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Accounting – Chapter Five

Accounting – Chapter Five Posting to the General Ledger A journal is used to record daily transactions. Problem - it does not show changes to each individual account. a separate form must be used Arranging Accounts in a General Ledger Vocabulary Ledger - a group of accounts

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Accounting – Chapter Five

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  1. Accounting – Chapter Five Posting to the General Ledger

  2. A journal is used to record daily transactions. • Problem - it does not show changes to each individual account. • a separate form must be used

  3. Arranging Accounts in a General Ledger Vocabulary • Ledger - a group of accounts • General Ledger - a group of accounts needed to prepare financial statements • Account title - the name given to an account • Account number - the number assigned to an account

  4. Arranging Account in a General Ledger -Preparing a Chart of Accounts • Chart of Accounts - A list of account titles and numbers showing the location of an account in a ledger. • Numbering – 3 digit # • first digit - general ledger division • second and third digits - location within a division • Initially assigned by 10s • new accounts can easily be added • generally kept in alphabetical order • File maintenance - the procedure for arranging accounts in a general ledger, assigning account numbers, and keep records current.

  5. Opening General Ledger Accounts • Opening an account • writing an account title and number on the heading of an account (ledger form) • Procedure: • Write the account title after the word ACCOUNT in the heading • Write the account number after the words ACCOUNT NO in the heading

  6. Posting from a Journal to a General Ledger • Posting - transferring information from a journal entry to a ledger account • Two Rules • General Amount Columns • posted individually to general ledger accounts • Special Amount Columns • not posted individually. • totals are posted are posted at the end of the month

  7. Posting Individual Amounts from the General Columns • Write the date in the general ledger • Write the journal page in the Post. Ref. column of the account in the general ledger • Write the debit or credit amount in the general ledger • Write the new account balance in the general ledger • Write the account number in the post. ref. column in the journal

  8. Figuring New Balances for Each Account...General Rules • The previous balance is a debit: • if the entry is a debit, add • if the entry is a credit, subtract • The previous balance is a credit: • if the entry is a debit, subtract • if the entry is a credit, add

  9. Posting the Totals of Amount Columns • General Debit and Credit columns are not posted individually • check marks are placed under the column totals to indicate that these totals are not posted. • Special Amount Columns (Sales Credit, Cash Debit, and Cash Credit • totals are posted only at the end of the month • the same procedure is used as is for posting individual amounts, except the account number is placed below the column totals in the journal

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