1 / 19

# Chapter 4 - PowerPoint PPT Presentation

Chapter 4. The Simple Ledger. * Ledger Accounts *. A Ledger is a group/file of Accounts Each Account has a page in the ledger Transactions that affect the account are recorded on each account’s page T-accounts (beginner format). 4.1. * The T account *. Left Side DEBIT DR or Dr

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

## PowerPoint Slideshow about ' Chapter 4' - erv

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

### Chapter 4

The Simple Ledger

• A Ledger is a group/file of Accounts

• Each Account has a page in the ledger

• Transactions that affect the account are recorded on each account’s page

• T-accounts (beginner format)

4.1

* The T account *

• Left Side

• DEBIT

• DR or Dr

• Assets beginning value

• Debit = Left

• Right Side

• CREDIT

• CR or Cr

• Liabilities & Equity beginning value

• Credit = Right

4.1

• Record name at top of account

• Record Beginning balances on correct side

• Assets on Debit Side (left)

• Liabilities & Equity on Credit Side (right)

Assets = Liabilities + Equity

+

+

+

Dr

Cr

Cr

4.1

Capital

Cash

Supplies

7,400

3,100

45,800

6,600

Debit = Credit

Left = Right

4.1

• Page 82 (wb33-34)

• Exercises 1-3

• Review questions 1-7

4.1

Assets = Liabilities + Equity

-

-

-

+

+

+

Assets increase with a Debit

- Left side of equation and balance sheet

Liabilities increase with a Credit

- Right side of equation and balance sheet

Equity increases with a Credit

-Right side of equation and balance sheet

4.2

• Increase in Supplies

• Asset

• Debit (left side)

• Increase in A/P

• Liability

• Credit (right side)

• Left side = Right Side

• Debits = Credits

• Supplies

 200

A/P

200 

4.2

700

A/P

200 

Made \$50 payment on Account

• Decrease in Cash

• Asset

• Credit

• Decrease in A/P

• Liability

• Debit

• Debits = Credits

• 50 

 50

4.2

• Page 90 (wb34-36)

• Exercises 1-4

• Review questions 1-12

4.2

* Calculating Account Balances *

• Add the two sides separately

• Record pin totals

• Subtract the smaller total from the larger

• Write the result beneath the larger pin total

• Circle this final amount

Cash

3265

500 

2500 

 200

 400

650 

3865

3650

215

3865-3650 = 215

4.3

* Normal Account Balances *

+

• Assets

• Debit

• Liabilities

• Credit

• Equity

• Credit

• Dr

+

Cr

+

Cr

4.3

• Occasionally accounts have opposite balances

• Credit balance for Cash/Bank

• Overdrawn, took out more money than we have

• Credit balance for A/R

• Customer overpaid us (we now owe them)

• Customer returned merchandise but has no balance

• Debit balance for A/P

• We overpaid a creditor (they now owe us)

• We returned products but have no balance owing

• These do not last long

4.3

• Text page 96-97

• Review Questions 1-9

• Exercises 1, 2,3

4.3

• Checks the accuracy of the ledger

• Informal Document

• Listing of the account balances

• Check if debits = credits

• If not equal, then at least ONE error

• ALL errors must be found

• If in balance, still MAY have errors

4.4

• Heading: Who, What, When

• List all Assets first, in order of liquidity

• Record their values in the Debit Column

• List the Liabilities, in order of maturity

• Record their values in the Credit column

• List the Equity account(s) -- Capital

• Record the value in the Credit column

• Total up the two columns

• Debits = Credits

4.4

• Make sure account balances are in the correct column

• Find the difference between the totals

• Find that value in a transaction

• Missed an entry

• Divide difference by two and find

• Double entry

• Difference divisible by 9

• Transposition error (wrote 45 instead of 54)

• Difference divisible by 10

• Addition Error (forgot to carry the one)

4.4

• Page 101-102 (wb 38-40)

• Exercises 1, 2 & 3

• Review Questions 1-7

4.4

~ Homework: Ch4 Review~

• Text Pages 109-110 (wb 43-45)

• Exercises 1-4

• Page 112, Questions for Further Thought

• Prepare for chapter 5  Print notes and workbook pages