 Hello in this lecture we will work on journalizing transactions right here we're going to journalize those transactions here and then we're going to post them to three different places one being the quick post to the trial balance in this entry section so we can see the activity in a quick and easy way and see what the effect is on the trial balance then we're also going to post it to the subsidiary ledger so these are going to affect accounts receivable much of the time and accounts receivable is representing what is owed to us and therefore we also need to know who owes us the money so we're going to start recording that to the subsidiary ledger which will be in order by client or customer in this case and then we're also going to record it to the general ledger so we want to see all of the type of activity that would happen when we're recording these transactions focusing on the accounts receivable cycle so we're going to see the quick reaction here to the trial balance directly analyze that then recognize the fact that we do want to sort this by customer in this case and that would be done through the accounts receivable subsidiary ledger and then of course we have the general ledger and we're only including the general ledger here for the accounts receivable account so we're not going to record every general ledger account of course every other account here would have a general ledger account but we're focusing in on accounts receivable and therefore we're just going to record the general ledger account for receivable to distinction to have a distinction between that and the subsidiary ledger here so of course we have our trial balance right here and that's going to have our assets are going to be in green we've got our yellow or orange or our liabilities the equity account in the light blue and then we got the revenue and the expenses on the bottom we know that we are in balance because the debits minus the credits equals zero and we're going to point post our activity here we also can see that net income is here this is actually income not a loss because it's the revenue less the expenses and there we have the income here and then of course we have our accounting equation up here where the assets are the green ones and then the liabilities notice there's no negative sign here because we flip the sign and then all of this is the equity there must be equity all right so now let's record these out so the first one says perform work on account and invoice the client and the client is Smith in this case so we got 35,000 we did work we invoice the client so is cash affected in this case no because we did the work on account and we sent out an invoice did not yet get the cash therefore we did get something we got an iou that iou being accounts receivable so we're going to say accounts receivables what we have received in this transaction and that is an asset account it's just in undercash and assets have debit balances we need to make it go up how do we make something go up we do the same thing to it as what it is which in this case would be another debit so i'm going to debit the accounts tape i'm going to copy that right click copy one two copy and then i'm going to put my cursor in c five and then right click and paste it one two three so we're pasting just the values not the formulas just the values here and we'll keep the cells looking like they are in that blue color and then we're going to put the amount 35,000 every debit is going to have an equal number of credits for every transactions we're going to have at least two accounts so we're going to have a credit here we will be representing the credits with negative numbers or bracketed numbers in the excel worksheet so we're going to type negative 35,000 and i'm going to hit enter and of course it'll format that cell for us with brackets because of the formatting of the worksheet then we just need to know what this us account should be and why are people going to pay us 35,000 because we did work and earned revenue and we could call this depending on the type of company revenue we could call it incomes we could call it sales we could call it fees earned it just depends on the type of company but it is going to be a revenue type account and of course it'll be down here in the revenue area i mean it's under the capital section on the trial balance so i'm going to copy that right click copy that we're going to paste that on the bottom credits traditionally go on the bottom so we are in cell c6 right click and paste 123 so i'm going to post this now to basically three different places i'm going to post it here to the trial balance so we can see a quick easy beginning and end at trial balance then we'll post it to the subsidiary ledger at least the receivable side of it and then we will post the receivable side of it to the general ledger so let's do that now we're going to say the receivable is here so we're here's the receivable it's a second account so we are in i6 and say equals and then we're going to point to that 35 000 what's going to happen we'll go up here we'll go out of balance by the 35 000 so the 35 represents that customers over 35 and now we are out of balance by the 35 we will then post a revenue in i14 so i14 equals i'm going to point to that 35 000 credit what will happen the credit will go up in the credit direction because we're doing the same thing to it will be back in balance net income is going to go up from the transaction so we're recording revenue revenue is being recorded when we did the work not necessarily when we get the money because we haven't got any money yet so now we're going to record that same account receivable to the subsidiary ledger here so we need to record it by customer why because oftentimes when we look at the trial balance we're going to say who owes us money or how much do people owe us people owe us 35 000 the next question we're going to have is well when are we going to get that money and who owes it to us let's call those people and to do that we're going to need to know the subsidiary ledger by the account receivable by customer using the subsidiary ledger so here we have smith we're just going to record that same debit side to this account here in the subsidiary ledger i'm going to say equals and that's going to point to that 35 000 again now treat it also we're going to have this stuff in the general ledger so i'm not going to post the entire general ledger out but just to recognize that there is a difference we're talking about something different in the subsidiary ledger than what we have seen in the general ledger the general ledger would be posting transactions in order by date or the order of the transaction so we can post the same thing in the AR subsidiary on general ledger so we could say that this equals that same 35 000 and we see that the 35 000 in this section is going to be the same information that will be recorded here it's just that it'll be recorded slightly differently right here it's only recorded by date right here it's recorded by customer and of course the end of it we have the 35 here 35 is what adds up all the customers that ties out to the trial balance all right next transaction we're going to scroll over here and we're going to say that's received cash on account from client smith for work performed in the past so now smith paid us this 35 000 that would be the natural transaction that would happen hopefully sometime in the future we'd get a check in the mail therefore we're going to ask our questions is cash affected yeah we received money we got cash cash has a debit balance we need to make it go up how do we make something go up we do the same thing to it which in this case would be another debit so i'm going to copy the cash we're going to put that in cell c8 so i'm going to right click and put that in c8 and how much did we receive 35 000 because that's that that's what we build them for 35 000 and so we're going to credit the same amount so there's going to be equal number of debits and credits and then we're going to say well and uh why did they pay us 35 000 because we did work but we did work in the past so we're not going to credit the receivable account we already did the work in the past they owe us of course the 35 000 that we put right in the receivable now they paid us that they no longer owe us that therefore that 35 000 debit there needs to go down how do we make something go down we do the opposite thing to it as what it is that's a debit therefore we need to credit it to make it go down we already knew that because we debited cash so that's where the credit's going to go it's going to make the receivable back down to zero so i'm going to copy that i'm going to paste it in c9 right click and paste 123 values only in c9 recognize what is happening here we're just getting a better asset cash and we're losing the worser asset the accounts receivable i know that may not be a word but it sounds good so the receivable is going down cash is going up and uh no effect on revenue for this transaction so let's post it out and see what happens we're going to go up here to i5 i5 equals we're going to point to that 35 000 what's going to happen cash will go up by 35 000 because the debit and the debit makes the debit go up in the debit direction to 603 000 then accounts receivable there's something in it here i can see it in the formula bar well of course d5 is in there that's the d5 here in order to post to it i'm going to double click on it go to the end of it and say plus and then point to this uh 35 000 here and now we see there's two things in there there's the 35 debit the 35 credit one's a positive one's a negative one's a debit one's a credit that's going to make it go down to zero again so even though we have a zero there we can see what's in there and i like to use these icons to point to them and we can see okay that makes sense it went up and went down and if you want to know where those icons are they are in the formulas tab and they are in the formulas auditing and here they are here so then i can turn them off with this thing here all right so we're going to also post those out to the subsidiary ledger and so we're going to say no one owes us any money right now therefore we have to reflect that in the subsidiary ledger meaning smith doesn't owe us any money anymore so we're going to post that same activity in m 10 so this equals the 35 000 and that means smith no longer owes us so this would be the normal activity within a receivable account of course it goes up and then hopefully they pay us it goes down we invoice them we got a check in the mail that's what it should look like if we just look at that in the general ledger we'll post the same activity the general ledger again we're not going to post all the accounts of course to the general ledger we would be posting both the general ledger cash and receivable in real life we're doing the full problem but we're just looking at the receivable the accounts receivable gl account general ledger account and we are in the credit side so we're going to say this equals that same credit so same activity by date so we don't know who necessarily by this 35 by this general ledger account but we can see that it went up went went down we could probably make a safe bet that that's the same client and it may not be of course right next to each other in this activity we could have other sales involved but that's the type of activity we expect to see in the receivable account much of the time so now of course we have zero here the subsidiary ledger adds up to zero and that's what's on the trial balance as well next one perform work on account and invoice the client atoms all right so we're going to do work on account so is cash affected or we did work on account is cash affected and answered no because we did it we're on account and we issued an invoice when we issue an invoice this because we did work and therefore we earned revenue and we have received we believe we've received the intangible asset of an IOU called accounts receivable so accounts receivable is an asset has a debit balance just like cash it needs to go up because people owe us more money how do we make it go up we do the same thing to it which in this case would be another debit so we're going to copy the receivable and right click copy that i'm going to put that in c11 right click and paste it 123 the amount being for 14 000 in this case if we debit something