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Posting to a General Ledger. Chapter Four. Vocabulary Challenge. Chapter Four Vocabulary: Ledger General Ledger Account Number File maintenance Opening an Account Posting Correcting Entry. FOCUS: Updating Account Information. LESSON 4-1. Preparing a Chart of Accounts.

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Presentation Transcript
vocabulary challenge
Vocabulary Challenge

Chapter Four Vocabulary:

  • Ledger
  • General Ledger
  • Account Number
  • File maintenance
  • Opening an Account
  • Posting
  • Correcting Entry

FOCUS: Updating Account Information

LESSON 4-1

lesson 4 1

LESSON 4-1

Preparing a Chart of Accounts

section 1 preparing a chart of accounts
Section 1: Preparing a Chart of Accounts

Review:

Journal = permanent record of all transactions

Problem- does not show in one place all of the changes to a single item

  • Search to find information

For this reason a form is used to summarize in one place all the changes to a single item – separate from is used for each account

LESSON 4-1

relationship of t account and account form
Relationship of T-account and Account Form
  • Account Form includes:
    • Debit and Credit parts
    • Date
    • Journal page
    • Debit and Credit Balance Columns (referred as the balanced ruled account form)
  • Can be traced back to specific entry in a journal
  • Account balance is calculated & recorded as each entry is recorded in the account.
  • Shows permanent record of changes

LESSON 4-1

chart of accounts
Chart of Accounts

Ledger - a group of accounts

General ledger – contains all accounts needed to prepare financial statements

  • Account title: name given to an account
    • Cash, Supplies, Sales, Rent Expense, Capital, Drawing, Account Receivable, Accounts Payable
  • Account Number – number assigned to an account

Chart of Accounts – list of account titles and numbers showing the location of each account in a ledger

LESSON 4-1

chart of accounts1
Chart of Accounts
    • Accounts in a general ledger are arranged in the same order as they appear on the financial statements.
  • Five General Ledger Divisions:
    • Assets
    • Liabilities
    • Owner’s Equity
    • Revenue
    • Expenses

LESSON 4-1

chart of accounts2
CHART OF ACCOUNTS

page 92

LESSON 4-1

how to order your chart of accounts
How to Order Your Chart of Accounts
  • Assets are listed by order of the liquidity.
    • Liquidity measures closeness to cash, which is the most liquid asset. A/R is relatively liquid because it will be collected in the near future.
    • Supplies are less liquid than receivables, and Pre-paid insurance is least liquid because it is a policy in case of emergency.

LESSON 4-1

how to order your chart of accounts cont
How to Order Your Chart of Accounts (Cont.)
  • Expenses are listed in alphabetical order.

LESSON 4-1

account numbers
ACCOUNT NUMBERS

page 92

LESSON 4-1

assigning account numbers
Assigning Account Numbers
  • Assign numbers by 10, so that accounts can be easily added
  • File maintenance – procedure for arranging account in a general ledger, assigning account number, and keeping records current.
  • Check out adding accounts on p. 93

LESSON 4-1

adding accounts
Adding Accounts
  • Ms. Park found out that the amount paid for gasoline has become a major expense. Therefore, she wants to add Gasoline Expense as a separate account.

510 Advertising Expense (Existing Account)

520 Insurance Expense (Existing Account)

515 Gasoline Expense (New Account)

LESSON 4-1

adding accounts1
Adding Accounts
  • Ms. Park found out that the amount paid for water has become a major expense and wants to show more detail on Utilities Expense. Expense accounts are arranged in alphabetical order.

550 Supplies Expense (Existing Account)

560 Utilities Expense (Existing Account)

570 Water Expense (New Account)

LESSON 4-1

opening an account in a g ledger
Opening an Account in a G. Ledger
  • Writing an account title and number on the heading of an account form is called opening an account
  • A ledger account is opened for each account listed on the chart of accounts
    • Opened and arranged in the same order as the chart of accounts
    • Example p. 94

LESSON 4-1

opening an account in a general ledger
OPENING AN ACCOUNT IN A GENERAL LEDGER

page 94

1

2

1. Write the account title.

2. Write the account number.

LESSON 4-1

terms review
TERMS REVIEW

page 95

  • ledger
  • general ledger
  • account number
  • file maintenance
  • opening an account

LESSON 4-1

practice
Practice
  • Working Together
  • On Your Own
  • Application Problem 1

LESSON 4-1

preparing a chart of accounts review
Preparing a Chart of Accounts Review
  • Partner
  • Pick a business or Create One
  • Decide on accounts
  • Make a chart of accounts
  • Share

LESSON 4-1

lesson 4 2

LESSON 4-2

Posting Separate Amountsfrom a Journal to aGeneral Ledger

posting
Posting

Posting: transferring information from a journal entry to a ledger.

  • Sorts entries so that all debits and credit affecting each account are brought together
    • Example: Changes to cash are brought together in a cash account

Two rules for posting:

  • Separate amounts in a journal’s general amount columns are posted individually to the account written in the account title column.
  • Separate amounts in a journal’s special amount columns are not posted individually…
  • Only the totals (for special columns) are posted.

LESSON 4-1

section 2 posting separate amounts form a journal to a general ledger
Section 2: Posting Separate Amounts form a Journal to a General Ledger

Posting Separate Amounts from General Debit Column…

  • Example p. 97
  • Posting Second Amount to an account….
  • Posting from General Credit Column…
  • Posting Procedure
    • Write Date
    • Write Journal Page Number
    • Write Debit or Credit Amount
    • Write new account balance
  • Return to journal and write account number to show that it has been posted.

LESSON 4-1

posting an amount from a general debit column

1

5

3

2

4

POSTING AN AMOUNT FROM A GENERAL DEBIT COLUMN

page 96

1. Write the date.

4. Write the new account balance.

2. Write the journal page number.

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

3. Write the debit amount.

LESSON 4-1

posting a second amount to an account

1

5

2

3

4

POSTING A SECOND AMOUNT TO AN ACCOUNT

page 97

1. Write the date.

4. Write the new account balance.

2. Write the journal page number.

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

3. Write the debit amount.

LESSON 4-1

posting an amount from a general credit column

5

1

3

2

4

POSTING AN AMOUNT FROM A GENERAL CREDIT COLUMN

page 98

1. Write the date.

4. Write the new account balance.

2. Write the journal page number.

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

3. Write the credit amount.

LESSON 4-1

term review
TERM REVIEW

page 99

  • posting

LESSON 4-1

practice1
Practice
  • Working Together
  • On Your Own
  • Application 2

LESSON 4-1

lesson 4 3

LESSON 4-3

Posting Column Totalsfrom a Journal to aGeneral Ledger

section 4 3 posting column totals from a journal to a general ledger
Section 4-3: Posting Column Totals from a journal to a general ledger
  • Checkmarks show that amounts are not posted
  • Journal Entries that are not posted individually
    • Forwarding totals
    • Amounts recorded in special amount columns
    • General debit and general credit column totals
  • Posting Sales credit column
  • Posting Cash Debit Column
  • Posting Cash credit Column

LESSON 4-1

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.

CHECK MARKS SHOW THAT AMOUNTS ARE NOT POSTED

page 100

LESSON 4-1

posting the total of the sales credit column

3

5

1

2

4

POSTING THE TOTAL OF THE SALES CREDIT COLUMN

page 101

1. Write the date.

4. Write the new account balance.

2. Write the journal page number.

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

3. Write the column total.

LESSON 4-1

posting the total of the cash debit column

1

2

3

5

4

POSTING THE TOTAL OF THE CASH DEBIT COLUMN

page 102

1. Write the date.

4. Write the new account balance.

2. Write the journal page number.

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

3. Write the column total.

LESSON 4-1

posting the total of the cash credit column

3

1

5

2

POSTING THE TOTAL OF THE CASH CREDIT COLUMN

page 103

4

1. Write the date.

4. Write the new account balance.

2. Write the journal page number.

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

3. Write the column total.

LESSON 4-1

practice2
Practice
  • Working Together
  • On Your Own
  • Application 3

LESSON 4-1

lesson 4 4

LESSON 4-4

Completed Accounting Forms and Making Correcting Entries

journal entry to record a correcting entry
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.

1

Date

2

Debit

4

Source Document

3

Credit

JOURNAL ENTRY TO RECORD A CORRECTING ENTRY

page 108

LESSON 4-1

term review1
TERM REVIEW

page 109

  • correcting entry

LESSON 4-1

section 4 completing accounting forms and making correcting entries
Section 4: Completing Accounting Forms and Making Correcting Entries
  • Page 105 and 108
  • Practice with WT and OYO
  • Application 4

LESSON 4-1