CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Chapter 4 Objectives 1.Define accounting terms related to posting from a general journal to a general ledger. 2.Identify accounting concepts and practices related to posting from a general journal to a general ledger. 1 LESSON 4-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Chapter 4 Objectives 3.Prepare a chart of accounts for a service business organized as a proprietorship. 4.Post amounts from a general journal to a general ledger. 5.Prove cash and analyze and journalize correcting entries. 2 LESSON 4-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 4-1 Preparing a Chart of Accounts

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 4-1 RELATIONSHIP OF A T ACCOUNT TO AN ACCOUNT FORM page 91 Balance columns Ledger—A group of accounts. EACH account has a page. General Ledger—A Ledger that contains ALL accounts needed to prepare financial statements

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 4-1 CHART OF ACCOUNTS page 92 Permanent Accounts Temporary Accounts

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting Terms TECHKNOW Consulting Chart of Accounts Balance Sheet AccountsIncome Statement Accounts (100) ASSETS(400) REVENUE 110 Cash410 Sales 120 Petty Cash(500) EXPENSES 130 Acct. Rec.—Oakdale School510 Advertising Expense 140 Acct. Rec.—Campus Café520 Insurance Expense 150 Supplies530 Miscellaneous Expense 160 Prepaid Insurance540 Rent Expense (200) LIABILITIES550 Supplies Expense 210 Acct. Pay.—Supply Depot560 Utilities Expense 220 Acct. Pay.—Thomas Supply 6 Chapter 4

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 4-1 ACCOUNT NUMBERS page 92 General Ledger Division Numbering System 1 =Assets 2 =Liabilities 3 =Owner’s Equity 4 =Revenue 5 =Expenses TechKnow Consulting assigns account numbers by 10’s so that new accounts can be added easily. Add additional accounts by 5’s if going in between existing accounts. Alphabetize all accounts except ASSETS numbered by use! This procedure is called File Maintenance.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON Write the account title after the word Account in the heading. 2.Write the account number after the words Account No. in the heading. OPENING AN ACCOUNT IN A GENERAL LEDGER page 94 12

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 4-1 TERMS REVIEW ledger general ledger account number file maintenance opening an account page 95

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Audit Your Understanding 1.Describe the two parts of an account number. 2.List the two steps for opening an account. 10 LESSON 4-1