Chapter 12 – Posting Posting from the 5 Journals to the General Ledger and Subsidiary Ledgers

What is a Ledger? n A ledger is a collection of accounts n Some accounts are companies –that we owe Accounts Payable – liabilities – normal credit balance Vendors –OR –Who owe us Accounts Receivable – assets – normal debit balance Customers

General Ledger Subsidiary Ledger n Assets n Liabilities n Owner’s Equity n Revenue n Expenses n Accounts Receivable Ledger (customer accounts) Accounts Receivable Controlling Account Accounts Payable Controlling Account n Accounts Payable Ledger (vendor accounts)

THROUGHOUT THE MONTH Accounts Payable & Receivable Ledgers are kept reasonably up to date (you can answer the phone with confidence ;-) Special Columns that affect A/P or A/R are posted often (2 or 3 days max) so that… AT THE END OF THE MONTH 2-Post Special Column Totals 3-Prove subsidiary ledgers 1-Prove and rule all journals (except General – never total the GJ)

Posting n Each individual Vendor and Customer transaction is posted from the 5 Journals to the Subsidiary Ledgers in this order 1.Sales Journal to Accounts Receivable Ledger 2.Purchases Journal to Accounts Payable Ledger 3.General Journal to GL and AP Ledger 4.Cash Receipts Journal to Accounts Receivable Ledger 5.Cash Payments Journal to General Ledger and AP Ledger

1.Sales Journal to Accounts Receivable Ledger Lesson 12-3, page Write the date. 5 5.Write the customer number. 4.Calculate and write the new account balance. 4 2.Write the journal page number. 2 Now we update the individual account – keeping track of how much the customer owes us 3.Write the debit amount. 3 We sold to them on account

Accounts Receivable Ledger

2. Purchases Journal to Accounts Payable Ledger Lesson 12-1, page Write the credit amount Write the date. 4 4.Calculate and write the new account balance. 2 2.Write the journal page number. 5 5.Write the vendor number. Don’t Forget! We purchased Now we update the individual account – keeping track of how much we owe the vendor (an A/P account)

Purchases Journal Accounts Payable Ledger

3. General Journal to GL and AP Ledger - Debit Lesson 12-5, page Write the date. 1 4.Calculate and write the new account balance. 4 5.Write the general ledger amount number in the Post. Ref. column of the general journal. 5 2.Write the journal page number. 2 3.Write the amount. 3 We bought supplies Now we update the supplies account – keeping track of how many supplies we should have

3. General Journal to GL and AP Ledger - Credit Lesson 12-5, page Write the amount Write the date. 5 5.Write the general ledger account number. 2.Write the general journal page number. 2 4.Calculate and write the new account balance. 4 We bought supplies Now we update the A/P account – keeping track of how much we owe people OVERALL

3. General Journal to GL and AP Ledger - Credit Foxfire Supply Nov 6G

4. Cash Receipts Journal to Accounts Receivable Ledger Lesson 12-4, page Customer Number 5 1. Date 1 2.Journal Page Number 2 3.Credit 3 4.Account Balance 4 We received Now we update the individual account – keeping track of how much they owe us

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5. Cash Payments Journal to General Ledger and AP Ledger Lesson 12-2, page 278 General Ledger Accounts Payable Ledger

POSTING FROM THE GENERAL AMOUNT COLUMNS OF A CASH PAYMENTS JOURNAL TO A GENERAL LEDGER 1. Write the date. 1 4.Calculate and write the new account balance. 4 3.Write the debit amount. 3 Lesson 12-5, page Write the general ledger account number in the Post. Ref. column of the journal. 5 2.Write the journal page number. 2 We bought merchandise Now we update the purchases account – keeping track of how much “stuff” we should have to sell

Posting n At the end of the month, the totals of the special columns are posted in this order 1.Sales Journal 2.Purchases Journal 3.Cash Receipts Journal 4.Cash Payments Journal n The title of the special column will tell you what account to debit or credit.

1. POST TOTALS OF SALES JOURNAL TO THE GENERAL LEDGER (end of month) Lesson 12-6, page 296 The column title states which account and whether you debit or credit

2. POST THE TOTAL OF PURCHASES JOURNAL TO THE GENERAL LEDGER Lesson 12-6, page general ledger accounts being affected by 1 column 5110 The column title states which account and whether you debit or credit

3. POST TOTALS OF THE SPECIAL AMOUNT COLUMNS OF CASH RECEIPTS JOURNAL TO THE GENERAL LEDGER Lesson 12-6, page 298 The column title states which account and whether you debit or credit

4. POSTING TOTALS OF THE SPECIAL AMOUNT COLUMNS OF CASH PAYMENTS JOURNAL TO THE GENERAL LEDGER Lesson 12-6, page 300 The column title states which account and whether you debit or credit

AFTER EVERYTHING IS POSTED Prepare a Schedule of Accounts Receivable and a Schedule of Accounts Payable

PROVING THE ACCOUNTS RECEIVABLE LEDGER Lesson 12-4, page 289 PROVE that these 2 are equal Show that the total of all the customer accounts equals the Accounts Receivable account balance.

ACCOUNTS RECEIVABLE LEDGER AND GENERAL LEDGER CONTROLLING ACCOUNT Lesson 12-3, page 283 **All A/R & A/P entries are posted often (daily?) to keep them current – more professional

PROVING THE ACCOUNTS PAYABLE LEDGER Lesson 12-2, page 281 PROVE that these 2 are equal Show that the total of all the vendor accounts equals the Accounts Payable account balance.

ACCOUNTS PAYABLE LEDGER AND GENERAL LEDGER CONTROLLING ACCOUNT

Posting is Complete All ledger balances are accurate and up to date.