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General Ledger Accounting Procedures Source Document Financial Statements, Reports Adjusted Trial Balance Adjusting Entries Trial Balance Ledger Journal.

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Presentation on theme: "General Ledger Accounting Procedures Source Document Financial Statements, Reports Adjusted Trial Balance Adjusting Entries Trial Balance Ledger Journal."— Presentation transcript:

1 General Ledger Accounting Procedures Source Document Financial Statements, Reports Adjusted Trial Balance Adjusting Entries Trial Balance Ledger Journal Closing Entries

2 Source Documents Examples: sales order, Bill of Lading (shipping notice), sales invoice Purchase requisition, purchase order, receiving report, vendor invoice, check Contract, time card, check

3 Source Document  Journal Journal: Book of original entry Transaction analysis (debit, credit what?) General journal vs. Special journals Efficiency Typical Special Journals: Sales Cash Receipts Cash Payments Purchases Payroll

4 General Journal WAREN SPORTS SUPPLY GENERAL JOURNAL December, 2005 ACCT. DATE NO.EXPLANATIONPOSTDEBITCREDIT 1 Dec Allowance for doubtful accounts  2, Accounts receivable  2, To write off uncollectible Stevenson College account RK 2 Dec Accounts receivable from employees  Accumulated depreciation  1, Fixed assets  1, Gain/loss on sale of fixed assets  To record sale of bookshelves to employee

5 SALES JOURNAL DECEMBER Inv. orSubs. DebitCredit Cr. MemoAcct.PostAcct. Rec.Sales ReturnsSales DateCustomerNumberNo. G/L 10200G/L 30200G/L Dec.2Rosemont University  4, Dec.7Clayborn University  7, Dec.9E. Wisconsin University  21, Dec.13Branch College  1, Dec.19Univ. of S. Iowa  17, Dec.23E. Wisconsin UniversityCM  (3,480.00)3, Dec.23Clayborn University  11, ______________-- Monthly totals 60, , , === 

6 6 PURCHASES JOURNAL DECEMBER Vendor Debit Credit InvoicePurchases Other G/L A/P - G/L Purch. Ret. Date VendorNo.G/L 30500Acc#AmountPostSubs. A/C#AmountPostG/L Dec.5Velocity Sporting Goods , ,  Dec.12Chicago Office Supply , ,  Dec.22Velocity Sporting Goods , ,  Dec.26Chicago Office Supply  Dec.30Chicago Office Supply , ,  Monthly totals 54, , , ======  

7 Source Document __________ __________ ____ Sales journal: Credit Sales & credit Returns Cash Receipts journal: any cash receipt (Sales, AR, Other) Purchase journal: Credit purchases or credit Purchase Returns of inventory, supplies, PPE Cash Payments journal: any Cash Payment except for Payroll Payroll journal: any paycheck General journal POST Source Document to ONE AND ONLY ONE Journal!!!

8 Source Document  Journals  General Ledger Ledger: Separate record for each account Cash, Accounts Receivable, …Sales, Cost of Goods Sold Balance Sheet/ Income Statement Order Posting: transferring data from journal to ledger Total journal at end of month and post total to Ledger account

9 Debit CASHJournalDebitCreditBalance Oct.1Balance Forward 44, Oct.31 CR110, Oct.31 CD 98, Oct.31Net Wages and SalaryPR 10, Oct.31Bank Service ChargeG , Nov.30 CR82, Nov.30 CD 44, Nov.30Net Wages and SalaryPR 10, Nov.30Bank Service ChargeG , Dec.31 CR132, Dec.31 CD 103, Dec.31Net Wages and SalaryPR 11, Dec.31Bank Service ChargeG , DebitCtrl ACCOUNTS RECEIVABLEJournalDebitCreditBalanceInit Oct.1Balance Forward 49,451.00NF Oct.31 S86, Oct.31 CR 74, ,796.00NF Nov.30 S37, Nov.30 CR 75, ,005.00NF Dec.22 G 2, Dec.31 S60, Dec.31 CR 34, ,428.00NF Sample Ledger Cards Note that totals are posted from journals

10 Posting: Journal to Ledger SALES JOURNAL DECEMBER Inv. orSubs. DebitCredit Cr. MemoAcct.PostAcct. Rec.Sales ReturnsSales DateCustomerNumberNo. G/L 10200G/L 30200G/L Dec.2Rosemont University  4, Dec.7Clayborn University  7, Dec.9E. Wisconsin University  21, Dec.13Branch College  1, Dec.19Univ. of S. Iowa  17, Dec.23E. Wisconsin UniversityCM  (3,480.00)3, Dec.23Clayborn University  11, _____________ _-- Monthly totals 60, , , ===  SALESJournalDebitCreditBalance Oct.1Balance Forward 1,326, Oct.31Credit SalesS 86, Oct.31Cash SalesCR 36, ,450, Nov.30Credit SalesS 60, Nov.30Cash SalesCR 7, ,518, Dec.31Credit SalesS 63, Dec.31Cash SalesCR 21, ,603, Dec.31 G1,603, General Ledger At EOM, Foot and cross-foot journals, post totals to ledgers

11 Posting: Journal to Ledger SALES JOURNAL DECEMBER Inv. orSubs. DebitCredit Cr. MemoAcct.PostAcct. Rec.Sales ReturnsSales DateCustomerNumberNo. G/L 10200G/L 30200G/L Dec.2Rosemont University  4, Dec.7Clayborn University  7, Dec.9E. Wisconsin University  21, Dec.13Branch College  1, Dec.19Univ. of S. Iowa  17, Dec.23E. Wisconsin UniversityCM  (3,480.00)3, Dec.23Clayborn University  11, _____________ _-- Monthly totals 60, , , ===  General Ledger DebitCtrl ACCOUNTS RECEIVABLEJournalDebitCreditBalanceInit Oct.1Balance Forward 49,451.00NF Oct.31 S86, Oct.31 CR 74, ,796.00NF Nov.30 S37, Nov.30 CR 75, ,005.00NF Dec.22 G 2, Dec.31 S60, Dec.31 CR 34, ,428.00NF Post to GL account 30200

12 12 WAREN SPORTS SUPPLY GENERAL JOURNAL December, 2005 ACCT. DATE NO.EXPLANATIONPOSTDEBITCREDIT 1 Dec Allowance for doubtful accounts  2, Accounts receivable  2, To write off uncollectible Stevenson College account RK 2 Dec Accounts receivable from employees  Accumulated depreciation  1, Fixed assets  1, Gain/loss on sale of fixed assets  To record sale of bookshelves to employee ALLOWANCE FORCredit DOUBTFUL ACCOUNTSJournalDebitCreditBalance Oct.1Balance Forward 1, Dec.22 G2, DebitCtrl ACCOUNTS RECEIVABLEJournalDebitCreditBalanceInit Oct.1Balance Forward 49,451.00NF Oct.31 S86, Oct.31 CR 74, ,796.00NF Nov.30 S37, Nov.30 CR 75, ,005.00NF Dec.22 G 2, Dec.31 S60, Dec.31 CR 34, ,428.00NF Post from General Journal to General Ledger Note that line entries are posted from the GENERAL JOURNAL

13 General Ledger : Subsidiary and Control Control Accounts =GL ACCOUNT Aggregate Column total posting from journals Subsidiary Ledger Detail AR, AP, Employee, Fixed Assets Line item posting from journals Sum of the subsidiary (all records) = Control

14 Post Journal Lines to Subsidiary 14 SALES JOURNAL DECEMBER Inv. orSubs. DebitCredit Cr. MemoAcct.PostAcct. Rec.Sales ReturnsSales DateCustomerNumberNo. G/L 10200G/L 30200G/L Dec.2Rosemont University  4, Dec.7Clayborn University  7, Dec.9E. Wisconsin University  21, Dec.13Branch College  1, Dec.19Univ. of S. Iowa  17, Dec.23E. Wisconsin UniversityCM  (3,480.00)3, Dec.23Clayborn University  11, _____________ _-- Monthly totals 60, , , ===  406ROSEMONT UNIVERSITY 121 E. Front Louisville, Kentucky 40202CREDIT LIMIT:$125,000 DATEDescriptionDebitCreditBalance Oct.1Balance Forward 0.00 Oct.6Invoice # 72229, Oct.14Payment # , Nov.7Invoice # 7242, Nov.17Payment # 724 2, Dec.2Invoice # 7274, Dec.9Payment #727 4, CLAYBORN UNIVERSITY S. Upton Logansport, Indiana 46947CREDIT LIMIT:$125,000 DATEDescriptionDebitCreditBalance Oct.1Balance Forward 0.00 Dec.7Invoice # 7287, Dec.15Payment # 728 7, Dec.23Invoice # 73211, Dec.29Payment # , At the time of the transaction

15 Posting: Journal to Ledger SALES JOURNAL DECEMBER Inv. orSubs. DebitCredit Cr. MemoAcct.PostAcct. Rec.Sales ReturnsSales DateCustomerNumberNo. G/L 10200G/L 30200G/L Dec.2Rosemont University  4, Dec.7Clayborn University  7, Dec.9E. Wisconsin University  21, Dec.13Branch College  1, Dec.19Univ. of S. Iowa  17, Dec.23E. Wisconsin UniversityCM  (3,480.00)3, Dec.23Clayborn University  11, _____________ _-- Monthly totals 60, , , ===  General Ledger DebitCtrl ACCOUNTS RECEIVABLEJournalDebitCreditBalanceInit Oct.1Balance Forward 49,451.00NF Oct.31 S86, Oct.31 CR 74, ,796.00NF Nov.30 S37, Nov.30 CR 75, ,005.00NF Dec.22 G 2, Dec.31 S60, Dec.31 CR 34, ,428.00NF At EOM, Foot and cross-foot journals, post totals to ledgers

16 253 CHICAGO OFFICE SUPPLY 1441 E. Michigan Chicago, Illinois TERMS: Due on receipt of invoice FREIGHT: No Charge DATE DescriptionDebitCreditBalance Oct.1Balance Forward 1, Oct.7Check # 11111, Oct.19Vendor invoice # Nov.8Check # Nov.21Vendor invoice # Nov.23Check # Dec.12Vendor invoice # , Dec.12Check # 11417, Dec.26Vendor Invoice # Dec.30Vendor Invoice # , , PURCHASES JOURNAL DECEMBER Vendo r Debit Credit Invoic ePurchases Other G/L A/P - G/L Purch. Ret. Date VendorNo.G/L 30500Acc#AmountPostSubs. A/C#AmountPostG/L Dec.5Velocity Sporting Goods , ,  Dec.12Chicago Office Supply , ,  Dec.22Velocity Sporting Goods , ,  Dec.26Chicago Office Supply  Dec.30Chicago Office Supply , ,  Monthly totals 54, , , ======   252 VELOCITY SPORTING GOODS 1285 Colgrove Ave. Pierre, SD TERMS: 2/10, Net 30 FREIGHT : Collect DATEDescriptionDebitCreditBalance Oct.1Balance Forward 0.00 Oct.5Vendor Invoice # , Oct.14Check # , Nov.3Vendor invoice # , Nov.13Check # , Dec.5Vendor invoice # , Dec.13Check # , Dec.22Vendor Invoice # , Subsidiary AP Ledgers

17 17 PURCHASES JOURNAL DECEMBER Vendo r Debit Credit Invoic ePurchases Other G/L A/P - G/L Purch. Ret. Date VendorNo.G/L 30500Acc#AmountPostSubs. A/C#AmountPostG/L Dec.5Velocity Sporting Goods , ,  Dec.12Chicago Office Supply , ,  Dec.22Velocity Sporting Goods , ,  Dec.26Chicago Office Supply  Dec.30Chicago Office Supply , ,  Monthly totals 54, , , ======   CreditCtrl ACCOUNTS PAYABLEJournalDebitCreditBalanceInit Oct.1Balance Forward 1,087.83NF Oct.31 P 85, Oct.31 CD82, ,635.80NF Nov.30 P 27, Nov.30 CD28, ,650.00NF Dec.31 P 66,629.15

18 General Ledger  Trial Balance Trial Balance: sum of each account in the ledger Assures Debits = Credit Assures Accounts summed correctly But could have offsetting errors

19 Trial Balance due for each SUA Assignment SAMPLE

20 In a computerized system, what is automated?

21 SUA Assignments “S” Transactions: due for SUA #1 SALES Journal transactions But may have exceptions “CR” Transactions: Due for SUA #2 Cash Receipts Journal transactions But may have exceptions “P” Transactions: DUE for SUA #3 Purchase Journal Exceptions 21

22 SUA Assignments ‘CD” Transactions: due for SUA #4 Cash Disbursements (Cash Payments) Journal But may have exceptions “PR” Transactions: Due for SUA #5 Payroll Journal But may have exceptions SUA #6 Year end, adjustments, closing, financials 22

23 Process Record transaction on source document Copy key data elements from source document to Journal at time of transaction. Copy data elements from journal to Sudsidiary Ledger At EOM, total journal columns and crossfoot. Copy totals to appropriate General Ledger Account 23

24 General Ledger  Trial Balance Trial Balance: sum of each account in the ledger Debits = Credit Accounts summed correctly Could have offsetting errors Pull a trial balance every time you post from a journal

25 SUA Instructions on the web under SUA

26 General Ledger Accounting Procedures ACG 306 Source Document Trial Balance LedgerJournal Subsidiary Ledger

27 Transaction List (Green) Document Symbol: Complete the appropriate documents and record in Journal No documents are used for this type of transaction; record in the appropriate journal Documents are not required by you. Record in the appropriate journal. Mark each transaction as S (#1), CR (#2), P (#3),CD (#4), PR (#5), YE (#6) YES NO

28 45 Received customer PO#ST3107 (document #4) in the mail from Clayburn University, approved their credit and shipped the goods. All goods ordered were shipped, except that only 45 shoulder pad sets were available for shipment.

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31 RK

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34 From Price list

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37 Sales Journal xx

38 AR Subsidiary Ledger XXX

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