CH2
CH2
CH2
2
Double-Entry System
• Double-entry accounting (複式簿記) demands the
accounting equation remain in balance, which means
that for each transaction:
At least two accounts are involved, with at least one
debit and one credit (兩個以上之帳戶,至少一個借方一
個貸方).
DEBITS must equal CREDITS. The total amount
debited must equal the total amount credited.
Transaction Accounts Debit and credit
The sum of the debits for all entries must equal the sum
of the credits for all entries. 3
Debits and Credits
Account Title Right
Left
Side Side
Debit Credit
正常餘額在左邊 正常餘額在右邊
Left side is Net increases or decreases on
Right side is the normal
the normal one side have equal net balance side for
balance side
effects on the other side. liabilities and equity. 4
for assets
Debits and Credits
2-4
Debits Credits
Increase assets Decrease assets
Assets Liabilities
Debit for Credit for Debit for Credit for
increase decrease decrease increase
Normal Normal
balance balance
Debits should Credits should
exceed credits exceed debits 5
Debits and Credits
Assets
Cash
Owner invests $700 in cash in Dr. Debit Cr.
Credit
exchange for common stock.
Company pays $100 cash for 700 100
supplies. 300 400
Company provides service and
collect $300 cash. Bal. 500
6
Debits and Credits
Liabilities
Accounts Payable
Company purchases $800 of Dr. Debit Cr.
Credit
supplies on credit from a supplier.
Company pays supplier $500 500 800
toward the payable of the last
transaction. Bal. 300
7
Debits and Credits
Debits Credits
Decrease Equity Increase Equity
8
Debits and Credits
Dividends
Debit for Credit for
increase decrease
Normal
balance
9
Debits and Credits
Equity
Share Capital
Owner invests $700 in cash in Dr. Debit Cr.
Credit
exchange for ordinary shares.
700
Bal. 700
100
Bal. 100
10
Debits and Credits
Debits Credits
Decrease revenue Increase revenue
Expense Revenue
Debit for Credit for Debit for Credit for
increase decrease decrease increase
Normal Normal
balance balance
11
Debits and Credits
Equity
Consulting Revenue
Company provides consulting Dr. Debit Cr.
Credit
services and receives $1,000
from client. 1,000
Bal. 1,000
Utilities Expense
Company pays $300 cash for Dr. Debit Cr.
Credit
January utilities expense.
300
Bal. 300
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Debits and Credits
2-7
Debit
Credit
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EXERCISE
Debits:
a. increase both assets and liabilities.
b. decrease both assets and liabilities.
c. increase assets and decrease liabilities.
d. decrease assets and increase liabilities.
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Equity Relationships
2-6
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The Recording Process
1
2-7
Analyze each
transaction and event
from source
documents (原始憑證)
2
4
Record relevant
transactions and
Prepare and
events in a journal
analyze the trial
(日記簿)
balance (試算表)
3
Post (過帳) journal
information to ledger
(分類帳) accounts
17
Journalizing
• Journalizing (分錄) is the process of entering transaction
data in the journal.
• There are three things you need to know in order to be
able to record a journal entry:
➊ What accounts and what type The company pays
of account that are affected? $2,500 cash for supplies.
➊ Cash (Assets)
➋ Whether the account increases
Supplies (Assets)
or decreases?
➋ Cash (Decrease)
➌ What is the dollar amount? Supplies (Increase)
➌ $2,500
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Journalizing
• A journal entry includes following information about each
transaction.
On 9/1, shareholders’ invested €15,000 cash in the corporation in
exchange for share of stock, and Softbyte purchased computer
equipment for €7,000 cash.
2-8
交易日期 記入貸方科目及金額於次一行,首字後移
記入借方科目及金額 交易事項摘要 類頁 (Reference)
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Transaction Analysis
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The Ledger
• General Ledger (總分類帳) contains the entire group of
accounts maintained by a company.
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Posting
• Posting (過帳)- Recording process accumulates the effects
of journalized transactions in the individual accounts.
2-12
過入借方帳戶
將借方帳戶編號記
入日記簿之類頁欄
過入貸方帳戶
將貸方帳戶編號記
入日記簿之類頁欄
22
Chart of Accounts
會計科目表
23
The Recording Process Illustrated
2-14
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The Recording Process Illustrated
25
The Recording Process Illustrated
26
The Recording Process Illustrated
27
The Recording Process Illustrated
28
The Recording Process Illustrated
29
The Recording Process Illustrated
30
The Recording Process Illustrated
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The Recording Process Illustrated
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The Recording Process Illustrated
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34
35
EXERCISE
8/5
8/20
8/31
37
EXERCISE
Share Capital
Office Supplies
Photography Fees Earned
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Trial Balance
• A trial balance (試算表) is a list of all ledger
accounts and their balances (either debit or credit)
at a point in time.
➀ The trial balance proves the mathematical
equality of debits and credits after posting.
➁ A trial balance may also uncover errors in
journalizing and posting.
➂ A trial balance is useful in the preparation of
financial statements.
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Trial Balance
• Preparing a trial balance involves three steps:
List each account title and its amount (from ledger)
in the trial balance.
Compute the total of debit balances and the total of
credit balances.
Verify (prove) total debit balances equal total credit
balances.
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The Trial Balance
2-21
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Trial Balance
• Equality of debit and credit totals in a trial balance
does not guarantee that no errors were made. There
are limitations of a trial balance:
➀ A transaction is not journalized.
➁ A correct journal entry is not posted.
➂ A journal entry is posted twice.
➃ Incorrect accounts are used in journalizing and
posting.
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EXERCISE 2.12