and then revenue Same order here. So revenue is going to be down here I'm going to try to make the screen a bit smaller again. So I'm going to hit this negative And make it a bit smaller So now I can see this cell and this cell at the same time. So i'm down here in the revenue account It's a credit over here. Therefore. It's going to be a credit over here So I'm in the credit column. We are way down in 025 so 025 I'm going to say that equals And then take the mouse and point to that 13,000 credit And when we select enter, this will go up to 13,000 It will also populate over here in the revenue account It'll put us back in balance and net income will go up in the credit direction So there we have this this is being pulled over here That's going to make us in balance meaning the debits equal the credits Revenue is now revenue minus expenses means that we have a credit balance net income then of 13,000 Remember that this is not a loss. I'm going to make this a bit larger again and go back over here I'm going to make this 130 scroll back to the left So this does not mean that we have a loss It means that we have a credit to balance meaning the credits of revenue beat the debits of expenses by 13,000 That is our current revenue. So what happens in C? We have paid cash to employees $780 is cash affected. Yes, it is because we paid something and therefore cash is going down Cash has a normal debit to balance We are going to make it to go down by doing the opposite thing to it Which in this case is a credit going to copy cash I'm going to put that on the bottom. So there's c. I'm going to put it underneath the c right click and paste 123 The amount will be 780. So we are over here in d12. We're going to put negative 780 Then we're going to put something on we're going to put the debit on top We could just type in 780. I'm going to use a formula by saying negative of that cell Then we just need to put the account up here in the top of this transaction. We paid for Employees therefore we're going to look through these accounts and we see an account called wages expense So that looks like the account. I'm going to copy that I'm going to put that on top and be 11 right click paste 123 Then we're going to double click in front of the c and indent three times and enter Now we debited the wages expense because we credited cash and needed an equal number of debits and credits But we also know that the expenses are debit balance normal balance accounts and they only go up Therefore we're going to increase the expense with a debit Now we're going to post this now I'm going to post the expense first and the expense is way down here So we've got assets liabilities revenue and then expenses It's going to be in the same order when we post to the general ledger So it's going to be way over here on this side. So here are the expenses Therefore, I'm going to make the screen a bit smaller and see if we can see more of these two pieces at the same time So I'm going to say make it a bit smaller like that. I'm going to scroll over a little bit So now we can see uh, this account here It's going to be posted all the way over here to the utilities We're going to post it in the debit column. So the debit column is way over here in r 15 so I'm in r15 You could type it in there But I recommend using the formulas because it'll make it much easier when you have problems Equals then go way over here and point to that 780 When we select enter, it's going to populate this to 780 It's going to populate this to 780 It's going to put us out of balance by 780 and it's going to bring net income down by 780 enter So there we have that the running balance is at 780. I'm going to make this a bit larger again now back up to 130 We see that uh, we're out of balance by 780 net income is now 13,000 minus 780 Or 12,000 to 20 the credits of revenue beating the debits of expenses by that 12,000 to 20 Then we're going to post the cash. Here's the cash We're going to post that to a new row Notice that cash is affected a lot more than any other transaction. It always will be you'll get a good idea of what's happening to cash first which can clearly be seen by Looking at the general ledger for cash So we're on the credit side this time. So it's a credit. We're on the credit side. We are in a new row I'm not going to put the credit up here Although you might have some textbooks which do that to save time typically not a good format though because we want you know each New date trend we wanted an order by date and in order to do that. We need a new row So we're going to say this equals this 780 that's going to bring this 143 down by 780 because that's a debit balance account And it's going to populate that same number over here and put us back in balance So there we have that brings us from 143 down to 142 to 20 We see that amount here as well back in balance down here Next transaction transaction D Says received cash for work that will be done in the future So we got cash for work that will be done in the future is cash affected We're going to say yes because we received cash Cash has a debit balance therefore We're going to make it go up or 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 We're going to put that on top of our journal entry in b14 right click and paste 123 The amount will then be 19 five. So I'm going to put one nine five zero zero No commas or anything else enter and it will it will then format the sell for us Then over here in d15 We're going to say negative Of that number it's going to take that number multiply times negative one to give us the 19 five there Now we just need to know what account that should be We're looking for received work for work that will be done in the future So we're getting money from the client, but we have not yet earned the money We're going to earn it sometime in the future Therefore we cannot post it to the revenue as we would like to Because we have not earned it under the revenue recognition principle And we'll have to post it to the liability Unearned revenue. So I'm going to copy that I'm going to paste it down here in b15 right click paste 123 values only Then we're going to double click in front of the u indent three times and enter Now we already know that we're going to credit this because we debited cash But if we were to think about it on its own We would say that unearned revenue is a liability account Liabilities have a normal credit balance The bad thing is going up in that we owe something in the future due to this transaction We don't owe the money back necessarily, but we owe the work to be done in the future Therefore it's a liability until we do the work So that's going to be our journal entry. We're going to post this This is the journal entry that we just journalized into the journal ledger Which we will now post to the general journal Posting cash first We've got the 19 five here cash is our first account on the trial balance and therefore the first account on the general ledger We're going to skip another line. We're going to put it on a new line have its own line here in cell j 12 J 12 is going to equal going to point to this 19 five This 142 220 will increase by the 19 five to 161 720 which will also populate here on the trial balance put us out of balance by The 19 five until we record the other side in this case to unearned revenue Unearned revenue is down here on the trial balance Same order on the general ledger assets and then liabilities. Therefore. We are over here in cell Oh 14 oh 14 so we're going to say that equals and then point to this 19 five When we select enter, it's going to bring this up to 19 five credit And that same credit will populate over here in unearned revenue So there we have that we're back in balance as well No effect on net income from that transaction note Next one we said paid cash for utilities Once again, we're going to say is cash affected and we're going to say yes keyword paid So we're going to say cash has a debit balance We need to make it go down because we paid something Therefore we're going to do the opposite thing to it as its normal balance, which in this case is a credit So we're going to copy cash in e five We're going to put that account underneath the e here in cell b 18 Right click and paste one two three The amount will then be 975 so i'm going to put that over here in d 18. It's going to be a negative 975 and enter so there's the credit we got that right 975 correct Then we're going to put the debit up above on top in c 17 That's going to be a negative of this number Then we just need to put the account here What's going to be the account once again? It's for paid for utilities So if we look through our chart of accounts, we see how about Utilities expense that looks like the right transaction So that's going to be the note here that an error was made here. We have an error here on the General ledger in that this 780 I posted to utilities expense when it should have been posted to wages expense I'm going to go ahead and correct that so let's take a look at that now I'm going to scroll back over here We're going to say we got posted to utilities expense here. I'm going to delete that I'm going to post it to wages expense right here So by I'm going to make this a little bit smaller so we can see more of the screen at one time And it's going to go right here on r 9 and that's going to equal that I'm going to point to the 780 and enter So basically it was in the expense, but it was in the incorrect expense I'm going to put it up in the correct expense. Now we can post the utilities expense make this a bit larger again So I'm going to reformat this cell back to Blue And then we need to debit the utilities expense here. I'm going to copy utilities expense Put that on top in the b17 right click paste 123 We're going to double click before the c And indent 123 times Then we're going to post this out. So we've got the utilities expense now This is the general journal which is posted Which is going to be posted now to the general ledger notice in the same order We've got assets liabilities equity income and expense. We're way down here in the final account utilities I'm going to make this a bit smaller again and see if we can see This all in one page. So here's utilities way over here See if we can get the right account this time. So we're posting this utilities to utilities way over here in the debit side That cell being r15. So in r15 That equals this 975 Once we select enter it will record that 975 here It will then populate over here as well. Take us out of balance by 975 and enter So there we go Now we're out of balance by the 975. I'm going to make this a bit larger again Back to 130 we see the utilities and then the cash. So here's cash Cash is going to be on the next line. So here's cash here. We want to be on the next line We want to be on the credit side. Therefore. We are in cell k13 We're going to say that equals and point to the cash here That's going to bring this balance down by 975 that balance will then be populated here as well Putting us back in balance here So there we have that Next final transaction where should we have paid cash for supplies? So once again is cash affected. We're going to say yes, we paid cash Cash has a debit balance. We need to make it go down. Therefore. We're going to do the opposite thing to it Which in this case will be a credit. So i'm going to copy cash And we're going to credit cash. I'm going to put it down under the f right click pasting 123 And the amount will be 455. So that's indeed 21 negative 455 Then i'm going to double click before the c and indent three times Then we need a debit of something for 455 I'm going to represent negative of that number to flip the sign to record the debit Now we just need to know what to debit. It's for supplies. We will then find supplies There's supplies going to copy that Going to put that on top and be 20 right click and paste 123 Note that supplies is going to be debited for a couple reasons one because we credited cash And therefore we have to debit something and two because supplies is an asset account assets have normal balances of debits They need to go up because we bought more of them. Therefore, we're going to do the same thing to it Which in this case is another debit. We are now going to post this out. So there's supplies We're going to post it down here to j 25 note that supplies is the third account on the trial balance Therefore, they third account on the gl we are on the debit side on the general ledger Therefore on the debit side for the gl in cell j 25 Equals this 455 that will populate this to 455 It will populate up here to 455 put us out of balance by 455 So there's that 455 455 out of balance by 455 Now we're going to record the cash side, which is a credit. So here's the credit to cash We're going to record that right there in the credit side in cell k 14 Equals this credit that's going to bring this balance down by 455 That balance will then populate up here in the cash count on the trial balance Put us back in balance here on the trial balance and there we have that So that's going to be the recording of these transactions With the full general ledger again note that we're recording these as we go Rather than doing all the journal entries and then recording the gl And then recording the trial balance. This is typically how software would kind of work But not always how book problems will work because book problems are typically more on a on a Doing it by hand basis And in that format if we didn't have excel to kind of populate these cells For us Then it would be a lot of erasing to do this way But if you can set it up this way even if you have to do it a lot of erasing It may save you time in the long run It will save you time if you have excel it may save you time even if you have to do a lot of erasing Because it'll it'll show you when you run into errors And I guarantee you even if you have to do a lot of erasing It'll give you a better understanding than doing all this and then posting all that here And then posting the ending balance all here and then being out of balance and getting frustrated and starting over again So keep that in mind as you go and we'll work the next one next time Thank you