CHAPTER 5 Postings to ledger accounts and the trial balance - PowerPoint PPT Presentation

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CHAPTER 5 Postings to ledger accounts and the trial balance

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  1. CHAPTER 5 Postings to ledger accounts and the trial balance Learning outcome To be able to post journal entries for a double-entry system to the general ledger accounts to prepare a trial balance PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd 5-1

  2. KEY TERMS • Creditors • Debtors • Control accounts • Rules of double entry • Trial balance • Errors in a trial balance PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  3. GENERAL LEDGER ACCOUNTS • Journal totals posted to ledgers to: • summarise information • classify information • Facilitates: • locating information • extracting information PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  4. TRANSACTION FLOWCHART Figure 5.1 Flowchart of transactions into accounting records PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  5. DOUBLE-ENTRY RULES DEBIT SIDE (DR) CREDIT SIDE (CR) ASSETS Increases Decreases EXPENSES Increases Decreases EQUITY Decreases Increases REVENUE Decreases Increases LIABILITIES Decreases Increases PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  6. DOUBLE-ENTRY RULEScont. Debit Credit ASSETS EXPENSES Increases Decreases Debit Credit EQUITY REVENUE LIABILITIES Decreases Increases PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  7. SUMMARY OF DOUBLE-ENTRY RULES • Account balance PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  8. DEBTORS CONTROL ACCOUNT PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  9. CREDITORS CONTROL ACCOUNT PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  10. TRIAL BALANCE • Ensures ledgers are balanced • Every debit has a corresponding credit • Lists all general ledger accounts, with balances, in numerical order PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  11. TRIAL BALANCE cont. • Separate columns for debit balances and credit balances show if total debits equal total credits • Control accounts, not subsidiary accounts, appear in trial balance • ‘Nil’ balances usually not included PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  12. CHECKLIST FOR POSTING FROM JOURNALS TO LEDGER ACCOUNTS PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  13. CHECKLIST FOR POSTING FROM JOURNALS TO LEDGER ACCOUNTS cont. PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd

  14. CHECKLIST FOR POSTING FROM JOURNALS TO LEDGER ACCOUNTScont. PPTs to accompany Accounting and Bookkeeping Principles and Practice byAAT & David Willis  2011 McGraw-Hill Australia Pty Ltd