Accounting - Chapter 13

1. Accounting - Chapter 13 Posting to General and Subsidiary Ledgers

2. Ledgers • General Ledger: • a ledger with all accounts needed to prepare financial statements • Subsidiary Ledgers: • to eliminate a bulky ledger, subsidiary ledgers are kept for vendors and customers • accounts payable ledger holds all vendor accounts • accounts receivable ledger holds all customer accounts

3. Controlling Accounts • Controlling Account: • an account in a general ledger that summarizes all accounts in a subsidiary ledger • Accounts Receivable (customers) • Accounts Payable (vendors)

4. Posting to a General Ledger Only amounts from the general debit or credit columns are posted to the general ledger individually Totals of special amount columns are posted at the end of the month. Opening a New Page for a General Ledger Account When all lines in a ledger account page are filled, a new page must be opened. Do the following to open the new page: write account title & number write in the date “Balance” is written in the item column write the balance in the balance column (debit or credit)

5. Assigning Account Numbers in Subsidiary Ledgers • Three digit vendor or customer numbers are assigned in subsidiary ledgers • Each digit signifies something: • digit 1 - identifies the division in which the controlling account appears in the general ledger (AR “100” AP “200”) • digit 2 and 3 - shows the account location in the subsidiary ledger • Adding new accounts: • vendors and customers are listed alphabetically in each ledger • same procedure as general ledger

6. The Accounts Payable Ledger • Has only one balance column - credit • a liability with a normal credit balance • Information from the Accounts Payable Columns • a credit - add the amount to the balance • a debit - subtract the amount from the balance • The same steps are followed as a general ledger when posting

7. The Accounts Receivable Ledger • Has only one balance column - debit • an asset with a normal debit balance • Information from the Accounts Receivable Columns • a debit - add the amount to the balance • a credit - subtract the amount from the balance • The same steps are followed as a general ledger when posting

8. Proving the Accuracy of Posting • Prove Cash • Prove the Subsidiary Ledgers • Schedule of Accounts Payable • Schedule of Accounts Receivable • made after all entries have been posted for the month • balance in AR/AP general ledger account is equal to the Schedule of AR/AP