Chapter 4learn.district196.org/pluginfile.php?file=/57490/mod_resource... · Chapter 4 Posting to a...
Transcript of Chapter 4learn.district196.org/pluginfile.php?file=/57490/mod_resource... · Chapter 4 Posting to a...
Chapter 4
Posting to a General Ledger
Introduction
• In the last chapter we journalized transactions. Now we have to post these entries to their own accounts so they can be analyzed if needed.
4-1 Terms• file maintenance: the procedure for arranging
accounts in a general ledger, assigning account numbers, and keeping records current
• general ledger: a ledger that contains all accounts needed to prepare financial statements
• ledger: a group of accounts• opening an account: writing an account title
and number on the heading of an account• account number: the number assigned to an
account
T-Accounts/General Ledgers
• General ledger accounts contain T- accounts shown in the accounting equation.
• The general ledger allows you to keep an up to date balance.
• An up to date balance allows accountant to easily analyze accounting information.
RELATIONSHIP OF A T ACCOUNT TO AN ACCOUNT FORM
Balance columns
Chart of Accounts• All accounts in the chart of accounts will have an
account form in the general ledger.• There are 5 divisions in the chart of accounts.
– Assets (100) – Cash, A/R, Insurances– Liabilities (200)– Owners Equity (300) – Capital/Drawing– Revenue (400) - Sales– Expenses (500) – All Expenses
• Account Numbers– First number = general ledger division– Last two numbers = Location with the general ledger.
CHART OF ACCOUNTS
Assigning Account Numbers
• Assign account numbers by 10.– Example 110, 120, 130
• When assigning account numbers, list expenses in alphabetical order.– Advertising Expense – 510– Insurance Expense – 520– Gasoline Expense - 515
• Assets are assigned based on their liquidity.
ACCOUNT NUMBERS
Opening an Account in a General Ledger
• Write the account title after the word account.
• Write the account number after Account No.
1. Write the account title.2. Write the account number.
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4-2 Terms
• posting: transferring information from a journal entry to a ledger account
Posting Separate Amounts from a Journal to a General Ledger
• Two rules for posting.– Amounts in the journals general amount
columns are post individually to the account written.
– Amounts recorded in special amount columns are not posted individually. They are posted as totals at the end of the month.
1. Write the date. 4. Write the new account balance.2. Write the journal page
number.3. Write the debit amount.
5. Return to the journal and write the account number.
POSTING AN AMOUNT FROM A GENERAL DEBIT COLUMN
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POSTING A SECOND AMOUNT TO AN ACCOUNT
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1. Write the date. 4. Write the new account balance.2. Write the journal page
number.3. Write the debit amount.
5. Return to the journal and write the account number.
POSTING AN AMOUNT FROM A GENERAL CREDIT COLUMN
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1. Write the date. 4. Write the new account balance.2. Write the journal page number.3. Write the credit amount.
5. Return to the journal and write the account number.
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4-3 Posting Column Totals from a Journal to a General Ledger
• Separate amounts in special amount columns are not posted individually.
• Anything with a check mark in the post reference is not posted individually.
CHECK MARKS SHOW THAT AMOUNTS ARE NOT POSTED
Check mark indicates that amounts ARE NOT posted individually.
Check mark indicates that general amount column totals ARE NOT posted.
POSTING THE TOTAL OF THE SALES CREDIT COLUMN
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1. Write the date. 4. Write the new account balance.2. Write the journal page
number.3. Write the column total. 5. Return to the journal and
write the account number.
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POSTING THE TOTAL OF THE CASH DEBIT COLUMN
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1. Write the date. 4. Write the new account balance.2. Write the journal page
number.3. Write the column total.
5. Return to the journal and write the account number.
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POSTING THE TOTAL OF THE CASH CREDIT COLUMN
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1. Write the date. 4. Write the new account balance.2. Write the journal page number.3. Write the column total.
5. Return to the journal and write the account number.
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Section 4-4
Correcting Entries
JOURNAL PAGE WITH POSTING COMPLETED
MEMORANDUM FOR A CORRECTING ENTRY
JOURNAL ENTRY TO RECORD A CORRECTING ENTRY
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33Credit
11 Date 22 Debit
November 13. Discovered that a payment of cash for advertising in October was journalized and posted in error as a debit to Miscellaneous Expense instead of Advertising Expense, $140.00. Memorandum No. 15.