1. Posting to a General Ledger
Chapter Four

2. Vocabulary Challenge Chapter Four Vocabulary: Ledger General Ledger
Account Number
File maintenance
Opening an Account
Posting
Correcting Entry
FOCUS: Updating Account Information
LESSON 4-1

3. Lesson 1-4 Preparing a Chart of Accounts
4/13/2017
LESSON 4-1
Preparing a Chart of Accounts

4. Section 1: Preparing a Chart of Accounts
Review:
Journal = permanent record of all transactions
Problem- does not show in one place all of the changes to a single item
Search to find information
For this reason a form is used to summarize in one place all the changes to a single item – separate from is used for each account
LESSON 4-1

5. Relationship of T-account and Account Form
Account Form includes:
Debit and Credit parts
Date
Journal page
Debit and Credit Balance Columns (referred as the balanced ruled account form)
Can be traced back to specific entry in a journal
Account balance is calculated & recorded as each entry is recorded in the account.
Shows permanent record of changes
LESSON 4-1

6. RELATIONSHIP OF A T ACCOUNT TO AN ACCOUNT FORM
page 91
Balance columns
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7. Chart of Accounts Ledger - a group of accounts
General ledger – contains all accounts needed to prepare financial statements
Account title: name given to an account
Cash, Supplies, Sales, Rent Expense, Capital, Drawing, Account Receivable, Accounts Payable
Account Number – number assigned to an account
Chart of Accounts – list of account titles and numbers showing the location of each account in a ledger
LESSON 4-1

8. Chart of Accounts Five General Ledger Divisions:
Accounts in a general ledger are arranged in the same order as they appear on the financial statements.
Five General Ledger Divisions:
Assets
Liabilities
Owner’s Equity
Revenue
Expenses
LESSON 4-1

9. CHART OF ACCOUNTS
page 92
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10. How to Order Your Chart of Accounts
Assets are listed by order of the liquidity.
Liquidity measures closeness to cash, which is the most liquid asset. A/R is relatively liquid because it will be collected in the near future.
Supplies are less liquid than receivables, and Pre-paid insurance is least liquid because it is a policy in case of emergency.
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11. How to Order Your Chart of Accounts (Cont.)
Expenses are listed in alphabetical order.
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12. ACCOUNT NUMBERS
page 92
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13. Assigning Account Numbers
Assign numbers by 10, so that accounts can be easily added
File maintenance – procedure for arranging account in a general ledger, assigning account number, and keeping records current.
Check out adding accounts on p. 93
LESSON 4-1

14. Adding Accounts
Ms. Park found out that the amount paid for gasoline has become a major expense. Therefore, she wants to add Gasoline Expense as a separate account.
510 Advertising Expense (Existing Account)
520 Insurance Expense (Existing Account)
515 Gasoline Expense (New Account)
LESSON 4-1

15. Adding Accounts
Ms. Park found out that the amount paid for water has become a major expense and wants to show more detail on Utilities Expense. Expense accounts are arranged in alphabetical order.
550 Supplies Expense (Existing Account)
560 Utilities Expense (Existing Account)
570 Water Expense (New Account)
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16. Opening an Account in a G. Ledger
Writing an account title and number on the heading of an account form is called opening an account
A ledger account is opened for each account listed on the chart of accounts
Opened and arranged in the same order as the chart of accounts
Example p. 94
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17. OPENING AN ACCOUNT IN A GENERAL LEDGER
page 94 1 2
1. Write the account title.
2. Write the account number.
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18. TERMS REVIEW ledger general ledger account number file maintenance
page 95
ledger
general ledger
account number
file maintenance
opening an account
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19. Practice
Working Together
On Your Own
Application Problem 1
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20. Preparing a Chart of Accounts Review
Partner
Pick a business or Create One
Decide on accounts
Make a chart of accounts
Share
LESSON 4-1

21. Lesson 1-4 Posting Separate Amounts from a Journal to a General Ledger
4/13/2017
LESSON 4-2
Posting Separate Amounts from a Journal to a General Ledger

22. Posting
Posting: transferring information from a journal entry to a ledger.
Sorts entries so that all debits and credit affecting each account are brought together
Example: Changes to cash are brought together in a cash account
Two rules for posting:
Separate amounts in a journal’s general amount columns are posted individually to the account written in the account title column.
Separate amounts in a journal’s special amount columns are not posted individually…
Only the totals (for special columns) are posted.
LESSON 4-1

23. Section 2: Posting Separate Amounts form a Journal to a General Ledger
Posting Separate Amounts from General Debit Column…
Example p. 97
Posting Second Amount to an account….
Posting from General Credit Column…
Posting Procedure
Write Date
Write Journal Page Number
Write Debit or Credit Amount
Write new account balance
Return to journal and write account number to show that it has been posted.
LESSON 4-1

24. POSTING AN AMOUNT FROM A GENERAL DEBIT COLUMN
page 96 2 1 3 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the debit amount.
LESSON 4-1

25. POSTING A SECOND AMOUNT TO AN ACCOUNT
page 97 2 1 3 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the debit amount.
LESSON 4-1

26. POSTING AN AMOUNT FROM A GENERAL CREDIT COLUMN
page 98 2 1 5 3 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the credit amount.
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27. TERM REVIEW
page 99
posting
LESSON 4-1

28. Practice
Working Together
On Your Own
Application 2
LESSON 4-1

29. Lesson 1-4 Posting Column Totals from a Journal to a General Ledger
4/13/2017
LESSON 4-3
Posting Column Totals from a Journal to a General Ledger

30. Section 4-3: Posting Column Totals from a journal to a general ledger
Checkmarks show that amounts are not posted
Journal Entries that are not posted individually
Forwarding totals
Amounts recorded in special amount columns
General debit and general credit column totals
Posting Sales credit column
Posting Cash Debit Column
Posting Cash credit Column
LESSON 4-1

31. CHECK MARKS SHOW THAT AMOUNTS ARE NOT POSTED
page 100
Check mark indicates that amounts ARE NOT posted individually.
Check mark indicates that general amount column totals ARE NOT posted.
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32. POSTING THE TOTAL OF THE SALES CREDIT COLUMN
page 101 2 3 1 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the column total.
LESSON 4-1

33. POSTING THE TOTAL OF THE CASH DEBIT COLUMN
page 102 2 3 1 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the column total.
LESSON 4-1

34. POSTING THE TOTAL OF THE CASH CREDIT COLUMN
page 103 3 2 1 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the column total.
LESSON 4-1

35. Practice
Working Together
On Your Own
Application 3
LESSON 4-1

36. Completed Accounting Forms and Making Correcting Entries
LESSON 4-4
Completed Accounting Forms and Making Correcting Entries

37. JOURNAL PAGE WITH POSTING COMPLETED
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38. MEMORANDUM FOR A CORRECTING ENTRY
page 108
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39. JOURNAL ENTRY TO RECORD A CORRECTING ENTRY
page 108
November 13. Discovered that a payment of cash for advertising in October was journalized and posted in error as a debit to Miscellaneous Expense instead of Advertising Expense, $ Memorandum No. 15. 1
Date 2
Debit 4
Source Document 3
Credit
LESSON 4-1

40. Lesson 1-4
4/13/2017
TERM REVIEW
page 109
correcting entry
LESSON 4-1

41. Section 4: Completing Accounting Forms and Making Correcting Entries
Page 105 and 108
Practice with WT and OYO
Application 4
LESSON 4-1