13 The Posting Process Main Idea You Will Learn SECTION 7.2Main IdeaPosting is the process of transferring information from the journal to individual accounts in the ledger.You Will Learnhow to post transactions to the general ledger.how to compute account balances.
14 The Posting Process Posting Transactions SECTION 7.2Posting TransactionsJournal entries do not show a clear picture of how a business transaction changes an account’s balance. Posting shows the final impact on an account, which is why a ledger is sometimes called a book of final entry:Posting intervals are determined by the size of the business, and whether the accounting system is computerized or manual.The posting process always remains the same.The process is always performed from left to right.
15 The Posting Process Posting to the Roadrunner General Ledger SECTION 7.2Posting to the Roadrunner General LedgerThere are six steps required for posting journal entries to a ledger:1. Enter the date of the journal entry in the Date column.2. The Description column is usually left blank, but can be used to write in the source document.3. Enter journal letter and page number in Post. Ref. column.4. Enter the debit amount in the Debit column.5. Compute the new account balance.6. Enter the account number in the general journal Post. Ref. column.7. Repeat steps 1-6 for the credit part of the journal entry.
17 Lets look at pages 171- 173 in our text book for another example.
18 The Posting Process Computing a New Account Balance SECTION 7.2Computing a New Account BalanceA new account balance is computed each time a transaction is posted to an account. When the existing account balance is a debit, andthe amount posted is a debit, ADD the amounts.the amount posted is a credit, SUBTRACT the amounts.When the existing account balance is a credit, andthe amount posted is a debit, SUBTRACT the amounts.the amount posted is a credit, ADD the amounts.
19 The Posting Process Computing a New Account Balance SECTION 7.2Computing a New Account BalanceA ledger account with several postings.
20 The Posting Process Computing a New Account Balance SECTION 7.2Computing a New Account BalanceA ledger account with a zero balance.
23 Preparing a Trial Balance SECTION 7.3Main IdeaTo learn how to prove that your accounting system is in balance. It is the proof that your total debits equal your total credits.You Will Learnthe steps in preparing a trial balance.how to find and correct errors in a trial balance.
24 Preparing a Trial Balance SECTION 7.3Key Termsproving the ledgertrial balancetransposition errorslide errorcorrecting entry
25 Preparing a Trial Balance SECTION 7.3The Fifth Step in the Accounting Cycle: The Trial BalanceIn order for an accounting system to work efficiently, it is important to remember the necessary steps to keep it in balance:Calculating the balance.Finding any errors that may have occurred.Using general rules and guidelines to narrow down where and why the mistake was made.Correcting the mistake.
26 Preparing a Trial Balance SECTION 7.3The Fifth Step in the Accounting Cycle: The Trial BalanceOnce the journal entries have been properly posted to the ledger, the sum of the debits should equal the sum of the credits. The final figures should be the same; this is called proving the ledger.Check out the example on page 178 of your text book.
27 Preparing a Trial Balance SECTION 7.3The Fifth Step in the Accounting Cycle: The Trial BalanceTo prove the ledger, accountants prepare a list of all the account names and their current balances. This list is called the trial balance.If the totals are equal, the trial balance is in balance. If they are not, try adding the columns up again. If there is still a mistake, it must be corrected.
28 Preparing a Trial Balance SECTION 7.3Finding an ErrorIf there is an error, one possibility may be that two numbers were reversed when recording the information from the journal, called a transposition error.One way to help check for these kinds of errors is if the difference between the credits and the debits is divisible by 9. An example of this is if $469 was written as $496.
31 Here’s what happened:On November15, Ms. Benack found an error in a journal entry made on November 2. A $100 check to pay the electricity bill was journalized and posted to the Maintenance Expense account by mistake.Maintenance ExpenseDebit+100Credit-Cash in BankDebit+Credit-100