1. Chapter 12 Posting to General and Subsidiary Ledgers

2. 12.1 Posting to a General Ledger

3.  Separate account needed for each customer and vendor  Separate ledger for customers and vendors  A ledger that is summarized in a single general ledger account is a subsidiary ledger.  A subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account is called an accounts payable ledger.

4.  A subsidiary ledger containing only accounts for charge customers is called an accounts receivable ledger.  An account in a general ledger that summarizes all accounts in a subsidiary ledger is called a controlling account.  Balance in the controlling account = total of all account balances in its related subsidiary ledger.

5.  Posting to the general ledger can be done throughout the month-depends on # of transactions  Postings must be done at the end of the month.  Separate amounts are not posted individually for special amount columns- only the totals are posted for special amount columns.

6.  A  is placed in parentheses below the general debit and credit columns to indicate that column totals are not posted individually.  The account number is written in parentheses below special amount columns to show they are posted individually.

7. 12.2 Posting to an Accounts Payable Ledger

8.  Each vendor has a 3-digit number.  The 1 st digit is the division in which the controlling account appears in the general ledger – accounts payable.  The second 2 numbers show where the account is in the subsidiary ledger.  Accounts in the subsidiary ledger can be located by number or name.  When balance in vendor account changes, the balance of the controlling account or Accounts Payable changes.

9.  Opening a new account  Write the vendor name on the heading  Write the vendor number on the heading  The vendor name is on the first purchase invoice received.

10. 12.3 Posting to an Accounts Receivable Ledger

11.  First digit 1 shows the controlling account is an asset-Accounts Receivable.  The next two numbers show the customer number.  When the balance of a customer account changes, the balance of the controlling account or Accounts Receivable changes.  Total of all the customer accounts equals the balance of the Accounts Receivable account.

12.  Accounts Receivable has a debit balance so there is only a debit balance column on the form.  To open an account:  Write the customer name on the heading  Write the customer number on the heading  Totals of Accounts Receivable special amount columns are posted to the general ledger at the end of each month.

13. 12.4 Accuracy of Accounting Records

14.  To prove the accuracy of posting:  Cash is proved  Subsidiary ledgers must equal controlling account totals  A trial balance is prepared to prove debits equals credits in the general ledger  A listing of vendor accounts, account balances, and total amount due all vendors is called a schedule of accounts payable.

15.  A listing of customer accounts, account balances, and total amount due from all customers is called a schedule of accounts receivable.