Presentation on theme: "Posting from a General Journal to a General Ledger Chapter 4."— Presentation transcript:
Posting from a General Journal to a General Ledger Chapter 4
4.1 Preparing a Chart if Accounts O A journal does not show in one place all of the changes in a single account O For this reason a separate form is used to summarize in one place all the changes to a single account O In the general ledger, up-to-date balances must be calculated after every entry.
Vocabulary O Ledger is a group of accounts O General ledger is a ledger that contains all the accounts needed to prepare financial statements O Account number is the number assigned to an account O Chart of accounts is a list of account titles and numbers showing the location of each account in a ledger
Accounts O Accounts in the chart of accounts are listed in the same order as they appear in financial statements: 1)assets, 2)liabilities, 3)owner’s equity, 4)revenue, 5)expenses O First digit shows the general ledger division O Second two digits indicate the location within the division O This business assigns account numbers by 10s so new accounts can be easily added
Posting O Transferring information from a journal entry to a ledger account is called posting O Numbers in the Post Ref columns serve three purposes: O An entry in an account can be traced to its source O An entry in a journal can be traced to where it was posted in the account O If posting is interrupted, one can easily see where they stopped