1. Bell Work, 8/22 Journalize the following transactions:
1. May 8, Received cash for sales $200
2. May 13, Bought supplies on account from Pine Supplies, $400
3. May 30, Sent Pine Supplies a check for $200
LESSON 4-1

2. Lesson 1-4 Preparing a Chart of Accounts
6/23/2018
LESSON 4-1
Preparing a Chart of Accounts

3. Preparing a Chart of Accounts Objectives
Section 4-1
Preparing a Chart of Accounts
Objectives
Define accounting terms related to posting from a journal to a general ledger.
Identify accounting concepts and practices related to posting from a journal to a general ledger.
Prepare a chart of accounts for a service business organized as a proprietorship.
LESSON 4-1

4. Account Form
Review: A journal is a permanent record of the debit and credit parts of each transaction with transactions recorded in chronological order.
If only a journal is used, a business must search through all journal pages to find items affecting a single account balance.
A form is used to summarize in one place all the changes to a single account.
A separate form is used for each account.
LESSON 4-1

5. RELATIONSHIP OF A T ACCOUNT TO AN ACCOUNT FORM
page 91
Balance columns
LESSON 4-1

6. RELATIONSHIP OF A T ACCOUNT TO AN ACCOUNT FORM
An account form is based on and includes the debit and credit sides of the a T account.
This information can be used to trace a specific entry back to where a transaction is recorded in a journal.
Major disadvantage: there is no current, up-to-date account balance is shown.
Because the form has columns for the debit and credit balance, it is often referred to as the balance-ruled account form.
LESSON 4-1

7. CHART OF ACCOUNTS
page 92
LESSON 4-1

8. A ledger is a group of accounts.
CHART OF ACCOUNTS
A ledger is a group of accounts.
A general ledger is a ledger that contains all accounts needed to prepare financial statements.
The number assigned to an account is called an account number.
A list of account titles and numbers showing the location of each account in a ledger is known as a chart of accounts.
LESSON 4-1

9. CHART OF ACCOUNTS
Accounts in a general ledger are arranged in the same order that they appear on financial statements.
TechKnow Consulting’s chart of accounts shows five general ledger divisions:
(1) Assets
(2) Liabilities
(3) Owner’s Equity
(4) Revenue
(5) Expenses
LESSON 4-1

10. ACCOUNT NUMBERS
Typically a three-digit account number is assigned to each account
The first digit of each account number shows the general ledger division in which the account is located.
The second two digits indicate the location of each account within a general ledger division.
LESSON 4-1

11. ACCOUNT NUMBERS
File maintenance is the procedure for arranging all accounts in a general ledger, assigning account numbers, and keeping records current.
Unused account numbers are assigned to new accounts as they are added.
When an account is no longer needed, it is removed from the general ledger and the chart of accounts.
LESSON 4-1

12. OPENING AN ACCOUNT IN A GENERAL LEDGER
page 94 1 2
1. Write the account title.
2. Write the account number.
LESSON 4-1

13. OPENING AN ACCOUNT IN A GENERAL LEDGER
Writing an account title and number on the heading of an account is called opening an account.
A general ledger account is opened for each account listed on a chart of accounts.
LESSON 4-1

14. REVIEW Describe the two parts of an account number
page 95
Describe the two parts of an account number
The first digit indicates in which general ledger division the account is located.
The second and third digits indicate the location of the account within that division.
List the two steps for opening an account.
(1) write the account title in the heading
(2) write the account number in the heading
LESSON 4-1

15. Section 4-1 Problems Work Together 4-1 (p.95) On Your Own 4-1 (p.95)
Application problem 4-1 (p.111)
LESSON 4-1

16. Work Together 4-1
LESSON 4-1

17. Lesson 1-4 Posting Separate Amounts from a Journal to a General Ledger
6/23/2018
LESSON 4-2
Posting Separate Amounts from a Journal to a General Ledger

18. POSTING AN AMOUNT FROM A GENERAL DEBIT COLUMN
page 96 2 1 3 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the debit amount.
LESSON 4-1

19. POSTING AN AMOUNT FROM A GENERAL DEBIT COLUMN
Transferring information from a journal entry to a ledger account is called posting.
Posting sorts journal entries so that all debits and credits affecting each account are brought together.
There are two rules for posting amounts from a journal:
1. Separate amounts in a journal’s general amount columns are posted individually to the account written in the Account Title Column.
2. Separate amounts in a journal’s special columns are not posted individually. (Instead, the special amount column totals are posted to the account named in the heading of the special amount column.)
LESSON 4-1

20. POSTING A SECOND AMOUNT TO AN ACCOUNT
page 97 2 1 3 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the debit amount.
LESSON 4-1

21. POSTING A SECOND AMOUNT TO AN ACCOUNT
The numbers in the post ref. columns of the general ledger account and the journal serve three purposes:
An entry in an account can be traced to its source in a journal.
An entry in a journal can be traced to where it was posted in an account.
If posting is interrupted, the accounting personnel can easily see which entries in the journal still need to be posted.
LESSON 4-1

22. POSTING AN AMOUNT FROM A GENERAL CREDIT COLUMN
page 98 2 1 5 3 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the credit amount.
LESSON 4-1

23. REVIEW
page 99
List the five steps of posting from the general columns of a journal to the general ledger.
(1) write the date, (2) write the journal page number in the post ref., (3) write the amount in the debit or credit column, (4) calculate and write the new account balance in the balance debit or balance credit column, (5) write the account number in the post ref. column of the journal.
Are the totals of the general debit and credit posted? Why or why not?
No. Each separate amount in the general debit and credit columns of a journal is posted to the account written in the Account Title Column.
LESSON 4-1

24. Section 4-2 Problems Work together 4-2 (p.99) On Your Own 4-2 (p.99)
Application Problem 4-2 (p.111)
LESSON 4-1

25. Lesson 1-4 Posting Column Totals from a Journal to a General Ledger
6/23/2018
LESSON 4-3
Posting Column Totals from a Journal to a General Ledger

26. CHECK MARKS SHOW THAT AMOUNTS ARE NOT POSTED
page 100
Check mark indicates that amounts ARE NOT posted individually.
Check mark indicates that general amount column totals ARE NOT posted.
LESSON 4-1

27. POSTING THE TOTAL OF THE SALES CREDIT COLUMN
page 101 2 3 1 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the column total.
LESSON 4-1

28. POSTING THE TOTAL OF THE CASH DEBIT COLUMN
page 102 2 3 1 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the column total.
LESSON 4-1

29. POSTING THE TOTAL OF THE CASH CREDIT COLUMN
page 103 3 2 1 5 4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
5. Return to the journal and write the account number.
3. Write the column total.
LESSON 4-1

30. Completed Accounting Forms and Making Correcting Entries
LESSON 4-4
Completed Accounting Forms and Making Correcting Entries

31. JOURNAL PAGE WITH POSTING COMPLETED
LESSON 4-1

32. MEMORANDUM FOR A CORRECTING ENTRY
page 108
LESSON 4-1

33. Lesson 1-4
6/23/2018
CORRECTING ENTRY
page 109
A transaction may have been improperly journalized and posted to the ledger.
In such case, the incorrect journal entry should be corrected with an additional journal entry called a correcting entry.
If an accounting error is discovered a memorandum is prepared as the source document describing the correction to be made.
LESSON 4-1

34. JOURNAL ENTRY TO RECORD A CORRECTING ENTRY
page 108
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, $ Memorandum No. 15. 1
Date 2
Debit 4
Source Document 3
Credit
LESSON 4-1

35. Section 4-4 Work together 4-4 p. 109 --- on board
1. Bought supplies but recorded it as a debit to prepaid insurance for $60.00.
2. Transaction for rent expense was accidentally recorded as a repair expense for $
On your own 4-4 p.109
Do in groups then we will go over on the board.
Application problem 4-4 p.111
LESSON 4-1