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Hello, financial accounting.
I would like to review problems 14-9A.
We're doing the general journal.
So what you'll notice is that I have the title.
Don't get sloppy, it is very important always to title what
you're doing.
Notice that we are working on page 1.
And now we have post-reference numbers.
These are the account numbers.
So if you look at page 118, you will
see a chart of accounts.
And that's where I'm getting these reference numbers.
Cash is always the one-on-one account, and so forth.
So make sure you refer back to page 118 so you can see which
accounts and where I'm getting the numbers from.
First, on January 1, we have invested cash in the business.
So cash first.
We have to make sure we write the date.
The description, cash.
And the debit amount of $10,000, because we are
increasing our cash because we are
depositing it into our account.
And then we have the capital account, which
is the credit account.
And we have to write something to tell us what this
transaction.
It's the original investment in the business.
Next, we have rent paid.
We know that that's rent expense.
We know that we're going to increase our rent expense.
And we're going to decrease cash.
And we've paid our rent.
On January 2, we purchase office supplies on account.
When we see that word on account, we know that it's an
accounts payable.
So we increased our asset by $300.
We also increased our accounts payable by $300.
Remember that we have debits and credits.
Debits are always listed first.
On January 1st, we purchased office equipment on account.
Again, on account, accounts payable.
So we have office equipment, debit $1,500.
Accounts payable, credit $1,500.
On January 6, we received cash for services
rendered for $580.
Cash is being increased, debited.
Consultation fees is being credited $580, and earned
consultation fees.
Make sure you're paying attention that I am always
writing down the date, writing down the
amount, listing the accounts--
which really should happen when we're
posting to our journal--
and always writing a description.
Six months from now, someone's going to look and
say, what is this?
And we're really not going to remember.
I wouldn't.
Next, we have a telephone bill.
Paid telephone bill.
If we're just paying it, that means we're paying with cash.
Telephone expense in cash.
And we write paid telephone bill.
We have utilities expense.
Because we're paying the bill, we're debiting the utilities
for $38 and crediting cash.
Received cash for services.
Cash and consultation fees.
And again, earned consultation fees.
We continue.
January 12, made payment on account.
We have accounts payable.
Remember back before on those two transactions when we
bought office supplies and equipment?
Well, now we have to pay them.
We're going to pay $50.
So we're going to reduce our liability.
And we're going to reduce our cash.
And we paid on account.
Transportation expense on January '13.
Paid for a car rental while visiting an
and out of town client.
Transportation expense, they tell us $150.
Paid for car rental.
Because we're not going to remember, always make sure you
put some type of description here.
Wages expense.
Our employees like getting paid.
So January 15, paid part time worker $360.
People like getting paid in cash, $360.
Received cash for services rendered.
More consulting fees, but this time cash.
Cash earned consulting fees.
Now, the owner would like to have a little extra money.
So we have the drawing account, $100, owners
withdrawal.
January 20, paid for a newspaper ad.
We have to advertise.
Advertising expense and cash.
Paid for newspaper ad.
Transportation expense.
Again, now we're paying for cab fare.
See, without even reading what it is, I know.
So it says, reimbursed part-time employee for cab
fare incurred delivering materials to clients.
Transportation expense, $35.
Paid for books on consulting practices,
miscellaneous expenses.
We need to know, maybe, right terminology, who knows.
But we purchased books for $28.
Again on the 25, we received cash for
services rendered of $320.
We earned cash.
We have more money, so we're paying down our liability
accounts payable, and cash for $150 paid on account.
Paid part-time worker.
They get paid twice a month.
It's the end of the month now.
Wages expense, cash, paid employee for $360.
Received cash for services rendered, $180.
Again, consulting fees, $180.
Now, the next thing that we do now that we have our general
journal is going to be to jouranlize our transactions.
Meet me at the next video.