1. LESSON 4-1 Preparing a Chart of Accounts
All transactions are recorded in a journal
A journal does not show, in one place, all the changes in a single account
An Account Form is used to summarize in one place all the changes to a single account
A separate Form is used for each account
Ledger – a group of accounts
General Ledger – a ledger that contains all accounts needed to prepare financial statements
Account number – number assigned to an account
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2. RELATIONSHIP OF A T ACCOUNT TO AN ACCOUNT FORM
page 91
Balance columns
Balance – ruled account form
has columns for the debit and credit balance
account balance is calculated and recorded as each entry is recorded in the account

3. CHART OF ACCOUNTS A list of account titles and numbers showing the location of each account in a ledger
page 92
All accounts in the chart of accounts will have an account form in the General Ledger
LESSON 4-1

4. ACCOUNT NUMBERS Divisions Assets = 100
page 92
Divisions
Assets = 100
Assets are listed by order of liquidity
Liabilities = 200
Liabilities are listed in alphabetical order
Owners Equity = 300
Capital , drawing, income summary
Revenue = 400
Sales
Expenses = 500
Expenses are listed in alphabetical order
LESSON 4-1

5. Assigning Account Numbers
The account numbering system is determined by the size and nature of the business
A three-digit account number will be assigned to each account
Initial account numbers are assigned by 10s so new accounts can be added easily
A new account listed between two existing accounts is assigned the middle, unused account number
A new account listed at the end of a section is assigned the next number in the sequence of 10s
File Maintenance – the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
LESSON 4-1

6. Assigning Account Numbers
Example:
510 Advertising Expense
520 Insurance Expense
-Add a new account, Gasoline Expense
510 Advertising Expense
515 Gasoline Expense
520 Insurance Expense
Example:
550 Supplies Expense
560 Utilities Expense
-Add a new account, Water Expense
550 Supplies Expense
560 Utilities Expense
570 Water Expense
LESSON 4-1

7. OPENING AN ACCOUNT IN A GENERAL LEDGER
LESSON 4-1
OPENING AN ACCOUNT IN A GENERAL LEDGER
page 94 1 2
1. Write the account title after the word Account in the heading.
2. Write the account number after the words Account No. in the heading.
LESSON 4-1
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8. TERMS REVIEW ledger general ledger account number file maintenance
page 95
ledger
general ledger
account number
file maintenance
opening an account
LESSON 4-1

9. LESSON 4-2
4/13/2017
LESSON 4-2
Posting – transferring information from a Journal entry to a Ledger account.
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10. POSTING AN AMOUNT FROM THE DEBIT COLUMN OF A GENERAL JOURNAL
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 4-2

11. POSTING AN AMOUNT FROM THE CREDIT COLUMN OF A GENERAL JOURNAL
LESSON 4-2
4/13/2017
POSTING AN AMOUNT FROM THE CREDIT COLUMN OF A GENERAL JOURNAL
page 97 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 4-2
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12. POSTING A DEBIT AMOUNT TO AN ACCOUNT WITH A DEBIT BALANCE
page 98 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 4-2

13. POSTING A DEBIT AMOUNT TO AN ACCOUNT WITH A CREDIT BALANCE
page 99 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 4-2

14. JOURNAL PAGE WITH POSTING COMPLETED
(continued on next slide)
LESSON 4-2

15. JOURNAL PAGE WITH POSTING COMPLETED
LESSON 4-2
4/13/2017
JOURNAL PAGE WITH POSTING COMPLETED
page 100
(continued from previous slide)
LESSON 4-2
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16. TERM REVIEW
page 101
posting
LESSON 4-2

17. Completed General Ledger, Proving Cash, and Making Correcting Entries
LESSON 4-3
4/13/2017
LESSON 4-3
Completed General Ledger, Proving Cash, and Making Correcting Entries
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18. GENERAL LEDGER WITH POSTING COMPLETED
LESSON 4-3
4/13/2017
GENERAL LEDGER WITH POSTING COMPLETED
page 102
(continued on next slide)
LESSON 4-3
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19. GENERAL LEDGER WITH POSTING COMPLETED
page 103
(continued on next slide)
LESSON 4-3

20. GENERAL LEDGER WITH POSTING COMPLETED
page 103
(continued on next slide)
LESSON 4-3

21. GENERAL LEDGER WITH POSTING COMPLETED
page 104
(continued on next slide)
LESSON 4-3

22. GENERAL LEDGER WITH POSTING COMPLETED
page 104
(continued on next slide)
LESSON 4-3

23. GENERAL LEDGER WITH POSTING COMPLETED
page 105
(continued on next slide)
LESSON 4-3

24. GENERAL LEDGER WITH POSTING COMPLETED
page 105
(continued from previous slide)
LESSON 4-3

25. PROVING CASH
page 106
Proving Cash – determining that the amount of cash as shown in the checkbook agrees with the balance of the cash account in the accounting records
LESSON 4-3

26. MEMORANDUM FOR A CORRECTING ENTRY
page 106
Correcting Entry
A journal entry made to correct an error in the ledger
LESSON 4-3

27. JOURNAL ENTRY TO RECORD A CORRECTING ENTRY
page 107
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. 2
Debit 1
Date 4
Source Document 3
Credit
LESSON 4-3

28. TERMS REVIEW
page 108
proving cash
correcting entry
LESSON 4-3