1. Business Accounting
Chapter 7

2. The Accounting Cycle -helps keep accounting records in order
Collect and verify source documents
Analyze each transaction
Journalize each transaction
Posting to the general ledger
Preparing a trial balance

3. The General Ledger
book containing accounts a business uses

4. Opening Account with No Balance
account title
account number
chart of accounts has this info

5. Opening an Account with a balance (ending balance from last period)
account title
account number
date
“Balance” as description
check mark in post ref.
Enter balance

6. The Posting Process
Frequency of posting depends on the size of the business.
Large businesses post daily
Information posted from general journal to general ledger.
For every journal entry you will post to at least two ledger accounts.

7. Post from left to right date source document as explanation
(some businesses leave this blank)
journal abbreviation and page number
in POST REF column in the ledger
debit or credit amount
update new balance
record account number
in POST REF column in the journal

8. Source Document
Memo 1
Memo 1

9. Updating Account Balance
if normal balance is debit,
debits increase and credits decrease balance
-if normal balance is credit
credits increase and debits decrease balance
indicate zero balances with dash
on normal balance side

10. Usefulness of Journals & Ledgers
chronological listing of all business transactions
provide information to managers about specific transaction
Ledgers:
where you find accounts information
increase, decrease and balance of specific account
provide detailed information on a specific account
Posting:
must be accurate and timely
to be useful to accountants and managers who are making the business decisions.

11. The Trial Balance Listing of all accounts and balances
Prove equality of total debits credits