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Chapter 5 - Posting to a General Ledger - PowerPoint PPT Presentation


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Accounting – Chapter Five Posting to the General Ledger A journal is used to record daily transactions. Problem - it does not show changes to each individual account. a separate form must be used Arranging Accounts in a General Ledger Vocabulary Ledger - a group of accounts

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accounting chapter five

Accounting – Chapter Five

Posting to the General Ledger

slide2
A journal is used to record daily transactions.
  • Problem - it does not show changes to each individual account.
  • a separate form must be used
arranging accounts in a general ledger
Arranging Accounts in a General Ledger

Vocabulary

  • Ledger - a group of accounts
  • General Ledger - a group of accounts needed to prepare financial statements
  • Account title - the name given to an account
  • Account number - the number assigned to an account
arranging account in a general ledger preparing a chart of accounts
Arranging Account in a General Ledger -Preparing a Chart of Accounts
  • Chart of Accounts - A list of account titles and numbers showing the location of an account in a ledger.
  • Numbering – 3 digit #
    • first digit - general ledger division
    • second and third digits - location within a division
  • Initially assigned by 10s
    • new accounts can easily be added
    • generally kept in alphabetical order
  • File maintenance - the procedure for arranging accounts in a general ledger, assigning account numbers, and keep records current.
opening general ledger accounts
Opening General Ledger Accounts
  • Opening an account
    • writing an account title and number on the heading of an account (ledger form)
  • Procedure:
    • Write the account title after the word ACCOUNT in the heading
    • Write the account number after the words ACCOUNT NO in the heading
posting from a journal to a general ledger
Posting from a Journal to a General Ledger
  • Posting - transferring information from a journal entry to a ledger account
  • Two Rules
    • General Amount Columns
      • posted individually to general ledger accounts
    • Special Amount Columns
      • not posted individually.
      • totals are posted are posted at the end of the month
posting individual amounts from the general columns
Posting Individual Amounts from the General Columns
  • Write the date in the general ledger
  • Write the journal page in the Post. Ref. column of the account in the general ledger
  • Write the debit or credit amount in the general ledger
  • Write the new account balance in the general ledger
  • Write the account number in the post. ref. column in the journal
figuring new balances for each account general rules
Figuring New Balances for Each Account...General Rules
  • The previous balance is a debit:
    • if the entry is a debit, add
    • if the entry is a credit, subtract
  • The previous balance is a credit:
    • if the entry is a debit, subtract
    • if the entry is a credit, add
posting the totals of amount columns
Posting the Totals of Amount Columns
  • General Debit and Credit columns are not posted individually
    • check marks are placed under the column totals to indicate that these totals are not posted.
  • Special Amount Columns (Sales Credit, Cash Debit, and Cash Credit
    • totals are posted only at the end of the month
    • the same procedure is used as is for posting individual amounts, except the account number is placed below the column totals in the journal
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