AA015 TOPIC 3

FINANCIAL ACCOUNTING
AA015

KOLEJ MATRIKULASI
NEGERI SEMBILAN
SESSION 2020/2021

TOPIC 3

THE ACCOUNTING
CYCLE

LEARNING OBJECTIVES

Steps in The Accounting Cycle
Types of Business Documents
Journalizing Process

Posting To General Ledger

Preparing Trial Balance
Preparing Financial Statement For Service and
Merchandising Entities

3.1 STEPS IN ACCOUNTING CYCLE

Transactions 2
Analysis
Journal records 3 4
(Document
Source) Post to ledger Trial balance 5

Adjustments

9 7 6
Post- closing Adjusted
Trial Balance Statement of trial balance

8 Comprehensive Income
Closing entries & Statement of

Financial Position

3.2 Types of Business Documents

The document is a source of business written
as a proof for each business transaction that
has occurred.

The function of business documents is a
sources document for reference and
information.

Only the document source of information
should be recorded in accounting books.

INVOICE

To record credit
transaction.

DELIVERY NOTE

Delivered goods to the
customers.

DEBIT NOTE

To inform that the
customer account has
been debited

(Debt increases)

CREDIT NOTE

To inform that the
customer account has
been credited

(reduced debt.)

PURCHASE ORDER

The details of goods
to be purchased

RECEIPTS

As an evidence for
Receipts and payments
have been made.

PAYMENT VOUCHER

PEMBAYARAN DALAMAN To record any
kind of payment.
(Peraturan 57 )

Nama Kesatuan Sekerja
………………………………………………………………………………… ..……
…………………………………………………………………………………
Tarikh : …………………………………… .. ……………………………………
No. Baucer: ……………………………… ... ………………………………

________________________________________________________________

__________________________________________

________________________________________________________________

__________________________________________

BUTIR BUTIR PEMBAYARAN BUTIR-

Amaun

RM sen

________________________________________________________________

__________________________________________

________________________________________________________________

__________________________________________

Pembayaran diberi kuasa oleh
……………………………………… .. Presiden ………………………… ...
Bendahari ……………………………………….. …………………………...
……………………………………… .Setiausaha ………………………… ...

Tandatangan Penerima
……………………………………….…………………………...
Tarikh : ………………………… ... …………………………

________________________________________________________________

__________________________________________

________________________________________________________________

__________________________________________

Borang baucer ini mesti digunakan bagi pembayaran jenis dalaman di
mana resit asalnya tidak dapat diperolehi …… .. ... ...

CHEQUE BUTT

Cheque butt used as a
reference for the cheque
payment by the
company.

BANK SLIP

Record deposit
or withdraw
money made by
the customers.

bank statement

Issued by the bank to the account
holder at the end of the month.

SPECIAL JOURNAL

Consist of:
 Sales Journal
- to record all credit sales of merchandise.
 Purchases Journal
- to record all credit purchases of merchandise.
 Cash receipts journal

-to record all cheques and cash receipts.

 Cash payments journal
- to record all payments made by cash or cheques.

16 AA015

General Journal

 In the trading firm, General Journal is used to record
items that cannot be recorded in a special journal,
namely: -

 Asset investment in business (except cash)
 Goods drawings
 Sales of fixed assets on credit
 Purchase of fixedAsset on credit
 return on sales / return outwards
 Purchase return / return inwards
 Adjustment entries
 Closing entries

Transaction: Purchase

Purchases of goods

cash purchase credit purchase

Transaction : Sales

sale of goods

Cash sales credit sales

Transaction: Types of Discount

Encourage the purchases / sales

Trade discount Cash Discounts

Purchase discount Sales discount

Transaction : Trade Discount

Discount offered Example
for bulk buying Buy 100-200 units = 10%
Buy 201-300 units = 20%

no record needed.

Cash Discount

Cash discount Credit Term:

obtained The last
payment is
after payment 2/10, n/30 due (credit
made within
maturity
Discounts period and will period)

be recorded discount discount
in the account percentage period

The discounts calculation starts from the date of invoice

credit terms, cash discount

credit terms: 2/10, n/30

If paid within No Full payment
10 days from must be made
date of invoice within 30 days of
the invoice date.

Yes Example: Buying goods on

Cash discount credit amounting to RM1,500
of 2%
credit terms 2/10, n / 30.

Payment will be due within 10

days as follows:

Invoice RM1,500

Less discount 2% 30

Net total RM1,470

Purchase Returns

Purchase Returns

When merchandise are
returned
to the seller

Sales Returns

Sales Returns

When merchandise are
returned

by customers

Freight Cost

Purchase Agreement
that state whether

Seller or buyer
pays freight costs
Freight in/ freight out

March Parit 18 Enterprise Business Transactions :
2011 Wholesale traditional biscuits.

1 Transactions
2
3 Starting a wholesale business in traditional biscuit with RM100,000 as initial capital CRJ
into the bank.
4 Purchased a vehicle worth RM50,000 credit by issuing Notes Payable, 5%, for a GJ
period of 5 years from Toyota Capital.
6 Purchased biscuits RM30,000 from suppliers, Hani Enterprise and payments are CPJ
made by cheque (.no 515)
11
100 boxes of cookies sold on credit to Jasni Enterprise, invoice no. kz001, RM SJ
16,800 . Terms of 2/15, n / 30.
Sold 50 boxes of biscuits for RM10,200 to Dani Enterprise, invoice no. kz002, terms SJ
2/15, n / 30
Purchased biscuits of Rm 52,600 from Doremi Enterprise, invoice dated on March PJ
11, Terms of 2/15, n / 30.

Parit 18 Enterprise Business Transactions :
Wholesale traditional biscuits.

March Transactions GJ
2011

12 Jasni returned faulty goods worth RM800.

14 Received payments from Jasni Enterprise for sale on 4 CRJ
March.

16 Received credit memo from Doremi Enterprise RM 200 , GJ
for the returned of faulty biscuits.

21 Sent a cheque no. 516 to Doremi Enterprise, for the CPJ
payment of an invoice dated on March 11, after good
returned and discounts.

Parit 18 Enterprise Business Transactions :
Wholesale traditional biscuits.

March Transctions
2011
Purchased biscuits from Wali Enterprise on credit RM 41,625, an PJ
22 invoice dated March 18, terms 2/15, n / 30

31 Issued Cheque no. 517, RM15,900 to the salaries department , for CPJ
employee's salary payments.

31 RM 134 680 cash sales. CRJ

Instructions :

1. Record the business transactions of Parit 18 Enterprise into the
appropriate journals.

2. Post to the appropriate ledgers.
3. Prepare the trial balance as at 31st May 2011.

SALES JOURNAL (SJ)

RECORDING SALES TRANSACTIONS ON CREDIT.

Mac sales transactions on credit.

4 100 boxes of cookies sold on credit to Jasni Enterprise, invoice no. kz001, RM
16,800 . Terms of 2/15, n / 30.
6
Sold 50 boxes of biscuits for RM10,200 to Dani Enterprise, invoice no. kz002, terms
2/15, n / 30

SALES JOURNALS

Date Accounts Debited Terms Accounts Receivable– Dr
March Sales– Cr
2/15,n/30 RM
4 Jasni Enterprise 2/15, n/30
6 Dani Enterprise 16,800
31 total
10,200

27,000

PURCHASE JOURNAL (PJ)

RECORD PURCHASE TRANSACTIONS ON CREDIT

Mac purchase transactions on credit

11 Purchased biscuits of Rm 52,600 from Doremi Enterprise, invoice dated on March 11,
Terms of 2/15, n / 30.
22
Purchased biscuits from Wali Enterprise on credit RM 41,625, an invoice dated
March 18, terms 2/15, n / 30

PURCHASES JOURNAL Acc Purchases - Dr
Date Accounts Credited Terms Accs Payable –Cr
Mac
11 Doreme Enterprise 2/15,n/30 52,600
22 Wali Enterprise 2/15, n/30
31 Total 41,625

94,225

B

CASH RECEIPTS JOURNAL (CRJ)

RECORD ALL TRANSACTIONS OF CASH RECEIPTS / BANK (CHEQUE)

Mac Tramsactions – Cash Receipts

1 Starting a wholesale business in traditional biscuit with
RM100,000 as initial capital into the bank.

14 Received payment from Jasni Enterprise for sale on 4
March.

31 RM 134 680 cash sales.

CASH RECEIPTS JOURNAL

Date Accounts Cash Bank Sales
Mac Credited Dr Dr Discount

s
Dr

1 Capital 100,000

14 Jasni Ent. 15,680 100,000 *320
31 Sales 134,680 320
31 Total 150,360

* 2% x 16,000

B. 1 B.2

CASH PAYMENTS JOURNALS (CPJ)

RECORD PAYMENT TRANSACTIONS IN CASH / CHECK (BANK)

Mac Cash payments transaction
3 Purchased biscuits RM30,000 from suppliers, Hani Enterprise
and payments are made by cheque (.no 515)
21 Sent a cheque no. 516 to Doremi Enterprise, for the payment of
an invoice dated on March 11, after good returned and
discounts.
31 Issued Cheque no. 517, RM15,900 to the salaries department ,
for employee's salary payments.

B. 1 B.2

Cash Payments Journal Bank Purchases
Date Accounts Debited Cash cr Discounts
Mac cr
3 Purchases 30,000 *1,048
21 Doreme Enterprise 51,352

31 Salary Expenses 15,900 1,048
31 Total 97,252

* 52 400 x 2%

GENERAL JOURNAL (GJ)

RECORDING TRANSACTIONS THAT ARE NOT RECORDED IN SALES JOURNAL,
PURCHASES JOURNAL, CASH RECEIPTS JOURNAL AND CASH PAYMENTS
JOURNAL.

Mac Transactions recorded in the General Journal
2
Purchased a vehicle worth RM50,000 credit by issuing Notes
12 Payable, 5%, for a period of 5 years from Toyota Capital.

Jasni returned faulty goods worth RM800.

16 Received credit memo from Doremi Enterprise RM 200 , for the
returned of faulty biscuits.

General Journal

Date Account title and explainantions Debit (RM) Credit
Mac 50,000 (RM)

2 Vehicle 50,000
Notes Payable

( Purchased a vehicle from Toyota Capital)

12 Allowances and sales Returns 800
Receivable Accounts – Jasni 800

(To record sales returned)

16 AccountsPayable – Doreme Enterprise 200
Allowances and Purchase Returns 200

(To record purchase returned)

B

SUBSIDIARY LEDGERS

SUBSIDIARY LEDGER OF SUBSIDIARY LEDGER OF
ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE

RECORDS ALL TRANSACTIONS OF RECORD ALL TRANSACTIONS OF
DEBTORS CREDITORS

3.4 POSTING RECORD TO GENERAL LEDGER

General ledger Definition : The whole group of accounts controlled by
a business. It consists of all assets, liabilities
the owner's equity.

Posting is the process of transfering records from the journal into the
appropriate ledger.

Based on the question Parit 18 Enterprise, specify the general ledger accounts to be prepared……

Sales Journal Sales, Account Receivable
Purchases Journal Purchases, Accounts Payable
Cash Receipts Journal Cash, Sales Discounts,
Capital, Sales, Account Receivable.
Cash Payments Journal Cash , Bank, Purchase Discounts , Capital, Purchase , Accounts Payable.
Salary expenses
General Journal Vehicle, Notes Payable, Sales returns
Purchase returns, PA , RA.

3.5 PREPARATION OF TRIAL BALANCE

• TRIAL BALANCE - LIST OF ALL THE GENERAL LEDGER

ACCOUNT BALANCES.

• THE TOTAL ON THE DEBIT SIDE OF THE TRIAL BALANCE

MUST BE EQUAL TO THE TOTAL OF CREDIT SIDE .

• TRIAL BALANCE IS PREPARED TO CONFIRM/VERIFIED

THE BALANCE OF TOTAL DEBITS AND THE TOTAL

CREDITS AT THE END OF AN ACCOUNTING PERIOD.

• IN CONCLUSION, THE TRIAL BALANCE IS A SUMMARY OF

ACCOUNT BALANCES OF THE LEDGER.

Perniagaan Parit 18 Enterprise
Trial Balance

As at 31 March 2011

Accounts Debit (RM) Credit (RM)
100,000
Capital 2 748
Bank 150 360 161,680
Cash
Sales 320 1,048
Sales discounts 124 225 50,000
Purchases
Purchase discounts 15,900 200
Payable notes 50,000 41 625
Salary expense
Vehicle 800
Allowances and Sale Returns
Allowances and Purchase Returns 10 200
Accounts Receivable
Accounts Payable

354 553 354 553

3.6 Preparation of Financial Statements for
Business Merchandising

Sales less

Cost Of = less
Gross profit

Goods Sold

Operational =

expense Net profit/

loss

3.6 Preparation of Financial
Statements for Business Services

less

revenue

= Net
Expense profit/loss

Comparative Statement of Comprehensive Income
between Merchandising Business/entities and
Services Business/entities

Services Business Merchandising Business

Syarikat Pengiklanan Kemboja Kedai Runcit Amanda
Statement of Comprehensive Income for the year Statement of Comprehensive Income for the year ended

ended 31st December 2010 31st December 2010

Revenue RM Sales RM
Less: 100000 Less : COGS 100000
Operational expense Gross Profit 50 000
Non-Operational expense (50 000) 50 000
(10 000)

Net Profit 40 000 less : (10 000)
====== Operational expense (2 000)
Non Operational expense

Net Profit 38 000
=====

Income Statement Entreprise
Format Examples Comprehensive Income Statement
For The Year ended 31st March 2011

Sales (RM) (RM)
- Discounts Allowed 167,280 166,140
-Allowances and Sales returns
Net sales (540)
Less : Cost Of Goods Sold (600)
Beginning Inventory
+ Purchases 800
- Discounts Received
-Allowances and Purchases returns 124,225
Net Purchase (1,048)
+freight
+ purchase duty (200)
Purchases cost 122,977
Cost of Goods Available For Sale
-Ending Inventory 500
Cost of goods sold 200
Gross Profit
+ others revenue 123,677 (104,477)
124,477 61,663
Rental received ( 20,000)
1 000
Less : Operational Expenses 62,663
Salary enpenses
(15,900)

Net Profit 46,763