1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 4-3 Completed General Ledger, Proving Cash, and Making Correcting Entries

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Learning Objectives © 2014 Cengage Learning. All Rights Reserved. LO7Analyze incorrect journal entries and prepare correcting entries. LO8Demonstrate how to correct errors made during the posting process.

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 4-3 GENERAL LEDGER WITH POSTING COMPLETED page 102 (continued on next slide)

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 4-3 GENERAL LEDGER WITH POSTING COMPLETED page 103 (continued on next slide)

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 4-3 GENERAL LEDGER WITH POSTING COMPLETED page 103 (continued on next slide)

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 4-3 GENERAL LEDGER WITH POSTING COMPLETED page 104 (continued on next slide)

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 4-3 GENERAL LEDGER WITH POSTING COMPLETED page 104 (continued on next slide)

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 4-3 GENERAL LEDGER WITH POSTING COMPLETED page 105 (continued on next slide)

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 4-3 GENERAL LEDGER WITH POSTING COMPLETED page 105 (continued from previous slide)

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 4-3 PROVING CASH page 106

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Memorandum for a Correcting Entry An incorrect journal entry should be corrected with an additional journal entry, called a correcting entry. SLIDE 11 A memorandum is prepared as the source document describing the correction to be made. LO7 Lesson 4-3

12. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 4-3 MEMORANDUM FOR A CORRECTING ENTRY page 106

13. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 13 LESSON 4-3 November 13. Discovered that a payment of cash for advertising in October was journalized and posted in error as a debit to Miscellaneous Expense instead of Advertising Expense, $140.00. Memorandum No. 15. JOURNAL ENTRY TO RECORD A CORRECTING ENTRY page 107 4 Source Document 3 Credit 1 Date 2 Debit

14. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Correcting an Error in Posting to the Wrong Account SLIDE 14 LO8 Lesson 4-3 1. 1.Draw a line through the entire incorrect entry. 2. 2.Record the posting in the correct account. Recalculate the account balance. 1 1 2 2

15. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Correcting an Incorrect Amount SLIDE 15 1. 1.Draw a line through the incorrect amount. Lesson 4-3 2 2 3. 3.Recalculate the account balance. 2. 2.Write the correct amount just above the incorrect amount in the same space. LO8 1 1 3 3

16. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Correcting an Amount Posted to the Wrong Column SLIDE 16 Lesson 4-3 5 5 4 4 6 6 4. 4. Draw a line through the incorrect item in the account. 6. 6. Recalculate the account balance. 5. 5. Record the posting in the correct amount column. LO8

17. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 4-3 Audit Your Understanding 1.What is a correcting entry? SLIDE 17 ANSWER A journal entry made to correct an error in the ledger Lesson 4-3

18. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 4-3 Audit Your Understanding 2.When is a correcting entry necessary? SLIDE 18 ANSWER When a transaction has been improperly journalized and posted to the ledger Lesson 4-3

19. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 4-3 Audit Your Understanding 3.What are the three steps for correcting an incorrect amount posted to an account? SLIDE 19 ANSWER 1.Draw a line through the incorrect amount. 2.Write the correct amount just above the correction in the same space. 3.Recalculate the account balance. Lesson 4-3

20. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 4-3 Audit Your Understanding 4.What are the three steps for correcting an amount posted to an incorrect column? SLIDE 20 ANSWER 1.Draw a line through the incorrect item in the account. 2.Record the posting in the correct amount column. 3.Recalculate the account balance. Lesson 4-3

21. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 21 LESSON 4-3 TERMS REVIEW proving cash correcting entry page 108