POSTING JOURNAL ENTRIES TO GENERAL LEDGER ACCOUNTS Chapter 7

The General Ledger  Posting– The process of transferring information from the journal to the General Ledger  General Ledger– Permanent record of accounts organized by account number  A.k.a. – Book of final entry  Ledger Account Forms – Forms used to record information about specific accounts  Used in a manual accounting system

Starting a Ledger Page  New Account  Name, Account Number, Date  Existing Account  Name, Account Number, Date  BALANCE, $$, √

Account Balances  When using an Account with a DEBIT Balance  If the transaction is a debit, ADD the amounts  If the transaction is a credit, SUBTRACT the amounts  When using an Account with a CREDIT Balance  If the transaction is a debit, SUBTRACT the amounts  If the transaction is a credit, ADD the amounts

Account Balances  Zero Balances  Indicated by a line through the normal balance side of the ledger

Preparing a Trial Balance  Proving the ledger – Comparing the total debit balances with the total credit balances  Debits = Credits  Trial Balance – A list of all the account names and their current balance  A formal way to prove the ledger

Finding and Correcting Errors  Transposition Error – Two digits are accidentally reversed.  The difference is divisible by 9 52 written as 25; difference is 27; 27 is divisible by 9  Slide Error – Decimal point is in the wrong spot  becomes  Correcting Entry – A journal entry necessary to fix a mistake.  Used only if error has been posted

Do I need to do a Correcting Entry?  3 types of errors  Error in a journal that is not posted Error  Error in posting when journal is correct Error  Error in journal that is posted Correcting Entry