Material Detail

This presentation is particularly troublesome for anyone who teaches principles of accounting. Transactions are first recorded in a journal and then posted to the ledger. This presentation skips the recording in the journal step in the accounting cycle and posts directly to the ledger represented by t-accounts. In addition, several transactions are processed incorrectly. All income statement accounts are ignored with no explanation.   All transactions that involve revenue and expense accounts are directly debited or credited to the owner's capital account. In addition the Supplies account is really an Art Supplies Merchandise Inventory account.  Generally, the supplies account implies office supplies. Given this exercise sell merchandise, a discussion as to which inventory system is being used is relevant to how the transaction is handled. As a result the presentaion can be quite misleading.  However, the use of the Excel spreadsheet to illustrate the posting process and how the information flows to the trial balance and balance sheet is very nice.  It could be used as a model for others to emulate, but with accurate information included instead.