1. Chapter 4 General Journal Accounting 100 Skyline College

2. Objectives u Record transactions in a general journal u Prepare compound journal entries u Post journal entries to general ledger u Correct errors in the journal & ledger u Terminology

3. General Journal u Entries in chronological order. u Called record of original entry. u Minimum of 3 lines/transaction u Debit account on first line. u Credit account on second line. u Explanation on last line.

4. Recording Transactions u Debit entry flush (even) with the left margin. u Credit entry is indented 1/2- inch from the left margin. u Explanation is indented 1-inch from the left margin.

5. Compound Entries u A journal entry that contains: v several debits or several credits u Debits always recorded first u Credits always follow the debits u Total debits must = total credits

6. Ledger Account Form u Four-column account form with balance columns. u Maintains a running balance for each account. u All accounts together are referred to as a ledger.

7. What is Posting? u Copy entries from the general journal to the ledger accounts. u Four steps in the posting process (illustrated on p. 107).

8. Posting Steps ledger  Write the date in the ledger account. ledger  Write the journal page # in the Post Reference column of the ledger. ledger  Write the $ amount in either the Debit or Credit column in the ledger. ledger.  Determine the balance in the ledger. journal  Enter the account # in the Post Reference column of the journal.

9. Correcting Errors u Ruling Method: U sed to correct errors before entry has been posted. u Cross out and enter correct information. u Correcting Entry: Used when amounts have been posted. u An entry is made to correct the error.