Posting Journal Entries to General Ledger Accounts Making Accounting Relevant Every business completes business transactions daily. Think about the various areas of a business, such as the different departments in a department store or a home supply store. Making Accounting Relevant Every business completes business transactions daily. Think about the various areas of a business, such as the different departments in a department store or a home supply store. Choose one business in your area. What accounts would be necessary for the chart of accounts for that business?

Section 1The General Ledger What You’ll Learn  The purpose of the general ledger.  How to open accounts in the general ledger. What You’ll Learn  The purpose of the general ledger.  How to open accounts in the general ledger.

Why It’s Important You examine the ledger to review how business transactions affect each account. Why It’s Important You examine the ledger to review how business transactions affect each account. Section 1The General Ledger (cont'd.) Key Terms  general ledger  ledger account form Key Terms  general ledger  ledger account form

Setting Up the General Ledger In a manual accounting system, the accounts used by a business are kept on separate pages or cards. These pages or cards are kept together in a book or file called a ledger, which is often called a general ledger. Setting Up the General Ledger In a manual accounting system, the accounts used by a business are kept on separate pages or cards. These pages or cards are kept together in a book or file called a ledger, which is often called a general ledger. Section 1The General Ledger (cont'd.)

Difference between General Ledger and Journalizing? General Ledger shows the balance for each account. The journal shows only the debits and credits for the accounts. Difference between General Ledger and Journalizing? General Ledger shows the balance for each account. The journal shows only the debits and credits for the accounts. Section 1The General Ledger (cont'd.)

The Four-Column Ledger Account Form Section 1The General Ledger (cont'd.)

Opening an Account with a Zero Balance Section 1The General Ledger (cont'd.) (1)Write the account name at the top of the ledger account form (2)Write the account number on the ledger account form.

Opening an Account with a Balance Section 1The General Ledger (cont'd.) (1)Write the account name at the top of the ledger account form. (2)Write the account number on the ledger account form.

Opening an Account with a Balance (cont'd.) Section 1The General Ledger (cont'd.) (3)Enter the complete date (year, month, and day) in the date column. (4)Write the word “Balance” in the Description column.

Opening an Account with a Balance (cont'd.) Section 1The General Ledger (cont'd.) (5)Place a check mark ( ) in the Posting Reference column to show the amount entered on this line is not being posted from a journal. (6)Enter the balance in the appropriate balance column of the ledger account form.

Why? Business managers use accounting records to obtain information about a specific transaction (journal) or need to see an accurate balance of an important account. Why? Business managers use accounting records to obtain information about a specific transaction (journal) or need to see an accurate balance of an important account. Section 1The General Ledger (cont'd.)

Check Your Understanding 1.How many steps involved in opening an account with a zero balance. 2.How many steps involved in opening an account with a balance. 1.How many steps involved in opening an account with a zero balance. 2.How many steps involved in opening an account with a balance. Section 1The General Ledger (cont'd.)