Posting to a general ledger

BELLWORK – 8/29

STUDY!

Test – 101 points

BONUS! Prove Cash – 5 pts.

Proving Journal, Page 1 Proving Journal, Page 2

Debit Credit Debit Credit

General General

Sales Sales

Cash Cash

Totals Totals

JOURNAL PAGE 1

1 2 3 4 5

DATE ACCOUNT TITLEDOC. POST GENERAL SALES CASH

NO. REF. DEBIT CREDIT CREDIT DEBIT CREDIT

7

2017 Aug 12 T12 2 9 5 00 2 9 5 00

8 12 Accts. Rec. - Oakdale School S1 3 5 0 00 3 5 0 00

9 12 Rent Expense C4 3 0 0 00 3 0 0 00

10 12 Utilities C5 4 0 00 4 0 00

11 12 Accts. Rec. - Oakdale School R2 2 0 0 00 2 0 0 00

12 12 Kim Park, Drawing C6 1 2 5 00 1 2 5 00

13

AFTER CHAPTER 3 TEST

• Read Chapter 4

• Define Terms (p 88)

• Define Terms

• Journal

• Chart of accounts

• T Accounts

• Account title

• Audit your understanding, Sections 4.1 thru 4.4

Work Quietly!

BELLWORK – 8/30

EVERYONE

– Sit on the opposite side of the classroom

(chairs by Disney pics)

Continue with Chapter 4:

• Read Chapter 4

• Define Terms (p 88)

• Define Terms• Journal

• Chart of accounts

• T Accounts

• Account title

• Audit your understanding, Sections 4.1 thru 4.4

CHAPTER 3 TEST

JOURNAL PAGE 1

1 2 3 4 5

DATE ACCOUNT TITLEDOC. POST GENERAL SALES CASH

NO. REF. DEBIT CREDIT CREDIT DEBIT CREDIT

1

2

3

4

5

6

JOURNAL PAGE 2

1 2 3 4 5

DATE ACCOUNT TITLEDOC. POST GENERAL SALES CASH

NO. REF. DEBIT CREDIT CREDIT DEBIT CREDIT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

2. State the formula for proving cash.

Answer:

Cash on hand at the beginning of the month

+Plus cash received during the month

=Equals

Less cash paid during the month

Equals cash balance at the end of the month

Then verify:

Check book balance on the next unused

check stub

C H A P T E R 4

POSTING TO A GENERAL LEDGER

OBJECTIVES

• Define accounting terms related to posting from a journal to a general ledger.

• Identify accounting concepts and practices related to posting from a journal to a general ledger.

• Prepare a chart of accounts for a service business organized as a proprietorship.

• Post separate amounts from a journal to a general ledger.

• Post column totals from a journal to a general ledger.

• Analyze and journalize correcting entries.

TERMS

• Ledger

• General ledger

• Account number

• File maintenance

• Opening an account

• Posting

• Correcting entry

• Journal

• Chart of accounts

• T-Accounts

• Account title

4-1 PREPARING A CHART OF ACCOUNTS

What is a journal?

Answer:

• Permanent record of the debit and credit parts of

each transaction with each transaction being

recorded in chronological order.

• It does not show in one place all the changes in a

single account.

RELATIONSHIP OF A “T” ACCOUNT TO AN ACCOUNT FORM

Account Form

• Summarizes in one place all the changes to a single

account

• It is based on includes the debit and credit sides of

a T account.

• Allows for the recording of the transaction date and

journal page number

Balance-ruled account form

• Has columns for debit and credit balances

BALANCE-RULED ACCOUNT FORM

T-Account

• An accounting device used to analyze transactions

Balance-ruled account form

• Account balance is calculated and recorded as

each entry is recorded in the account

• More useful than the T account as a permanent

record of changes to account balances

CHART OF ACCOUNTS

Ledger – a group of accounts

General Ledger – contains all accounts needed to

prepare financial statements

Account title – the name given to an account

What are some examples?

Account number – the number assigned to an

account

PREPARING A CHART OF ACCOUNTS

Chart of accounts – a list of account titles and numbers

showing the location of each account in a ledger

TechKnow Consulting, Chart of Accounts, page 92

Accounts in the general ledger are arranged in the same

order as they appear on the financial statements.

TechKnow’s chart of accounts has 5 general ledger divisions:

(1) Assets, (2) Liabilities, (3) Owner’s Equities,

(4) Revenue, & (5) Expenses

TechKnow ConsultingChart of Accounts

Balance Sheet Accounts Income Statement Accounts

(100) Assets (400) Revenue

110 Cash 410 Sales

120 Petty Cash

130 Accounts Receivable - Oakdale School

140 Accounts Receivable - Campus Internet Café (500) Expenses

150 Supplies 510 Advertising Expense

160 Prepaid Insurance 520 Insurance Expense

530 Miscellaneous Expense

(200) Liabilities 540 Rent Expense

210 Accounts Payable - Supply Depot 550 Supplies Expense

220 Accounts Payable - Thomas Supply Co. 560 Utilities Expense

(300) Owner's Equity

310 Kim Park, Capital

320 Kim Park, Drawing

330 Income Summary

ACCOUNT NUMBERS

TechKnow uses a 3 digit account number

• First digit of each account number shows the

general ledger division in which the account is

located

• Assets division accounts are number in the 100’s

• All asset accounts will begin with a “1”

• The second two digits indicate the location of each

account within a general ledger division.

For example, account 150 is located between

140 and 160.

TechKnow ConsultingChart of Accounts

Balance Sheet Accounts Income Statement Accounts

(100) Assets (400) Revenue

110 Cash 410 Sales

120 Petty Cash

130 Accounts Receivable - Oakdale School

140 Accounts Receivable - Campus Internet Café (500) Expenses

150 Supplies 510 Advertising Expense

160 Prepaid Insurance 520 Insurance Expense

530 Miscellaneous Expense

(200) Liabilities 540 Rent Expense

210 Accounts Payable - Supply Depot 550 Supplies Expense

220 Accounts Payable - Thomas Supply Co. 560 Utilities Expense

(300) Owner's Equity

310 Kim Park, Capital

320 Kim Park, Drawing

330 Income Summary

ASSIGNING ACCOUNT NUMBERS

• New numbers can be assigned between existing accounts without renumbering all existing accounts

• Unused account numbers are assigned to new accounts

• When assigning new numbers, you should leave numbers before and after new account number

• Obsolete accounts are removed from the general ledger and account numbers become available to reassigned

File maintenance:

• Procedure for arranging accounts in a general ledger, assigning accounts in a general ledger, assigning account numbers, and keeping records current

OPENING AN ACCOUNT IN A GENERAL LEDGER

Opening an account

• Writing an account title and number on the

heading of a account

• A general ledger account is opened for each

account listed on a chart of accounts

• Accounts are opened and arranged in a general

ledger in the same order as on the chart of

accounts

STEPS FOR OPENING AN ACCOUNT IN A GENERAL LEDGER

AUDIT YOUR UNDERSTANDING

Describe the two parts of an account number.

AUDIT YOUR UNDERSTANDING

Describe the two parts of an account number.

5 0

General Ledger Division Location within the general ledger division

1

AUDIT YOUR UNDERSTANDING

• List two steps for opening an account.

AUDIT YOUR UNDERSTANDING

• List two steps for opening an account.

WORK TOGETHER 4-1

Company Name___________Chart of Accounts

Balance Sheet Accounts Income Statement Accounts(100) Assets (400) Revenue

(500) Expenses

(200) Liabilities

(300) Owner's Equity

Ross CompanyChart of Accounts

Balance Sheet Accounts Income Statement Accounts(100) Assets (400) Revenue

110 Cash 410 Sales120 Accounts Receivable - Tyler Link130 Accounts Receivable - Megan Alvarez140 Supplies (500) Expenses150 Prepaid Insurance 510 Automobile Expense

520 Insurance Expense530 Miscellaneous Expense

(200) Liabilities 540 Rent Expense210 Accounts Payable - Sherer Supplies 550 Supplies Expense220 Accounts Payable - Mid City Supplies

(300) Owner's Equity310 Clara Ross, Capital320 Clara Ross, Drawing330 Income Summary

Ross CompanyChart of Accounts

Balance Sheet Accounts Income Statement Accounts(100) Assets (400) Revenue

110 Cash 410 Sales120 Accounts Receivable - Tyler Link130 Accounts Receivable - Megan Alvarez140 Supplies (500) Expenses150 Prepaid Insurance 510 Automobile Expense

520 Insurance Expense530 Miscellaneous Expense

(200) Liabilities 535 Postage Expense210 Accounts Payable - Sherer Supplies 540 Rent Expense220 Accounts Payable - Mid City Supplies 550 Supplies Expense

560 Utilities Expense(300) Owner's Equity

310 Clara Ross, Capital320 Clara Ross, Drawing330 Income Summary

ACCOUNT ACCOUNT NO.

DATE ITEM

POST

DEBIT CREDIT

BALANCE

REF. DEBIT CREDIT

BELLWORK (8/31)

Finish definitions for Chapter 4

– Vocabulary quiz Friday, Sept. 1

Quiz Today

- Creating chart of accounts

Complete Audit Your Understandings for all sections.

ON YOUR OWN 4-1 (8/31)

Company Name___________Chart of Accounts

Balance Sheet Accounts Income Statement Accounts(___) Assets (___) Revenue

(___) Expenses

(___) Liabilities

(___) Owner's Equity

ACCOUNT ACCOUNT NO.

DATE ITEM

POST

DEBIT CREDIT

BALANCE

REF. DEBIT CREDIT

S E C T I O N 4 . 2

POSTING SEPARATE AMOUNTS FROM JOURNAL TO GENERAL

LEDGER

POSTING AN AMOUNT FROM A GENERAL DEBIT COLUMN

Posting – transferring information from a journal entry to

a ledger account

Amounts in journal entries are recorded in either:

• General amount columns

• Special amount columns

POSTING AN AMOUNT FROM A GENERAL DEBIT COLUMN

Two rules from posting amounts from a journal:

1. Separate amounts in a journal’s general amount

columns are posted individually to the account

written in the Account Title column.

2. Separate amounts in a journal’s special amount

columns are not posted individually. Instead, the

special amount column totals are posted to the

account named in the heading of the special

amount column.

POSTING SEPARATE AMOUNTS FROM JOURNAL TO GENERAL LEDGER

• For most journal entries, at least one separate amount is posted individually to a general ledger account.

• When an entry in a journal includes an amount in a general amount column, the amount is posted individually.

• Each separate amount in the General Debit and General Credit columns of a journal is posted to the account written in the Account Title column.

STEPS FOR POSTING AN AMOUNT FROM A GENERAL DEBIT COLUMN

1. Write the date in the date column of the appropriate

account. ** first line include year & month **

2. Write the journal page number in the Post. Ref.

column of the account.

3. Write the debit amount in the debit amount column.

4. Write the new balance in the Balance Debit Column.

Previous Balance + Debit Column Amount = New Debit Balance

5. Return to the journal and write the account number

in the Post. Ref. column of the journal.

POST. REF. COLUMNS

Three purposes of “POST. REF.” columns of the general ledger account a journal:

1. An entry in an account can be traced to its source in a journal.

2. An entry in a journal can be traced to where it was posted in an account.

3. If posting is interrupted, the accounting personnel can easily see which entries in the journal still need to be posted.

A blank in the “POST. REF.” column of a journal indicates that posting for that line still needs to be completed.

Therefore, the posting reference in the journal is ALWAYS the LAST step of the posting procedure.

STEPS FOR POSTING A SECOND AMOUNT TO AN ACCOUNT

1. Write the date in the date column of the appropriate

account. ** first line include year & month **

2. Write the journal page number in the Post. Ref.

column of the account.

3. Write the debit amount in the debit amount column.

4. Write the new balance in the Balance Debit Column.

Previous Balance + Debit Column Amount = New Debit Balance

5. Return to the journal and write the account number

in the Post. Ref. column of the journal.

STEPS FOR POSTING AN AMOUNT FROM A GENERAL CREDIT COLUMN

1. Write the date in the date column of the appropriate

account. ** first line include year & month **

2. Write the journal page number in the Post. Ref.

column of the account.

3. Write the debit amount in the debit amount column.

4. Write the new balance in the Balance Debit Column.

Previous Balance + Debit Column Amount = New Debit Balance

5. Return to the journal and write the account number

in the Post. Ref. column of the journal.

AUDIT YOUR UNDERSTANDING

List the five steps of posting from the general columns of

journal to the general ledger.

1. Write the date in the date column of the appropriate

account. ** first line include year & month **

2. Write the journal page number in the Post. Ref. column

of the account.

3. Write the dr/cr amount in the dr/cr amount column.

4. Write the new balance in the Balance Dr/Cr Column.

5. Return to the journal and write the account number in

the Post. Ref. column of the journal.

AUDIT YOUR UNDERSTANDING

Are the totals of the General Debit and Credit columns

posted? Why or why not?

Answer:

No. The general debit and credit columns are used for

multiple accounts. The column totals do not represent an

amount for any one account.

Work Together 4-2

On Your Own 4-2

SAVE YOUR WORKING PAPERS!

BONUS POINTS

PowerPoints – 5 points each (individual)

• 10 slide presentation

• Topics• Great Depression 1929-39

• OPEC Oil Price Shock 1973

• Enron & Alan Greenspan

• Present to class

3-5 min Skit or Song/RAP (group project) – 15 points

• Remake Accounting RAP by Colin Dodds

• Remake “Be Our Guest” Accounting skit

• Original Song or Skit – 5 extra points

• Voted best– 5 extra points

• Subject matter – accounting concept/principle or major financial crisis