1. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 4-1 Preparing a Chart of Accounts

2. CENTURY 21 ACCOUNTING © Thomson/South-Western ACCOUNT FORM In accounting, businesses want to see all changes in a single account in one place. A form is used for each account, which has columns for the debit and credit balance. This is often referred to as a balance-ruled account form 2 LESSON 4-1

3. CENTURY 21 ACCOUNTING © Thomson/South-Western 3 LESSON 4-1 RELATIONSHIP OF A T ACCOUNT TO AN ACCOUNT FORM page 91 Balance columns

4. CENTURY 21 ACCOUNTING © Thomson/South-Western CHART OF ACCOUNTS A group of accounts is called a ledger A ledger that contains all accounts needed to prepare financial statements is called a general ledger The number assigned to an account is called an account number 4 LESSON 4-1

5. CENTURY 21 ACCOUNTING © Thomson/South-Western CHART OF ACCOUNTS A list of account titles and numbers showing the location of each account in a ledger is known as a chart of accounts 5 LESSON 4-1

6. CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 4-1 CHART OF ACCOUNTS page 92

7. CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 4-1 ACCOUNT NUMBERS page 92 1) Assets (100) 2) Liabilities (200) 3) Owner’s Equity (300) 4) Revenue (400) 5) Expenses (500)

8. CENTURY 21 ACCOUNTING © Thomson/South-Western ASSIGNING ACCOUNT NUMBERS Assign account numbers by 10s so new accounts can be added. New accounts are assigned between existing account numbers (110 Cash File maintenance – the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current is called file maintenance. 8 LESSON 4-1

9. CENTURY 21 ACCOUNTING © Thomson/South-Western 9 LESSON 4-1 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. OPENING AN ACCOUNT IN A GENERAL LEDGER page 94 12

10. CENTURY 21 ACCOUNTING © Thomson/South-Western OPENING AN ACCOUNT IN A GENERAL LEDGER Opening an account – writing the account title and number on the heading of an account 10 LESSON 4-1

11. CENTURY 21 ACCOUNTING © Thomson/South-Western 11 LESSON 4-1 TERMS REVIEW ledger general ledger account number file maintenance opening an account page 95