 Unit 3: Chapter 7 Posting  I will take up the answers for Unit 2 Test today after the lesson.  Youtube clip: “General Journal and Ledgers” by MattFishe for people who want to listen to the lesson one more time.  Chapter 7 Quiz on next Tuesday Nov 3

Transactions occur. Entries recorded in journal. Posting from the journal to the ledger accounts. Ledger balance by means of trial balance.

 There are two important books in accounting: General Journal and Ledger.  The General Journal is an ongoing record of all business transactions. It is like diary or journal.  For each account (e.g. Bank, Accounts Receivable, Drawings) there is also an ongoing record  a ledger.  The process of transferring the numbers from the General Journal to the ledger is called POSTING.

 So far, we considered only T account for Ledger.  However, there is a second kind of Ledger called “Balance Column Account”, which has three columns: (similar to T account) 1.Debit column 2.Credit column 3.Balance column (running balance)  BCA shows the account balance after each entry.

Bank

 “P.R.” : Posting Reference number, and this indicates the page number of your journal  “Dr/Cr” : indicates whether the balance is debit balance or credit balance.  “No 101” indicates the account number of Bank account. 

 After the posting has been completed, the P.R. in the General Journal should be the Ledger account number. ** Cross referencing ** -- the ledger references the journal and visa versa. These are the two reasons why we insert P.R. in both GL and BCA: 1.Good for tracing (or auditing) entries between the journal and the ledger 2.Helps you to know what has been posted

5 Steps in the Ledger (Balance Column Account) 1. Turn to page, which contains the particular account in ledger. 2. Record the date on the next line. 3. Record the journal page number in “PR” column. 4. Record the amount in Debit or Credit column. 5. Calculate and enter new account balance and note whether it’s a DR or CR balance.

Last step in the Journal 6. Record the ledger’s account number in the journal.  By doing step 6, you are checking off to show that the journal entry has been posted.  This action is important when finding errors after making trial balance.

 Review Questions #1 to 4 and 6 to 9 (P233)  Exercises #1 and #2 (P233)