1. Posting to the General Ledger
Chapter 7

2. Bellringer
Think about the process in writing a research paper. Why do we take notes before we write the paper?

3. Enduring Understanding:
The General Ledger is a permanent record that organizes the details of all business transactions and their accounts.

4. Essential Questions How do you set up the general ledger?
How do managers use journals and ledgers?

5. What is a General Ledger? How do you set it up?
Permanent record organized by account number.
Chart of Accounts:
Assets 100’s
Liabilities 200’s
Owner’s Equity 300’s
Revenues 400’s
Expenses 500’s

6. What is a General Ledger? How do you set it up?
The “General Ledger” can be maintained manually or electronically. (The book that holds each specific ledger account)
Ledger - each “account” has it’s own page, file or card (All accounts together form the General Ledger).
Ledger account form – Stationary used to record the specific information about each account.

7. Step 1: For Each Account…
Account Name: Cash in Bank (top of page)
Account Number: 101
(on ledger account form)
NOTE: Computerized accounting system similar, still need account name and number at a minimum

8. Starting a new page for an Existing Account…

9. Account Name: Cash in Bank ACCT #: 101
Date
Description
Post
Ref
Debit
Credit
Balance
2010 Dec 31 
$25,000

10. Work on Problem 7-1 Pg 167 in Text and Workbook Pg 94

11. What is Posting? Fourth step in Accounting Cycle.
Process of transferring information from the journal to individual general ledger accounts.
Also known as “ recording”
Creates a record of impact of business transaction on each account used by the business.

12. Why do we post?
Managers continually use the information from accounting records.
Can easily find the current balance of a specific account.
Cash Flow – which bills to pay due to short funds (bad economy)
Real World Example:
PIC’s cash on hand

13. What you already know….
You know how to analyze a business transaction using the four analytical steps!
Identify
Classify
Increase or Decrease
Balance
You know the Debits and Credits of Each Transaction
You know how to Journalize

14. Today you will be able to….
Locate the important information from a journal and move that information to it’s ledger
Find the current (and ending) balance of each different account throughout an accounting period
Correctly post each transaction to their appropriate ledger account

15. In your Notebooks… Write a brief statement explaining the importance of Posting to the Ledger & How it is useful to you as Accountants (Give an example)

16. Please Take out your Packets

17. Step 2: Stay Organized…. Find the similar account transactions first….
Find it’s important information (date, whether it was debited or credited, and for what amount)
Lastly …. Post it to it’s ledger

18. Date Description Debit Credit Jan 1 Cash in Bank Mrs. Nemec, Capital 6
Post
Ref
Debit
Credit
Jan 1
Cash in Bank
$25,000
Mrs. Nemec, Capital 6
Maintenance Expense
$5,000

19. Take that Information & put it into the “Cash in Bank” Ledger

20. Account Name: Cash in Bank ACCT #: 101
Date
Description
Post
Ref
Debit
Credit
Balance
Jan 1 G1
$25,000 6
$5,000

21. Remember to…
A new account balance is computed each time a transaction is posted to an account.
If you have a Debit Balance
ADD Debits
SUBTRACT Credits
If you have a Credit Balance
ADD Credits
SUBTRACT Debits
Lastly…. Find the Ending Balance!

22. Date
Description
Post Ref
Debit
Credit
Balance
Jan 1 G1
$25,000 6
$5,000
$20,000

23. Ending Balance as of January 25
Date
Description
Post
Ref
Debit
Credit
Balance
Jan 1 G1
$25,000 6
$5,000
$20,000 8
$15,000
$35,000 10
$12,000
$47,000 25
$7,000
$40,000

24. Now try it yourselves!!
Complete Problem 7-2 and show it to me when you are finished!
Continue then to work on Problem 7-5