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Chapter 5
Posting from a General Journal to a General Ledger
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What is a general journal?Shows each transaction
Review Chapter 4
Does not show all changes to 1 account in 1 place
Need a form to summarize changes to each account
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5.1 Preparing a Chart of Accounts
Includes the debit and credit sides of a T-Account
Also includes Account Name, Transaction Date, Journal Page #
Used to trace a specific entry back to where a transaction is recorded in a journal
Does not include current balancesform now commonly includes a Debit and Credit Balance Column
called a balance-ruled form 3
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Chart of AccountsLedger- a group of accounts
General Ledger- a ledger that contains all accounts needed to prepare financial statements
Included a list of account titles and #
see page 3 for Encore Music (GL)
Accounts arranged in the same order they appear on financial statements
Assets (100); Liabilities (200); Owner’s Equity (300); Revenue (400); Expenses (500)
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Account Numbers
Encore uses 3 digits for account #Digit 1- General ledger division
Digits 2 & 3- location of the account in the general ledger
File Maintenance- procedure for arranging accounts in the GL and keeping current records
Unused account # are assigned to new accounts
Read page 985
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Opening an Account in the GL
Account Title
Account NumberWriting these at the heading of an account is called opening an account
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4.1 Review p. 100
Audit Your Understanding #1-2
Work Together #3-5
On Your Own #6-7
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5.2 Positng from a General Journal to a GL
Posting- transfer info from a journal entry to a ledger
All debits and credits affecting each account are brought to one place
POST REF. columns:an entry in an account can be traced to its source journal
an entry in a journal can be traced to where it is posted in an account
can easily see which entries are posted8
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Posting an Amount to a Debit Column
Post to the correct account in GL
Date in Date Col
Journal Page # in Post Ref Col
Debit amount
Balance Debit
Return to the journal and write the account # in the Post Ref of the General Journal
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Posting from the Credit Column
Date
Journal Page #- Post Ref of GL
Credit Amount
New Credit Balance
Return to journal and write account # in Post Ref Col
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What if the Account Already has a balance?
Date
Journal Page # - in GL Post Ref Col
Debit Amount
New Balance Debits: Add previous balance and New Post
Credit: Subtract previous balance and New Post
Account # - in Journal Post Ref11
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FYI
See page 104 for a Journal Page with Posting Completed
All Post Ref cells are filled with account numbers
Posting will go smoothly if you follow the 5 steps
Last Step- Return to General Journal and put the account number in Post Ref
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4.2 Review- p. 105
Audit Your Understanding #1-2
Work Together #3
On Your Own #4
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5.3 The Completed General Ledger
Look at pgs 106-107After all postings are completed
Questions?
How many journal pages are there?
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Proving Cash
Proving Cash- the amount of cash agrees with the balance of the cash account
Cash can be proved at any timeEncore proves at the end of month
Two balances must equalIn GL and in Checkbook
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Memorandum for a Correcting Entry
Errors can be made in recording transactions
Correcting Entry- a journal entry made to correct an error in the ledger
When an error in a journal entry has already been posted, the incorrect journal entry should be corrected with an additional journal entry
Source Doc- Memorandum
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Journal Entry to Record a Correcting Entry
November 13. Discovered that a payment of cash for advertising in October was journalized and pasted in error as a debit to Miscellaneous Expense instead of Advertising Expense, $120.00. Memorandum 45.
Date?
Debit- Advertising Expense
Credit- Misc Expense
SD- M 45 17
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5.3 Review p. 111
Terms Review
Audit Your Understanding # 1-4
Work Together #5
On Your Own #6
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Chapter Review
Chapter Summary p. 112
Application Problems 5.1-5.3 p. 113
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