Week 3 Accounting Workshop: Journal, Ledger, and Trial Balance for the Shop's First Month

Part 1 — The Big Picture

This week you learned the accountant's way of writing events down: one account for each item, debits on the left and credits on the right, a journal entry for every transaction with equal debits and credits, posting to the ledger, and a trial balance that checks the two sides agree. In this workshop you keep the full set of books for the illustrative bicycle shop's first month in a free spreadsheet. You journalize its 12 transactions, post them, find every balance, and prepare the unadjusted trial balance. Then you test the check itself by breaking the books on purpose in three ways and watching what the trial balance can and cannot see. Last, you ask a chatbot to keep the same books and you audit its work by hand. Every later Accounting Workshop builds on the journal, ledger, and trial balance you set up here.

Time budget: Plan for about 90 minutes.

Part 2 — The Task

Guiding question: When the bicycle shop's 12 Month 1 transactions are journalized, posted, and listed on a trial balance, what do the matching column totals prove, and which errors could still be hiding inside them?

Workshop data: Dataset A, the bicycle shop's Month 1 (illustrative)

Source: Dataset A is the course's running case: an illustrative, unnamed bicycle repair and sales shop, organized as a corporation by two founders, and its 12 transactions in Month 1, constructed for this course. It describes no real business.

• Rows: 12 transactions, one per row, on Days 1 to 30 of Month 1; the journal scaffold has 12 rows, one per transaction
• Accounts: 12 accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accounts Payable, Unearned Revenue, Common Stock, Dividends, Service Revenue, Rent Expense, Wages Expense
• The transactions: Transaction 1 (Day 1): The founders invest $30,000 cash for 30,000 shares of common stock; Transaction 2 (Day 2): Pays $12,000 cash for repair equipment; Transaction 3 (Day 3): Buys $900 of shop supplies on account; Transaction 4 (Day 4): Pays $2,400 for a 12-month insurance policy; Transaction 5 (Day 6): A cycling club pays $1,200 in advance for tune-ups not yet performed; Transaction 6 (Day 15): Repairs for walk-in customers, $3,500 cash collected; Transaction 7 (Day 18): $1,800 of repairs for a delivery company on account; Transaction 8 (Day 20): Pays $1,500 rent for the month; Transaction 9 (Day 22): Pays $600 of the $900 owed for supplies; Transaction 10 (Day 25): Collects $1,000 from the delivery company; Transaction 11 (Day 28): Pays $1,600 wages to the part-time mechanic; Transaction 12 (Day 30): Pays a $500 cash dividend to the shareholders.

Part 3 — Materials & Procedure

Tools and materials

• A free spreadsheet (Google Sheets, or any free spreadsheet) for journals, T-accounts, trial balances, schedules, and statements, with every total computed by formula; the SEC's free EDGAR search for public companies' annual reports; and one approved chatbot used as a sparring partner whose entries, totals, and claims about standards and tax rates the student checks by hand and against the pinned source before trusting them
• Google Sheets, or any free spreadsheet
• One approved chatbot

Ways of working

• record-and-post
• adjust-and-report
• analyze-and-explain

Procedure

1. Open a new spreadsheet and name the first sheet Journal. Make five columns: Transaction, Day, Account, Debit, and Credit. For each of the 12 transactions in Part 2, enter one row for the debited account and one row for the credited account, debit first. Tool: Google Sheets, or any free spreadsheet. Check: 24 rows, two per transaction, with every amount in either the Debit column or the Credit column, never both.
2. Under the last row, total each amount column with =SUM(D2:D25) and =SUM(E2:E25), and beside each transaction's credit row check that its debit and credit match. Tool: Google Sheets, or any free spreadsheet. Check: The two column totals are equal, and every transaction's two amounts match.
3. Make a second sheet named Ledger with one row for each of the 12 accounts. For each account, add its debits with a formula such as =SUMIF(Journal!C2:C25,"Cash",Journal!D2:D25), add its credits the same way, and subtract the smaller side from the larger to find its balance and its side. Tool: Google Sheets, or any free spreadsheet. Check: Cash shows 35,700 on the left, 18,600 on the right, and a 17,100 debit balance, and every balance sits on its account's normal side.
4. Make a third sheet named Trial Balance. List the 12 accounts in chart-of-accounts order, put each balance in a Debit or Credit column, and total both columns with =SUM formulas. Fill in the trial balance table in Part 4 from it. Tool: Google Sheets, or any free spreadsheet. Check: Both columns show the same total.
5. Copy the whole spreadsheet three times. In the first copy delete transaction 9's two rows; in the second copy add transaction 8 a second time; in the third copy change the account on transaction 11's debit row from Wages Expense to Rent Expense. Record each copy's totals and wrong balances in the error-test table in Part 4. Tool: Google Sheets, or any free spreadsheet. Check: In all three copies the two trial balance columns still agree, even though some balances are wrong.
6. Open one approved chatbot in a new conversation, paste the 12 transactions from Part 2, then paste the prompt in Part 6. Compare every entry, balance, and total it gives you with your own spreadsheet, and mark each slip against the checks in Part 6. If you prefer not to use a chatbot, take the equivalent route below instead. Tool: One approved chatbot. Check: A marked-up copy of the chatbot's reply with every slip quoted and corrected by hand.

Fallback route

When to use it: Use this route if you cannot open a spreadsheet, or cannot save or print one.

Copy the four tables in Part 4 by hand onto paper or into any text file, work every sum and subtraction by hand with the arithmetic written out, run the three error tests by recomputing the affected balances and totals, and complete every analysis question and the critique step in the same order. Submit a photo or scan of the paper, or the text file, for equal credit.

This route earns the same credit as the primary route.

Part 4 — The Scaffold

Record each transaction as a journal entry so every amount has a side and an account before anything is posted.

Student scaffold table 1

Transaction (Day)	Event	Account debited	Account credited	Amount	Debits equal credits?
1 (Day 1)	The founders invest $30,000 cash for 30,000 shares of common stock
2 (Day 2)	Pays $12,000 cash for repair equipment
3 (Day 3)	Buys $900 of shop supplies on account
4 (Day 4)	Pays $2,400 for a 12-month insurance policy
5 (Day 6)	A cycling club pays $1,200 in advance for tune-ups not yet performed
6 (Day 15)	Repairs for walk-in customers, $3,500 cash collected
7 (Day 18)	$1,800 of repairs for a delivery company on account
8 (Day 20)	Pays $1,500 rent for the month
9 (Day 22)	Pays $600 of the $900 owed for supplies
10 (Day 25)	Collects $1,000 from the delivery company
11 (Day 28)	Pays $1,600 wages to the part-time mechanic
12 (Day 30)	Pays a $500 cash dividend to the shareholders

Post the journal to the ledger and find each balance as the difference between the two sides.

Student scaffold table 2

Account	Left side total (debits)	Right side total (credits)	Balance	Side of the balance
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accounts Payable
Unearned Revenue
Common Stock
Dividends
Service Revenue
Rent Expense
Wages Expense

List every balance in its column and foot both columns to see whether the ledger is in balance.

Student scaffold table 3

Account	Debit	Credit
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accounts Payable
Unearned Revenue
Common Stock
Dividends
Service Revenue
Rent Expense
Wages Expense
Totals

Break the books on purpose to see which errors the trial balance can and cannot catch.

Student scaffold table 4

Version of the books	Debit column total	Credit column total	Still in balance?	Balances that are now wrong
As recorded
Transaction 9 omitted
Transaction 8 recorded twice
Transaction 11 posted to Rent Expense

Part 5 — Analysis Questions

1. What is the shop's Cash balance, and what are the two column totals of its unadjusted trial balance? Show the additions and the subtraction that produce them.
2. In your error-test table, which of the three broken versions changed the trial balance totals, which left them unchanged, and which balances became wrong in each?
3. Recording transaction 8 twice raises Rent Expense, yet the debit column total does not change. Explain why, using the side each of the two accounts sits on.
4. A lender outside the business is deciding whether to lend to the shop. In one plain sentence, say what the shop's balanced trial balance lets the lender trust and what it does not.
5. Name one thing this unadjusted trial balance cannot tell you about the shop's month, even if every entry is right, and say what kind of later step would be needed to show it.
6. Reflect on your own first instinct. Choose one option: (a) which transaction's debit and credit did your first instinct get wrong, and what rule settled it? or (b) which slip in the chatbot's reply, or in the printed flawed analysis, would you most likely have missed without your own spreadsheet, and why?

Part 6 — AI-Critique Moment

Choose one equal-credit critique route. Route A: ask an approved AI tool to critique your completed work, then check its response against your own evidence. Route B is the no-AI equivalent printed below.

Approved tools: Claude, Gemini, ChatGPT, Grok, Microsoft Copilot.

Prompt to paste:

I've pasted my bicycle shop's 12 Month 1 transactions from this workshop above. They are an illustrative business, not a real one. Journalize each transaction with the debit first and the credit second, post the entries to T-accounts, and prepare the unadjusted trial balance with both column totals. Then tell me which accounting standard requires a trial balance, what payroll taxes apply to the wages in transaction 11, how the equipment should be valued now, and how much the shop earned this month.

Test the response for these likely failures:

• Chatbots often reverse a collection, writing transaction 10 as debit Accounts Receivable $1,000 and credit Cash $1,000, as if the shop paid the customer.
• Chatbots sometimes copy the $900 owed into the payment, writing transaction 9 as debit Accounts Payable $600 and credit Cash $900.
• Chatbots often credit Service Revenue $1,200 for the cycling club's advance in transaction 5, because cash arrived.
• Chatbots often debit Insurance Expense $2,400 for the 12-month policy in transaction 4, putting a year of cost into Month 1.
• Chatbots often state a trial balance total that does not foot, such as $36,300, or drop an account from one column.
• Chatbots sometimes cite a rule that does not exist, such as a "FASB Rule 101" that requires a monthly trial balance or says a balanced trial balance proves the books.
• Chatbots often bolt payroll withholding onto the wages in transaction 11 and quote an older Social Security wage base from their training data.
• Chatbots sometimes add that the shop could use LIFO for inventory under either U.S. GAAP or IFRS.
• Chatbots sometimes say the shop earned $17,100 because that is its cash balance.
• Chatbots sometimes restate Equipment at what it would sell for today, or reduce it for wear.
• Chatbots often record the dividend as "Dividend Expense" or list Dividends in the credit column with equity.

Write 3-5 sentences naming what the chatbot got right and at least two places where it slipped into one of the failures above, quoting its words and correcting each by hand against your own spreadsheet, Chapter 3, and Dataset A.

Equivalent route (no AI required)

No AI account is required for this workshop. This route assesses the same objectives, Objective 2 (analyze business transactions with the accounting equation and record them in a journal using double-entry bookkeeping, post them to the ledger, and prepare a trial balance) and Objective 1 (explain the purpose of financial accounting, its users, the forms of business organization, the roles of GAAP, the FASB, the SEC, and IFRS, and the ethical principles that guide accountants), takes comparable effort of about the same 90 minutes, uses the same rubric, and earns the same credit. Instead of the chatbot, critique this flawed analysis of the shop's Month 1, printed here in full: "Here is the shop's Month 1. Transaction 5: debit Cash $1,200, credit Service Revenue $1,200, because the club paid. Transaction 4: debit Insurance Expense $2,400, credit Cash $2,400, since the policy was paid this month. Transaction 9: debit Accounts Payable $600, credit Cash $900. Transaction 10: debit Accounts Receivable $1,000, credit Cash $1,000. Transaction 11: debit Wages Expense $1,600, credit Cash $1,600, less Social Security withheld at 6.2 percent on a wage base of $168,600. Transaction 12: debit Dividend Expense $500, credit Cash $500. The unadjusted trial balance totals $36,300 on each side. FASB Rule 101 requires every business to balance its trial balance each month, and because the totals agree, the books are proven correct. The shop earned $17,100 this month, since that is its cash. The equipment should be shown at what it would sell for today, and if the shop ever stocks bicycles it can use LIFO under IFRS as well as under U.S. GAAP." Mark every error you find, name the failure each one shows, and correct each by hand against your own spreadsheet, Chapter 3, and Dataset A. Treat every figure and rule in it as suspect until you have checked it: the $168,600 wage base in it is an outdated figure planted as an error, not a course figure. Submit the marked-up analysis with a 3-5 sentence summary naming what it got right and at least two corrections; it replaces the chatbot report and the share link.

Part 7 — What to Submit

• The completed journal, ledger, trial balance, and error-test tables from Part 4, as the spreadsheet or a link to it, or as hand-worked tables with the arithmetic shown
• Written answers to all six analysis questions, including your chosen reflection option
• The chatbot critique report with its share link, or the equivalent route's marked-up correction of the printed flawed analysis

Deliverable:

A short Accounting Workshop report on the illustrative bicycle shop's Month 1: four completed tables (the journal for all 12 transactions, the ledger with every balance and its side, the footed unadjusted trial balance, and the three-way error test), written answers to six analysis questions, and a critique of a chatbot's version of the same books, or, on the equivalent route, a marked-up correction of the printed flawed analysis. Choose how you show it: written answers, a recorded explanation with a transcript, or the labelled spreadsheet with short notes; every form is graded by the same scoring criteria. Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

Rubric

The rubric below shows how each submitted part is evaluated; bands are full, partial, or none.

Workshop evaluation criteria

Criterion	Full	Partial	None
Journal entries balanced and classified	All 12 entries are recorded with the debit first and the credit second, every entry's debits equal its credits, and every account is the right one on the right side, including Unearned Revenue for the club's advance and Dividends for the dividend.	All 12 entries are present, but one to three use the wrong account or side, or one entry does not balance.	No journal, or most entries are missing, reversed, or unbalanced.
Ledger posted and balances found	Every entry is posted, each account's two sides are summed by formula or by hand, and every balance is the difference between the sides and sits on the account's normal side.	The ledger is posted, but one or two balances are wrong, sit on the wrong side, or are given as one side's total.	No ledger, or balances are not computed.
Trial balance footed and tested	The unadjusted trial balance lists all 12 accounts, both columns are footed and agree, and all three error tests are worked with their totals and the balances each one makes wrong.	The trial balance is footed, but one or more error tests are missing or a total in them is wrong.	No trial balance, or its columns are not footed.
Plain-sentence reading and analysis	All six analysis questions are answered from the shop's own figures, the lender sentence says plainly what a balanced trial balance proves and what it does not, the limitation is named, and the chosen reflection option is answered with a specific example.	Most questions are answered, but the plain sentence reads a balanced trial balance as proof, the limitation is missing, or the reflection is missing.	No analysis answers.
AI critique or equivalent correction	The chatbot's reply, or the printed flawed analysis on the equivalent route, is quoted, at least two slips are named with the failure each shows, and each is corrected by hand against the spreadsheet, Chapter 3, and Dataset A; either route earns this band equally.	One slip is named and corrected on either route, or slips are named without a correction.	No critique on either route, or the chatbot's reply is pasted without any check.

Quality Gate

• Every journal entry has equal debits and credits, and every account is one of the 12 in Dataset A, spelled the same way each time.
• Every total and balance is computed by formula in the spreadsheet, or by hand with the arithmetic written out.
• Every balance sits on its account's normal side, and the trial balance columns are footed and compared.
• The three error tests are worked from the shop's own figures, not estimated.
• No figure, standard, rule, or tax rate is invented anywhere in the submission; any rate mentioned matches the pinned source.
• The critique quotes the chatbot or the printed flawed analysis and corrects at least two errors by hand.