Chapter 4

Journalizing and Posting Transactions

 Learning Objectives

  1. LO1    Describe the flow of data from source documents through the trial balance.
  2. LO2    Describe and explain the purpose of source documents.
  3. LO3    Describe the chart of accounts as a means of classifying financial information.
  4. LO4    Journalize transactions.
  5. LO5    Post to the general ledger and prepare a trial balance.
  6. LO6    Explain how to find and correct errors.


  1. Flow of Data (See Figure 4-1)–WATCH THIS VIDEO
    1. Analyze transactions using source documents and chart of accounts.
    2. Enter journal transactions in the general journal in proper form.
    3. Post entries to the accounts in the general ledger.
    4. Prepare a trial balance.


  1. Source Documents (See Figure 4-2)–WATCH THIS VIDEO
    1. Are almost any document that provides information about a business transaction.
    2. Trigger the analysis of what has happened.
    3. Serve as objective evidence and to verify the accuracy of accounting records.
    4. FYI: Notice the chart of accounts on the inside back cover of the text.
    5. Use the chart of accounts order for listing expenses on the income statement. This is often easier than listing by amount when doing the homework.
    6. Emphasize that source documents provide objective, verifiable evidence of the transaction. These documents are important if anyone challenges the accuracy of the accounting records.


  1. The Chart of Accounts (See Figure 4-3)–WATCH THIS VIDEO
    1. Is a list of all accounts used by a business.
    2. Arranged according to the accounting equation.
    3. Asset accounts begin with “1.”
    4. Liability accounts begin with “2.”
    5. Owner’s equity accounts begin with “3.”
    6. Revenue accounts begin with “4.”
    7. Expense accounts begin with “5.”
  1. Share the following with me in a Google Doc:
    1. Complete Exercises E4-1A, E4-1B
    2. Study Guide Review Question (pages SG-36 to SG-37) #1 –  4
    3. End of Chapter Review Questions (page 115 in the big textbook) # 1 – 4