How to record journal entries in excel

1

Microsoft Excel is a worksheet application that can be used

to facilitate accounting tasks. You will find that even the most

basic elements of accounting can be completed more efficiently

in the Excel environment. In this chapter, you will examine two

fundamental accounting concepts: the accounting equation and

the transaction recording process. These accounting concepts will

provide the foundation for all subsequent topics. As you examine

these topics, you will be introduced to a number of basic Excel

features.

1 The Accounting Equation and Recording Journal Entries LEARNING OBJECTIVES

■■ Display the accounting equation

■■ Record journal entries

■■ Enter data and numbers in Excel

■■ Use Undo and Redo in Excel

■■ Print worksheets

EFA.indb 1 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

2 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

City Music World City Music World is a retail store located in Niskayuna, NY. The store sells musical equipment and offers lessons for beginning and experienced musicians. The company has used pen and paper to track accounting activity since its inception in 1979 and has now decided to work with Excel to increase its efficiency. You are spearheading this process.

In this chapter, you will examine how the accounting equation and journal entries can be expressed within Excel. You will then examine how this data can be managed within Excel and then conclude by reviewing printing methods.

Journal entries for City Music World (left) and their corresponding impact on the accounting equation (right) can be easily entered in Excel.

P R O J E C T

EFA.indb 2 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Entering Data to Display the Accounting Equation 3

The Accounting Equation The accounting equation is a simple formula that must remain in balance at all times. The equation is as follows:

Assets are items of value within the business. Types of assets include Cash, Accounts Receivable (monies owed to the business from a customer), Supplies, Inventory, Equipment, and Land. These resources are used to generate income for the business.

Liabilities are the portions of assets owed to entities outside the business. Examples include Accounts Payable (monies owed by the business to other companies), outstanding loans, mortgages, and monies received in advance of services rendered (such as a sports team receiving season ticket revenue before the actual games are played).

Owner’s Equity is the portion of the assets not owed to entities outside the organi- zation. This portion of the assets represents that to which the owner(s) can lay claim, hence the term owner’s equity.

Stated in different terms, the accounting equation dictates that all items of value (assets) equal the portion of the assets owed to others (liabilities) plus the portion of the assets not owed to others (owner’s equity). Remember that the accounting equation must always be in balance. If you find that total assets do not equal total liabilities plus total owner’s equity, you must identify and correct the error.

Entering Data to Display the Accounting Equation

Within Excel, data is entered into the active cell, which is surrounded by a thick border known as the highlight. Data may be entered as text (used for headings and entries containing alphabetic char- acters) or numbers (can be entered directly or can be calculated using formulas). Excel recognizes whether the data you enter is text, a number, or a formula.

EFA.indb 3 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

4 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

Data Types Entries are defined as one of two main classifications: constant values or formulas. Depending on the method used, the accounting equation can use entries from each classification. Constant values can be text, numeric, or a combination of both. Formula entries display the results of dynamic calculations.

Completing Cell Entries Text and numbers are entered by positioning the highlight in the desired cell, typing the text or number, and completing the entry. You can use [Enter], [Tab], or any of the arrow keys to complete an entry. The method you use determines where the active cell moves.

Entry Completion Method Where the Active Cell Will Appear

(Enter] It will move down to the next cell.

(Tab) It will move to the next cell to the right.

[¥][£][¡][¢] It will move to the next cell in the direction of the arrow key.

[Esc] The entry will be deleted and the current cell will remain active.

When [Tab] is used to populate multiple cells in a row and [Enter] is used to complete the entry, the highlight is returned to the beginning of the next row. This simplifies the process of entering multiple rows of data.

The Enter and Cancel buttons appear on the Formula Bar whenever you enter or edit an entry. The Enter button completes the entry and keeps the highlight in the current cell. Similar to the [Esc] key, the Cancel button discards changes made before completing the entry.

TIP! Simply clicking within a different cell after typing a cell entry also confirms the typed entry.

Deleting and Replacing Entries You can delete an entire entry after it has been completed by clicking in the cell and tapping [Delete]. Likewise, you can replace an entry by clicking in the cell and typing a new entry.

Number Formats When entering numbers, it isn’t necessary to type commas, dollar signs, and other number formats. Instead, you can use Excel’s formatting commands (located on the Home tab of the Ribbon) to add the desired number formats.

This entry is a constant value. This entry is a formula that results in the sum of 33,250 being displayed.

Cancel button

Enter button

EFA.indb 4 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Entering Data to Display the Accounting Equation 5

Decimals and Negative Numbers You should always type a decimal point if the number you are entering requires one. Likewise, you should precede a negative number entry with a minus (–) sign or enclose it in parentheses ( ).

Formatting Changes Other formatting changes can be made from the Font group on the Home tab, including bold, italics, and underline. In order to apply these changes to non-adjacent cells, the [Ctrl] key can be used while highlighting the desired cells with the mouse.

Home→Font→Bold | [Ctrl]+[B] Home→Font→Italic | [Ctrl]+[I] Home→Font→Underline | [Ctrl]+[U]

Develop Your Skills EA1-D1

In this exercise, you will create a workbook in Excel and enter the headers and amounts that comprise the accounting equation for City Music World.

Before You Begin: Be sure to visit the Learning Resource Center at labyrinthelab.com/lrc to retrieve the student files for this course before beginning this exercise.

1. Start Excel and open a Blank Workbook template file.

2. Save the file in your Chapter 01 folder as: EA1-D1-AcctEquation-[YourName]

Enter Headers for the Accounting Equation

3. Make cell A1 active by clicking the mouse pointer in it.

4. Type Assets and tap [Tab].

The text is entered in the cell and the highlight moves right to cell B1.

5. Type = and tap [Tab].

Because nothing was typed after the equals sign, it is displayed within cell B1.

6. Type Liabilities and tap [Tab], type + and tap [Tab], type Equity and tap [Enter].

The highlight returns to column A on the next row (cell A2).

7. Click cell A1, drag to the right, and release the mouse on cell E1.

You have now highlighted the range A1:E1, which includes cells A1, B1, C1, D1, and E1.

8. Choose Home→Font→Bold .

Bold formatting is applied to each cell within the highlighted range.

EFA.indb 5 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

6 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

9. Choose Home→Alignment→Center to center the headers.

Enter Figures Within the Accounting Equation

10. Follow these steps to enter data:

■

A BC

A. Select cell C2, type 2000, and tap [Enter].

B. Select cell E2, type 31250, and tap [Enter].

C. Select cell A2, type 33250, and tap [Esc].

The entry in cell A2 is deleted, while the highlight remains within the cell. You have deleted this entry so that you may type a formula within this cell instead.

11. Type =2000+31250 and tap [Enter].

The result of the formula is now displayed in cell A2.

12. Select cell B2, type = and tap [Enter], select cell D2, and then type + and tap [Enter].

13. Select cell B2, hold [Ctrl], and select cell D2.

Cells B2 and D2 are now highlighted. The [Ctrl] key can be used in this manner to highlight non-adjacent cells.

14. Choose Home→Alignment→Center .

Format Figures Within the Accounting Equation

15. Select cell A2, hold [Ctrl], and then select cells C2 and E2.

Now that you have selected the three figures within the accounting equation, you will format them as currency.

16. Choose Home→Number→Accounting .

Notice that the dollar sign has been placed in front of each figure, two decimal places have been added, and the width of the columns has increased to accommodate the increased length of the entries. As every figure is a whole dollar amount, you will now reduce the number of visible decimal places.

17. Choose Home→Number→Decrease Decimal twice to remove the two decimal places for each figure.

The headers and the figures of the accounting equation are now appropriately displayed.

18. Save and close the file.

EFA.indb 6 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Entering Data to Display the Accounting Equation 7

Recording Journal Entries A transaction represents a single event that has occurred within a business. When these events take place, they must be recorded in a manner that can be understood by an outsider. We use journal entries to accomplish this goal. A journal entry is a visual display of a transaction in which debits are listed on top and credits are listed on the bottom and indented.

Impact of Debits and Credits on Account Types

Account Type Debit Credit

Asset Increase Decrease

Liability Decrease Increase

Capital Decrease Increase

Withdrawal Increase Decrease

Revenue Decrease Increase

Expense Increase Decrease

You can determine whether the balance within an account is increasing or decreasing based on whether it is being debited or credited within a journal entry. The format for a journal entry is as follows.

Supplies (asset) is being debited (displayed at the top of the journal entry) and Accounts Payable (liability) is being credited (displayed on the bottom of the journal entry, indented). This journal entry indicates that the balance within each of these accounts is increasing, as a debit increases an asset account and a credit increases a liability account.

Although it is good form to include an explanation beneath each journal entry (the final, italicized row in the journal entry above), for the sake of efficiency you will exclude these explanations throughout this chapter. Also keep in mind that a journal entry can have multiple debits (each of which would be listed on a single row at the top of the journal entry) and multiple credits (each of which would be listed on a single row at the bottom of the journal entry and indented once), but the total debits must always equal the total credits.

EFA.indb 7 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

8 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

Using Cut, Copy, and Paste to Record Journal Entries

With Cut, Copy, and Paste, you can move or copy cells. As certain accounts are used frequently within journal entries, using Copy and Paste can increase efficiency. The Copy command can copy a range from one worksheet, and the Paste command will paste the range within or between worksheets.

WARNING! When copying and pasting to a cell that already contains an entry, the existing entry is deleted and replaced with the copied entry.

When an item is either copied or cut, it is placed on the Office Clipboard. It can then be pasted from the Clipboard, which can be opened via the dialog box launcher on the Clipboard group of the Home tab.

The Office Clipboard with several items available to paste

Home→Clipboard→Copy | [Ctrl]+[C] Home→Clipboard→Cut | [Ctrl]+[X] Home→Clipboard→Paste | [Ctrl]+[V]

EFA.indb 8 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Using Cut, Copy, and Paste to Record Journal Entries 9

Paste Options The Paste Options button displays at the lower-right corner of the destination cell(s) after a paste action. Its drop-down list provides options that let you modify the effect of the Paste command.

The button disappears upon the next action you take. The Paste Options menu can also be accessed from the Home tab within the Clipboard section.

EFA.indb 9 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

10 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

Moving and Copying Cells Drag and drop, in which you drag a cell’s contents to a new location, produces the same result as Cut and Paste. However, drag and drop is preferable if the original location and new destination are both visible in the current window. The mouse pointer changes to a four- pointed arrow as you point at the highlight around the selected cell or range.

Right-dragging is a variation of drag and drop. With the right-drag method, you use the right mouse button to drag the selected cell or range. When the button is released, you choose to move, copy, or link. This approach provides more control because there is no need to use the [Ctrl] key when copying and you have the option of canceling the action.

Pop-up menu that appears when using the right-drag method

Long Text Entries Text entries that do not fit in a cell are known as long entries. Excel will display a long entry over the adjacent cell, if it is empty, or shorten (truncate) the display of the long entry if the cell to the right is in use. In the latter instance, the entire long entry remains within the cell but is not fully visible. You can widen a column to accommodate a long entry.

This long entry is entered in cell A1, although it displays over the range A1:C1.

EFA.indb 10 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Using Cut, Copy, and Paste to Record Journal Entries 11

Modifying Column Width and Row Height Modifying column width and/or row height can improve the appearance of a worksheet. You should strive to make data fully visible, while ensuring that no unnecessary space is displayed within the rows or columns. There are a variety of methods for changing column widths and row heights. One efficient way is with AutoFit, which adjusts column width to fit the widest entry in a column and row height to the tallest entry in a row. Note that you can adjust column widths and row heights on one or multiple columns or rows.

NOTE! The default column width is 8.43 characters and the default row height is 15 points.

Develop Your Skills EA1-D2

In this exercise, you will use Cut, Copy, and Paste to record two journal entries for City Music World.

1. Open a Blank Workbook template and save the file in your Chapter 01 folder as: EA1-D2-JournalEntries-[YourName]

2. Make cell A1 active by clicking the mouse pointer in it.

3. Type 4/1/16 and tap [Tab].

By default, the date is entered in the Short Date format of 4/1/2016.

4. Use the right arrow to move to cell C1, type Cash, and tap [Enter].

Although you intended to enter all debited accounts in column B, you accidentally entered the Cash account in cell C1. You will now cut this entry from cell C1 and paste it on cell B1.

5. Select cell C1 and choose Home→Clipboard→Cut.

Notice the marquee (moving lines) surrounding cell C1. This indicates that the Cut command has been applied to the cell.

6. Select cell B1 and choose Home→Clipboard→Paste.

7. Use the right arrow to move to cell D1 and then type 30,000 and tap [Enter].

You have now entered the date, debited account, and debited amount in row 1.

8. Select cell C2, type Harold Cameron, Capital, and tap [Enter].

This long text entry extends beyond the right border of the cell.

9. Select cell D1, hold down [Ctrl], and tap [C].

Notice the marquee around cell D1 indicating that the Copy command has been applied.

10. Select cell E2, hold down [Ctrl], and tap [V].

This keyboard shortcut has pasted the contents of cell D1 to cell E2.

11. Tap [Enter].

By tapping [Enter] you have confirmed the entry in cell E2 and terminated the Copy command. Notice that the marquee is no longer around cell D1.

12. Select cell B3, type Investment by Owner, and tap [Enter].

EFA.indb 11 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

12 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

13. Right-click the column B header and choose Column Width, type 3, and click OK.

14. Set the column width of column C to 27.

15. Highlight the columns D–E headers, right-click and choose Column Width, type 11, and click OK.

By highlighting two column headers before applying the new column width, you have changed the width of both columns simultaneously.

16. Select cell B3 and choose Home→Font→Italic.

Italicizing the journal entry explanation ensures that it will stand out and not be confused with the account names listed above.

Create a Journal Entry for the Purchase of Supplies on Account

17. Enter the data for the journal entry as indicated:

Cell A4 4/3/2016

Cell B4 Supplies

Cell D4 2,000

Cell B5 Accounts Payable

Cell D5 2,000

Because these items are being credited in the second journal entry, they should be indented. Now you will change their location.

18. Select cell B5 and then click the border around that cell and drag and drop the contents to cell C5.

EFA.indb 12 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Using Undo and Redo 13

19. Follow these steps to use the right mouse button with drag and drop:

A. Select cell D5 and then right-click the border around that cell (do not release the mouse button).

B. Drag the contents to cell E5 and release the mouse button.

C. Choose Move Here from the menu.

20. Select cell B6 and type: Purchase of Supplies

21. Select cell B3 and choose Home→Clipboard→Copy.

22. Select cell B6, choose Home→Clipboard→Paste €→Formatting, and then tap [Esc].

This Paste option applied the formatting from cell B3 to cell B6 without changing the contents of the cell. Pressing [Esc] cancelled the Copy command.

23. Save your file.

Unless otherwise directed, always keep your file open at the end of each exercise.

Using Undo and Redo The Undo command reverses actions taken within a worksheet. Most actions can be undone, but those that cannot include printing and saving workbooks.

The Redo command reverses an Undo command. The Redo button is visible on the Quick Access toolbar only after you have undone an action.

[Ctrl]+[Z] to undo

[Ctrl]+[Y] to redo

A C

B

EFA.indb 13 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

14 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

Undoing Multiple Actions Clicking the arrow on the Undo button displays a list of actions that can be undone. You can undo multiple actions by dragging the mouse over the desired actions. You must undo actions in the order they appear on the list.

When you click the arrow on the Undo button, you will see a list of previous actions with the most recent at the top.

Limitations to Undoing

There are times when Undo will not work, such as when you select any command from the File tab. When an action cannot be undone, Excel will change the Undo ScreenTip to Can’t Undo. (ScreenTips appear when the mouse pointer hovers over a worksheet element for a short period of time.)

Develop Your Skills EA1-D3

In this exercise, you will use Undo and Redo while recording two journal entries for City Music World.

1. Save your file as: EA1-D3-JournalEntries-[YourName]

2. Follow these steps to begin recording the journal entries:

A. Select cell A7, type 4/8/2016, and tap [Tab].

B. Type Utilities Expense in cell B7 and tap [Tab] twice.

C. Type 250 in cell D7 and tap [Enter].

You confirmed the 250 entry in cell D7 by tapping [Enter] after using [Tab] for the preceding entries. The active cell is now in column A on the subsequent row.

A B C

EFA.indb 14 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Using Undo and Redo 15

3. Select cell C8, type Accounts Payable, and tap [Enter].

You have incorrectly entered Accounts Payable as the credited account. Because the utility bill was paid, the Cash account should be credited. You will now correct this error.

4. Click Undo on the Quick Access toolbar.

Accounts Payable has now been removed and the highlight has returned to cell C8.

5. Type Cash, tap [Tab] twice, type 250, and tap [Enter].

6. Select cell B9 and choose Home→Font→Italic.

Although you have not yet written the explanation for the third journal entry, you can still apply italics to this cell. When you ultimately type the explanation, it will be italicized.

7. Type Payment of Utilities Expense, tap [Enter], and then tap the left arrow key.

8. Type 4/9/2016 and tap [Tab], type Accounts Receivable and tap [Tab] twice, and finally type 1,500 and tap [Enter].

9. Select cell C11, type Service Revenue and tap [Tab] twice, and then type 1,500 and tap [Enter].

10. Select cell B12, type Services Provided on Account, and tap [Enter].

After typing this entry you decide that your explanation is inaccurate; therefore, you will now undo your previous action.

11. Choose Undo from the Quick Access toolbar.

The explanation in cell B12 has been removed. Upon further consideration you decide that the explanation was sufficient, so you will now return it to cell B12.

12. Choose Redo from the Quick Access toolbar.

The explanation has now been returned to its original location.

13. Choose Home→Font→Italic.

14. Highlight the range D1:E11 and choose Home→Number→Accounting.

15. Click Decrease Decimal twice.

16. Save your file.

EFA.indb 15 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

16 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

Printing Worksheets Excel gives you options for printing your work. Among these are the Quick Print button, Print Selection, and Print Area. These options provide flexibility so that printing can be adapted to accommodate all workbooks.

NOTE! The light gridlines displayed around cells in Normal and Page Layout views do not print.

Print Preview Print Preview shows how a worksheet will look when printed. It’s wise to preview a large or complex worksheet before sending it to the printer. The Print tab of Backstage view (available via the File tab) displays a preview along with print options. You cannot edit worksheets in Backstage view.

1. Print tab

2. Print preview

3. Page Navigation indicating the total number of pages that will print

4. Button that sends the document to the printer using the print options in effect

5. Print settings

4

1

2

35

EFA.indb 16 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Printing Worksheets 17

Print the Full Worksheet You can customize the Quick Access toolbar to include the Quick Print button, which sends the entire worksheet to the current printer using the print options in effect.

TIP! In general, customizing the Quick Access toolbar to display your most commonly used buttons can greatly increase your efficiency.

Although the Quick Print button is useful for standard printing, you must use the Print tab in Backstage view if you want to change printers, adjust the number of copies to be printed, print only certain pages, or set other printing options such as printing only selected cells.

File→Print | (Ctrl)+(P)

Print Selections You may want to print only a single range of cells or multiple nonadjacent ranges within a work- sheet. Note that if you highlight nonadjacent selections, they will print on separate pages.

Print Area

An alternative to using the Print Selection option is to set the print area, which is done via the Page Setup group on the Page Layout tab. There are two primary benefits of using this method instead of Print Selection:

• The portion of the worksheet designated as the print area does not change when the worksheet is altered. This differs from Print Selection, which prints only the highlighted area within the worksheet.

• When printing a designated print area, no additional options must be selected from Backstage view, whereas Print Selection requires you to select a Settings option from Backstage view prior to printing.

Page Layout→Page Setup→Print Area→Set Print Area

EFA.indb 17 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

18 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

Orientation When printing a worksheet, you can use portrait or landscape orientation. Depending on whether the worksheet primarily extends vertically or horizontally, you will find that each of these options will be useful.

Worksheet orientation can be changed from the Ribbon (left) or the Print tab of Backstage view (right).

Page Layout→Page Setup→Orientation→Portrait or Landscape or File→Print→ Settings→Portrait Orientation or Landscape Orientation

Develop Your Skills EA1-D4

In this exercise, you will print four journal entries for City Music World.

1. Save your file as: EA1-D4-JournalEntries-[YourName]

2. Highlight the range A1:E6 and choose File→Print.

EFA.indb 18 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Printing Worksheets 19

3. In the Settings section, click Print Active Sheets and choose Print Selection from the menu that appears.

The preview displays the first two journal entries, which is your selected area.

4. If directed, choose Print; otherwise, click the back arrow at the top-left corner of Backstage view.

You are returned to your worksheet.

5. Highlight the range A1:E9, choose Page Layout→Page Setup→Print Area→ Set Print Area, and then choose File→Print.

The preview displays the first three journal entries, as these are the ones in your print area.

6. In the Settings section, click Portrait Orientation and choose Landscape Orientation from the menu.

The page within the preview has now turned such that the longer sides of the page are on the top/bottom.

7. If directed, choose Print; otherwise, click the back arrow at the top-left corner of Backstage view.

8. Save and close your file.

EFA.indb 19 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

20 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

What Are the Benefits of Using Excel to Record Journal Entries?

As you have learned, Excel can increase your efficiency when recording journal entries. Years ago, all journal entries were handwritten on large (typically either green or yellow) journal paper. It is not difficult to see how using Excel for this purpose is not only a quicker method, but also one that is far less prone to errors.

Today, many businesses use computerized accounting systems that automatically generate journal entries. While some companies praise the simplicity of these

systems, others have difficulty using the software and, therefore, generate inaccu- rate results.

Small-business owners can maintain a close watch on a company’s performance by using Excel to complete the journal entry recording process. While this method increases the business owner’s speed (in comparison to using journal paper), it also minimizes the possibility of user error (in comparison to an untrained employee working with computerized software). The business owner is, therefore, given more time to devote to improving the business and possesses accurate records that will enable this improvement.

EFA.indb 20 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Self-Assessment 21Self-Assessment 21

Self-Assessment Check your knowledge of this chapter’s key concepts and skills using the Self-Assessment here or in your eLab course.

1. Using [Tab] to complete a cell entry moves the active cell one column to the right. True False

2. When you use the Enter button on the Formula Bar to complete a cell entry, the highlight moves one row down. True False

3. A negative number can be indicated through the use of a minus sign or parentheses. True False

4. The Paste option can be executed from the Ribbon or via a keyboard shortcut. True False

5. When using drag and drop, a menu of options appears. True False

6. If the cell to the right of a long text entry is in use, the long text entry will cover the contents of this adjacent cell. True False

7. The Undo button can be used to reverse every action in Excel. True False

8. Print Preview can be accessed via the Home tab. True False

9. The Quick Access toolbar can be customized to include options such as Quick Print. True False

10. The two orientation options are portrait and landscape. True False

11. Which key CANNOT be used to complete an entry and move to a new cell? A. [Enter] B. [Tab] C. [¡] D. [Esc]

12. Which action CANNOT be taken from the Home tab? A. Bold B. Right-dragging C. Italic D. Underline

13. How can you open the Office Clipboard? A. Copy a cell or range. B. Paste a cell or range. C. Click the dialog box launcher in the Clipboard group. D. Click the dialog box launcher in the Font group.

14. Which of these CANNOT be used to move the contents of one cell to another location? A. Undo and Redo B. Cut and Paste C. Drag and drop D. Right-dragging

EFA.indb 21 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

22 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

15. Long text entries: A. cannot be made to fit within a single column. B. initially extend beyond the right border of the cell in which they are entered. C. will always cover the contents of the cell to the right. D. must be shortened before completing the entry.

16. Which of these actions CANNOT be reversed with Undo? A. Italic B. Paste C. Save D. Bold

17. The Redo button becomes visible only after doing what? A. Pasting cell contents B. Using Undo C. Copying cell contents D. Typing a number within a cell

18. The Quick Print button can be added to: A. the Quick Access toolbar. B. the Home tab. C. Backstage view. D. an individual cell within the worksheet.

19. Which of these will NOT result in only a portion of a worksheet being printed? A. Setting the print area from the Ribbon B. Choosing Print Selection in Backstage view C. Selecting only certain pages to print in Backstage view D. Changing the orientation from the Ribbon

20. Which of these is NOT displayed in Backstage view? A. Print Preview B. The Ribbon C. The Print button D. Print Settings

EFA.indb 22 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Reinforce Your Skills 23

Reinforce Your Skills

EA1-R1 Display the Accounting Equation

In this exercise, you will enter the beginning and ending accounting equations in Excel. The beginning assets equal $62,000 and the beginning liabilities equal $19,000. During the year, liabilities increased by $13,000 and equity increased by $4,000.

1. Create a Blank Workbook and save the file in your Chapter 01 folder as: EA1-R1-AcctEquation-[YourName]

You will begin by formatting the cells into which you’ll enter the accounting equation.

2. Highlight the range A1:E1, choose Home→Font→Bold, and then click Center .

3. Using [Tab] to navigate and [Enter] to complete the final entry, type the beginning accounting equation into the range A1:E1.

The accounting equation headers appear in row 1 with the bold formatting and center alignment you applied in the previous step.

4. In cell A2, type the beginning asset dollar amount and tap [Tab].

Hint: Here and throughout, refer to the exercise instructions for the dollar amounts to enter within the accounting equations.

5. Type = and tap [Tab], type the beginning liability dollar amount and tap [Tab], type + and tap [Tab], and then type the beginning equity dollar amount and tap [Tab].

As this is the beginning accounting equation, the spreadsheet should indicate this fact. To accomplish this, you will now enter a description in cell F2.

6. In cell F2, type Beginning Accounting Equation and tap [Enter].

7. Select cell A2, hold [Ctrl], select cells C2 and E2, and release [Ctrl].

You have highlighted the three dollar amounts in the beginning accounting equation. You will now apply a number format to these dollar amounts simultaneously.

8. Choose Home→Number→Accounting then click Decrease Decimal twice.

9. In cell A3, enter the ending asset dollar amount and tap [Tab].

10. Type = and tap [Tab], type the ending liability dollar amount and tap [Tab], type + and tap [Tab], and then type the ending equity dollar amount and tap [Tab].

11. In cell F3, type Ending Accounting Equation and tap [Enter].

12. Select cell F3, choose Home→Cells→Format→Column Width, type 30, and click OK.

13. Select cell A3, hold [Ctrl], select cells C3 and E3, and release [Ctrl].

14. Choose Home→Number→Accounting and then click Decrease Decimal twice.

15. Highlight the range B2:B3, hold [Ctrl], highlight the range D2:D3, release [Ctrl], and choose Home→Alignment→Center.

16. Highlight the range A1:F3 and choose File→Print.

EFA.indb 23 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

24 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

17. In the Settings section, click Print Active Sheets and choose Print Selection.

18. Open the Portrait Orientation menu and choose Landscape Orientation.

19. If directed, choose Print; otherwise, click the back arrow at the top left of Backstage view.

20. Save and close your file.

EA1-R2 Record Journal Entries

In this exercise, you will record journal entries in Excel. The four transactions you use, all of which took place during 2016, are as follows:

• August 2: Purchased twelve months of insurance coverage in advance for $3,600

• August 9: Billed clients $6,000 for services rendered

• August 21: Received $4,200 from clients for previously billed services

• August 31: Recorded an adjusting journal entry for the portion of insurance coverage from the August 2 purchase that has now expired

1. Create a Blank Workbook template and save the file in your Chapter 01 folder as: EA1-R2-JournalEntries-[YourName]

2. In cell A1, type 8/2/2016 and then enter the debited account for the first journal entry in cell B1 and its amount in cell D1. Tap [Enter] to complete your final cell entry.

3. In cell C2, type the credited account for the first journal entry and tap [Enter].

4. Select cell D1 and choose Home→Clipboard→Copy.

5. Select cell E2 and press [Ctrl]+[V].

The debited amount is pasted into cell E2 as the credited amount in the first journal entry.

6. Type Purchased Insurance Coverage in Advance in cell B3 and click Enter on the Formula Bar.

Clicking the Enter checkmark on the Formula Bar confirms the entry within cell B3 while keeping that cell active.

7. Choose Home→Font→Italic.

8. In cell A4, type 8/9/2016 and then enter the debited account for the second journal entry in cell B4 and its amount in cell D4. Tap [Enter] to complete your final cell entry.

9. In cell C5, type the credited account and tap [Tab] two times, type the credited amount in cell E5, and tap [Enter].

10. In cell B6, type Billed Clients for Services and tap [Enter].

11. Tap the up arrow and then press [Ctrl]+[I] to apply italic formatting.

12. In cell A7, type 8/21/2016 and then enter the debited account for the third journal entry in cell B7 and its amount in cell D7. Tap [Enter] to complete your final cell entry.

13. In cell C8, type the credited account and tap [Tab] twice, type the credited amount in cell E8, and tap [Enter].

14. In cell B9, type Received Payment on Account and tap [Enter].

15. Select cell B9 and choose Home→Font→Italic.

EFA.indb 24 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

Reinforce Your Skills 25

16. In cell A10, type 8/31/2016 and then enter the debited account for the fourth journal entry in cell B10 and its amount in cell D10. Tap [Enter] to complete your final cell entry.

17. In cell C11, type the credited account and tap [Tab] twice, type the credited amount in cell E11, and tap [Enter].

18. In cell B12, type Adjusting Entry for Expired Insurance and tap [Enter].

19. Select cell B9, choose Home→Clipboard→Copy, select cell B12, and choose Home→Clipboard→Paste €→Formatting.

20. Highlight the range D1:E11, choose Home→Number→Number Format→ Accounting, and then click Decrease Decimal twice.

21. Click the columns A–E headers and then double-click between the columns A–B headers.

Double-clicking widened the columns to fit the text within them.

22. Click cell A1, right-click the column B header, choose Column Width, and then type 5 and click OK.

23. Highlight the range A1:E12, choose Page Layout→Page Setup→Print Area→ Set Print Area, and choose File→Print.

24. If directed, choose Print; otherwise, click the back arrow at the top-left of Backstage view.

25. Save and close your file.

EFA.indb 25 7/13/18 5:50 PM

© Labyrinth Learning. All rights reserved. http://www.lablearning.com

26 Excel for Accounting Chapter 1: The Accounting Equation and Recording Journal Entries

Apply Your Skills

EA1-A1 Display the Accounting Equation

In this exercise, you will enter the beginning and ending accounting equations in Excel. The beginning assets equal $97,000 and the beginning liabilities equal $59,000. During the year, liabilities increased by $9,000 and equity decreased by $11,000.

1. Create a Blank Workbook and save the file in your Chapter 01 folder as: EA1-A1-AcctEquation-[YourName]

2. In the range A1:E1 type appropriate headers for the accounting equation. Ensure that you enter the equals sign and plus sign in the proper locations.

3. Apply bold formatting to and center all entries in row 1.

4. In row 2, enter the beginning accounting equation amounts and any necessary mathematical symbols in the appropriate locations.

5. In cell F2, enter an appropriate description of the figures displayed in row 2.

6. In row 3, enter the ending accounting equation amounts and any necessary mathematical symbols in the appropriate locations.

7. In cell F3, enter an appropriate description of the figures displayed within row 3.

8. In rows 2–3, format all dollar amounts in the accounting number format with zero decimal places; center all mathematical symbols.

9. Change the worksheet orientation to be landscape.

10. Review the print preview and then save and close the file.

EA1-A2 Record Journal Entries

In this exercise, you will record four journal entries in Excel. The four transactions you will use, all of which took place during 2016, are as follows:

• February 4: Purchased $1,100 of supplies on account

• February 12: Received $2,600 of Service Revenue

• February 17: Paid $3,100 for Rent Expense

• February 27: Recorded an adjusting journal entry for Supplies Expense after determining that the value of remaining supplies is $350 (the company had no supplies prior to February)

1. Create a Blank Workbook and save the file in your Chapter 01 folder as: EA1-A2-JournalEntries-[YourName]

2. In row 1, for the first transaction enter the date (including the year) in column A, the debited account in column B, and the debited amount in column D.

3. Ensure that the format for the date in cell A1 is Short Date.

4. In row 2, for the first transaction enter the credited account in column C and its amount in column E.

EFA.indb 26 7/13/18 5:50 PM