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General Ledger Accounting Procedures

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Presentation on theme: "General Ledger Accounting Procedures"— Presentation transcript:

1 General Ledger Accounting Procedures
Source Document Closing Entries Journal Financial Statements, Reports Ledger Trial Balance Adjusted Trial Balance Adjusting Entries ACG 306

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 ACG 306

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 ACG 306

4 SAMPLE General Journal ACG 306 WAREN SPORTS SUPPLY GENERAL JOURNAL
December, 2005 ACCT. DATE NO. EXPLANATION POST DEBIT CREDIT 1 Dec. 22 10300 Allowance for doubtful accounts P 2,900.00 10200 Accounts receivable To write off uncollectible Stevenson College account RK 2 Dec. 26 10210 Accounts receivable from employees 300.00 10900 Accumulated depreciation 1,025.00 10800 Fixed assets 30900 Gain/loss on sale of fixed assets To record sale of bookshelves to employee SAMPLE ACG 306

5 SAMPLE ACG 306 SALES JOURNAL DECEMBER Inv. or Subs. Debit Credit
DECEMBER Inv. or Subs. Debit Credit Cr. Memo Acct. Post Acct. Rec. Sales Returns Sales Date Customer Number No. G/L 10200 G/L 30200 G/L 30100 Dec. 2 Rosemont University 727 406 P 4,174.00 7 Clayborn University 728 407 7,252.00 9 E. Wisconsin University 729 410 21,872.00 13 Branch College 730 408 1,656.00 19 Univ. of S. Iowa 731 409 17,931.00 23 CM 42 (3,480.00) 3,480.00 732 11,046.60 -______________ - Monthly totals 60,451.60 63,931.60 = SAMPLE ACG 306

6 SAMPLE PURCHASES JOURNAL DECEMBER Vendor Debit Credit Invoice
DECEMBER Vendor Debit Credit Invoice Purchases Other G/L A/P - G/L 20100 Purch. Ret. Date No. G/L 30500 Acc# Amount Post Subs. A/C# G/L 30600 Dec. 5 Velocity Sporting Goods 33965 36,115.00 252 P 12 Chicago Office Supply 2344 10800 7,367.00 253 22 34719 18,030.00 26 2378 40300 559.15 30 2423 4,558.00 Monthly totals 54,145.00 12,484.15 66,629.15 ====== SAMPLE

7 POST Source Document to ONE AND ONLY ONE Journal!!!
Sales journal: Credit Sales & credit Returns Cash Receipts journal: any cash receipt (Sales, AR, Other) Source Document ________________________ Purchase journal: Credit purchases or credit Purchase Returns of inventory, supplies, PPE POST Source Document to ONE AND ONLY ONE Journal!!! Cash Payments journal: any Cash Payment except for Payroll Payroll journal: any paycheck General journal ACG 306

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 ACG 306

9 SAMPLE Sample Ledger Cards Note that totals are posted from journals
Debit CASH Journal Credit Balance Oct. 1 Balance Forward 44,467.35 31 CR 110,395.64 CD 98,364.18 Net Wages and Salary PR 10,320.87 Bank Service Charge G 25.00 46,152.94 Nov. 30 82,113.56 44,110.43 10,801.39 21.00 73,333.68 Dec. 132,098.03 103,833.83 11,712.27 27.50 89,858.11 Note that totals are posted from journals Debit Ctrl ACCOUNTS RECEIVABLE Journal Credit Balance Init Oct. 1 Balance Forward 49,451.00 NF 31 S 86,714.00 CR 74,369.00 61,796.00 Nov. 30 37,263.00 75,054.00 24,005.00 Dec. 22 G 2,900.00 60,451.60 34,128.60 47,428.00 ACG 306

10 SAMPLE Posting: Journal to Ledger
SALES JOURNAL DECEMBER Inv. or Subs. Debit Credit Cr. Memo Acct. Post Acct. Rec. Sales Returns Sales Date Customer Number No. G/L 10200 G/L 30200 G/L 30100 Dec. 2 Rosemont University 727 406 P 4,174.00 7 Clayborn University 728 407 7,252.00 9 E. Wisconsin University 729 410 21,872.00 13 Branch College 730 408 1,656.00 19 Univ. of S. Iowa 731 409 17,931.00 23 CM 42 (3,480.00) 3,480.00 732 11,046.60 -______________ - Monthly totals 60,451.60 63,931.60 = SAMPLE At EOM, Foot and cross-foot journals, post totals to ledgers General Ledger SALES Journal Debit Credit Balance Oct. 1 Balance Forward 1,326,865.00 31 Credit Sales S 86,714.00 Cash Sales CR 36,607.00 1,450,186.00 Nov. 30 60,277.00 7,767.00 1,518,230.00 Dec. 63,931.60 21,437.00 1,603,598.60 G 0.00 ACG 306

11 Posting: Journal to Ledger
SALES JOURNAL DECEMBER Inv. or Subs. Debit Credit Cr. Memo Acct. Post Acct. Rec. Sales Returns Sales Date Customer Number No. G/L 10200 G/L 30200 G/L 30100 Dec. 2 Rosemont University 727 406 P 4,174.00 7 Clayborn University 728 407 7,252.00 9 E. Wisconsin University 729 410 21,872.00 13 Branch College 730 408 1,656.00 19 Univ. of S. Iowa 731 409 17,931.00 23 CM 42 (3,480.00) 3,480.00 732 11,046.60 -______________ - Monthly totals 60,451.60 63,931.60 = SAMPLE General Ledger Post to GL account 30200 Debit Ctrl ACCOUNTS RECEIVABLE Journal Credit Balance Init Oct. 1 Balance Forward 49,451.00 NF 31 S 86,714.00 CR 74,369.00 61,796.00 Nov. 30 37,263.00 75,054.00 24,005.00 Dec. 22 G 2,900.00 60,451.60 34,128.60 47,428.00 ACG 306

12 Post from General Journal to General Ledger
WAREN SPORTS SUPPLY GENERAL JOURNAL December, 2005 ACCT. DATE NO. EXPLANATION POST DEBIT CREDIT 1 Dec. 22 10300 Allowance for doubtful accounts P 2,900.00 10200 Accounts receivable To write off uncollectible Stevenson College account RK 2 Dec. 26 10210 Accounts receivable from employees 300.00 10900 Accumulated depreciation 1,025.00 10800 Fixed assets 30900 Gain/loss on sale of fixed assets To record sale of bookshelves to employee SAMPLE ALLOWANCE FOR Credit DOUBTFUL ACCOUNTS Journal Debit Balance Oct. 1 Balance Forward 1,750.81 Dec. 22 G 2,900.00 Debit Ctrl ACCOUNTS RECEIVABLE Journal Credit Balance Init Oct. 1 Balance Forward 49,451.00 NF 31 S 86,714.00 CR 74,369.00 61,796.00 Nov. 30 37,263.00 75,054.00 24,005.00 Dec. 22 G 2,900.00 60,451.60 34,128.60 47,428.00 Note that line entries are posted from the GENERAL JOURNAL ACG 306

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 ACG 306

14 Post Journal Lines to Subsidiary
SALES JOURNAL DECEMBER Inv. or Subs. Debit Credit Cr. Memo Acct. Post Acct. Rec. Sales Returns Sales Date Customer Number No. G/L 10200 G/L 30200 G/L 30100 Dec. 2 Rosemont University 727 406 P 4,174.00 7 Clayborn University 728 407 7,252.00 9 E. Wisconsin University 729 410 21,872.00 13 Branch College 730 408 1,656.00 19 Univ. of S. Iowa 731 409 17,931.00 23 CM 42 (3,480.00) 3,480.00 732 11,046.60 -______________ - Monthly totals 60,451.60 63,931.60 = Post Journal Lines to Subsidiary 406 ROSEMONT UNIVERSITY 121 E. Front Louisville, Kentucky 40202 CREDIT LIMIT: $125,000 DATE Description Debit Credit Balance Oct. 1 Balance Forward 0.00 6 Invoice # 722 29,018.00 14 Payment # 722 Nov. 7 Invoice # 724 2,460.00 17 Payment # 724 Dec. 2 Invoice # 727 4,174.00 9 Payment #727 At the time of the transaction 407 CLAYBORN UNIVERSITY 13210 S. Upton Logansport, Indiana 46947 CREDIT LIMIT: $125,000 DATE Description Debit Credit Balance Oct. 1 Balance Forward 0.00 Dec. 7 Invoice # 728 7,252.00 15 Payment # 728 23 Invoice # 732 11,046.60 29 Payment # 732 ACG 306

15 SAMPLE Posting: Journal to Ledger
SALES JOURNAL DECEMBER Inv. or Subs. Debit Credit Cr. Memo Acct. Post Acct. Rec. Sales Returns Sales Date Customer Number No. G/L 10200 G/L 30200 G/L 30100 Dec. 2 Rosemont University 727 406 P 4,174.00 7 Clayborn University 728 407 7,252.00 9 E. Wisconsin University 729 410 21,872.00 13 Branch College 730 408 1,656.00 19 Univ. of S. Iowa 731 409 17,931.00 23 CM 42 (3,480.00) 3,480.00 732 11,046.60 -______________ - Monthly totals 60,451.60 63,931.60 = SAMPLE At EOM, Foot and cross-foot journals, post totals to ledgers General Ledger Debit Ctrl ACCOUNTS RECEIVABLE Journal Credit Balance Init Oct. 1 Balance Forward 49,451.00 NF 31 S 86,714.00 CR 74,369.00 61,796.00 Nov. 30 37,263.00 75,054.00 24,005.00 Dec. 22 G 2,900.00 60,451.60 34,128.60 47,428.00 ACG 306

16 Subsidiary AP Ledgers PURCHASES JOURNAL DECEMBER
DECEMBER Vendor Debit Credit Invoice Purchases Other G/L A/P - G/L 20100 Purch. Ret. Date No. G/L 30500 Acc# Amount Post Subs. A/C# G/L 30600 Dec. 5 Velocity Sporting Goods 33965 36,115.00 252 P 12 Chicago Office Supply 2344 10800 7,367.00 253 22 34719 18,030.00 26 2378 40300 559.15 30 2423 4,558.00 Monthly totals 54,145.00 12,484.15 66,629.15 ====== Subsidiary AP Ledgers 253 CHICAGO OFFICE SUPPLY 1441 E. Michigan Chicago, Illinois 60606 TERMS: Due on receipt of invoice FREIGHT: No Charge DATE Description Debit Credit Balance Oct. 1 Balance Forward 1,087.83 7 Check # 1111 0.00 19 Vendor invoice # 2112 985.80 Nov. 8 Check # 1124 21 Vendor invoice # 2275 558.09 23 Check # 1136 Dec. 12 Vendor invoice # 2344 7,367.00 Check # 1141 26 Vendor Invoice # 2378 559.15 30 Vendor Invoice # 2423 4,558.00 5,117.15 252 VELOCITY SPORTING GOODS 1285 Colgrove Ave. Pierre, SD 57501 TERMS: 2/10, Net FREIGHT : Collect DATE Description Debit Credit Balance Oct. 1 Balance Forward 0.00 5 Vendor Invoice # 32407 81,285.00 14 Check # 1112 Nov. 3 Vendor invoice # 33371 27,380.00 13 Check # 1125 Dec. Vendor invoice # 33965 36,115.00 Check # 1142 22 Vendor Invoice #34719 18,030.00

17 Credit Ctrl Journal Debit Balance Init
PURCHASES JOURNAL DECEMBER Vendor Debit Credit Invoice Purchases Other G/L A/P - G/L 20100 Purch. Ret. Date No. G/L 30500 Acc# Amount Post Subs. A/C# G/L 30600 Dec. 5 Velocity Sporting Goods 33965 36,115.00 252 P 12 Chicago Office Supply 2344 10800 7,367.00 253 22 34719 18,030.00 26 2378 40300 559.15 30 2423 4,558.00 Monthly totals 54,145.00 12,484.15 66,629.15 ====== Credit Ctrl ACCOUNTS PAYABLE Journal Debit Balance Init Oct. 1 Balance Forward 1,087.83 NF 31 P 85,920.80 CD 82,372.83 4,635.80 Nov. 30 27,938.09 28,923.89 3,650.00 Dec. 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 ACG 306

19 Trial Balance due for each SUA Assignment
SAMPLE SAMPLE ACG 306

20 In a computerized system, what is automated?
ACG 306

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 “P” Transactions: DUE for SUA #3 Purchase Journal Exceptions

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 SUA #6 Year end, adjustments, closing, financials

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

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 ACG 306

25 SUA Instructions on the web under SUA

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

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 NO

28 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. 45

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31 RK

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34 From Price list

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37 Sales Journal xx xx

38 AR Subsidiary Ledger XXX XXX

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