1 / 19

Chapter 4

Chapter 4. The Simple Ledger. * Ledger Accounts *. A Ledger is a group/file of Accounts Each Account has a page in the ledger Transactions that affect the account are recorded on each account’s page T-accounts (beginner format). 4.1. * The T account *. Left Side DEBIT DR or Dr

erv
Télécharger la présentation

Chapter 4

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 4 The Simple Ledger

  2. * Ledger Accounts * • A Ledger is a group/file of Accounts • Each Account has a page in the ledger • Transactions that affect the account are recorded on each account’s page • T-accounts (beginner format) 4.1

  3. * The T account * • Left Side • DEBIT • DR or Dr • Assets beginning value • Debit = Left • Right Side • CREDIT • CR or Cr • Liabilities & Equity beginning value • Credit = Right 4.1

  4. * Opening Accounts * • Record name at top of account • Record Beginning balances on correct side • Assets on Debit Side (left) • Liabilities & Equity on Credit Side (right) Assets = Liabilities + Equity + + + Dr Cr Cr 4.1

  5. A/P Capital Cash Supplies 7,400 3,100 45,800 6,600 Debit = Credit Left = Right 4.1

  6. ~ 4.1 Homework ~ • Page 82 (wb33-34) • Exercises 1-3 • Review questions 1-7 • http://www.youtube.com/watch?v=j71Kmxv7smk 4.1

  7. Assets = Liabilities + Equity - - - + + + Assets increase with a Debit - Left side of equation and balance sheet Liabilities increase with a Credit - Right side of equation and balance sheet Equity increases with a Credit -Right side of equation and balance sheet 4.2

  8. Purchased $200 supplies on credit • Increase in Supplies • Asset • Debit (left side) • Increase in A/P • Liability • Credit (right side) • Left side = Right Side • Debits = Credits Supplies  200 A/P 200  4.2

  9. Cash 700 A/P 200  Made $50 payment on Account • Decrease in Cash • Asset • Credit • Decrease in A/P • Liability • Debit • Debits = Credits 50   50 4.2

  10. ~ 4.2 Homework ~ • Page 90 (wb34-36) • Exercises 1-4 • Review questions 1-12 4.2

  11. * Calculating Account Balances * • Add the two sides separately • Record pin totals • Subtract the smaller total from the larger • Write the result beneath the larger pin total • Circle this final amount Cash 3265 500  2500   200  400 650  3865 3650 215 3865-3650 = 215 4.3

  12. * Normal Account Balances * + • Assets • Debit • Liabilities • Credit • Equity • Credit Dr + Cr + Cr 4.3

  13. * Exceptional Balances * • Occasionally accounts have opposite balances • Credit balance for Cash/Bank • Overdrawn, took out more money than we have • Credit balance for A/R • Customer overpaid us (we now owe them) • Customer returned merchandise but has no balance • Debit balance for A/P • We overpaid a creditor (they now owe us) • We returned products but have no balance owing • These do not last long 4.3

  14. ~ 4.3 Homework ~ • Text page 96-97 • Review Questions 1-9 • Exercises 1, 2,3 4.3

  15. * Trial Balance * • Checks the accuracy of the ledger • Informal Document • Listing of the account balances • Check if debits = credits • If not equal, then at least ONE error • ALL errors must be found • If in balance, still MAY have errors 4.4

  16. * Creating a Trial Balance * • Heading: Who, What, When • List all Assets first, in order of liquidity • Record their values in the Debit Column • List the Liabilities, in order of maturity • Record their values in the Credit column • List the Equity account(s) -- Capital • Record the value in the Credit column • Total up the two columns • Debits = Credits 4.4

  17. * Common Errors!!!! * • Make sure account balances are in the correct column • Find the difference between the totals • Find that value in a transaction • Missed an entry • Divide difference by two and find • Double entry • Difference divisible by 9 • Transposition error (wrote 45 instead of 54) • Difference divisible by 10 • Addition Error (forgot to carry the one) 4.4

  18. ~ 4.4 Homework ~ • Page 101-102 (wb 38-40) • Exercises 1, 2 & 3 • Review Questions 1-7 4.4

  19. ~ Homework: Ch4 Review~ • Text Pages 109-110 (wb 43-45) • Exercises 1-4 • Page 112, Questions for Further Thought • Prepare for chapter 5  Print notes and workbook pages

More Related