1. Posting from a General Journal to a General Ledger
Chapter 5
Posting from a General Journal to a General Ledger

2. Post amounts from a general journal to a general ledger
OBJECTIVES:
Define accounting terms related to posting from a general journal to a general ledger.
Identify accounting concepts and practices related to posting from a general journal to a general ledger.
Prepare a chart of accounts for a service business organized as a proprietorship
Post amounts from a general journal to a general ledger
Prove cash and journalize correcting entries

3. Preview of the Chapter Now, we’re going to create a LEDGER
Journals alone aren’t practical for businesses
They don’t provide account balances
You’d have to search through PAGES of journals to find total accounts
Now, we’re going to create a LEDGER
Separate form for EACH account!
Preview
Arrange accounts in general ledger
Prepare chart of accounts
Posting to general ledger

4. Accounting Flow Chart
Source Document (transaction)
Journal
Ledger

5. Account form (ledger)
Summarizes in one place all changes to a single item or account.
Includes DR and CR sides
Separate form for each account
Used to trace specific entries to where they are recorded in the journal

6. Two types of Account Formats
Basic account form- does not contain balances
Balance-Ruled - Contains balance columns

7. Ledger A group of accounts There are different types of ledgers.
The General Ledger contains all accounts to prepare financial statements.
Account title – name given to account
Account number – number assigned to an account
determines its classification and order within the classification.

8. Preparing a Chart of Accounts – pg 97
List all accounts by name and number that a business has opened.
They are listed in the same order they appear on financial statements.
Assets are listed in order of liquidity.
How quickly something can be turned into cash
Other classifications are listed alphabetically.

9. Chart of accounts:
ALL accounts will have an account form in the general ledger
Balance Sheet Accounts:
Assets
listed by order of LIQUIDITY
Liabilities
Owner’s Equity
Income Summary – used to close accounts such as expenses and revenue
Temporary account
Income Statement Accounts
Expenses and Revenues
Listed in alphabetical order
Put this in your notes – you will need this LATER

10. CHART OF ACCOUNTS
We will be preparing these soon!

11. Preparing a Chart of Accounts:
Accounts are arranged in same order as they appear on financial statements
5 divisions:
Assets - 100
Liabilities - 200
Owner’s Equity - 300
Revenue - 400
Expenses – 500
Assign 3-digit account number to each account

12. CHART OF ACCOUNTS
Lesson 5-1, page 97

13. File Maintenance
The procedure of arranging accounts in the general ledger, assigning numbers, and keeping accounts current.
A new account is assigned the middle, unused # between the numbers of the existing accounts
EX) may record payments for Gasoline in Misc. Expense
Spend a lot on Gasoline create new account
Gasoline Expense 515
If no longer needed accounts are removed from chart of accounts
EX) Buy the building no need for rent expense
Account number 540 is available for use
New account added at end of ledger division next number in sequence is used
Ex ) Add Water Expense account
New account # 570 is assigned
Some companies may need to use more than 3 digits with more accounts

14. Questions????
Look at chart of accounts on page 97
What account number would be assigned to a new account Car Expense?
Where would it be listed???
What account numbers would be assigned to:
Automobile Expense
Accounts Payable – Trent Supplies
Accounts Receivable – Sarasota Day Care

15. Opening an Account in the General Ledger
Definition: Writing the account title and number on the heading of an account
Open and arrange them in same order as chart of accounts
STEPS:
Writing the account title Cash
Writing the account number 110

16. OPENING AN ACCOUNT IN A GENERAL LEDGER1 2
1. Write the account title.
2. Write the account number.
Lesson 5-1, page 99

17. TO DO:
Work Together, pg 100
On your own, pg 100

18. Posting an Amount from the Debit Column of a General Journal
CHAPTER 5-2
Posting an Amount from the Debit Column of a General Journal

19. A COMPLETED JOURNAL PAGE
Lesson 5-1 (GJ)
4/22/2017
A COMPLETED JOURNAL PAGE
What would you have to do to determine how much cash the business has midway through the entries?
Lesson 4-4, page 82

20. Posting
Transferring the information from the journal to the ledger account.
Sorts journal entries so that all DEBITS and CREDITS affecting one account are brought together in ONE place

21. Purpose of Post Reference Number
To trace the entry from the ledger to the journal page
To trace the entry from the journal to the ledger account
Accountant can tell which entries are posted and which still need to be posted
A blank in Post Ref. column indicates that posting still needs to be completed
Posting reference is ALWAYS recorded in the journal as the last step in the posting procedure!!!!

22. Steps in Posting
Date in date column
Page number from journal in the post reference column of ledger
letter G is abbreviation for General Journal
Amount
Calculate new balance
Ledger account number in post reference column of journal (ALWAYS LAST!!!!!)

23. Posting Debits/Credit
Debits are posted as debits
Credits are posted as credits.
IF Debit amount exceeds Credit amount Debit Balance
IF Credit amount exceeds Debit amount Credit Balance
In finding a new balance like amounts are added.
If the balance of the account is a debit and you post a debit, the amount is added.
If the balance of the account is a credit and you post a debit, the amount is subtracted.

24. POSTING AN AMOUNT FROM THE DEBIT COLUMN OF A GENERAL JOURNAL
Lesson 5-1 (GJ)
4/22/2017
POSTING AN AMOUNT FROM THE DEBIT COLUMN OF A GENERAL JOURNAL 2 1 3 5 4
1. Write the date.
4. Write new account balance.
2. Write journal page number.
5. Write the account number in the Post. Ref. column of the journal.
3. Write the debit amount.
Lesson 5-2, page 101

25. POSTING AN AMOUNT FROM A CREDIT COLUMN OF A GENERAL JOURNAL2 1 5 3 4
1. Write the date.
2. Write the journal page number.
3. Write the credit amount.
4. Write the new account balance.
5. Write the account number in the Post. Ref. column of the journal.
Lesson 5-2, page 102

26. POSTING A DEBIT AMOUNT TO AN ACCOUNT WITH A BALANCE
1. Write the date. 2
2. Write the journal page number. 1
3. Write the debit amount. 3 5
4. Write the new account balance.
5. Write the account number in the Post. Ref. column of the journal. 4
Lesson 5-2, page 103

27. Posting a DEBIT amount to an account with a CREDIT balance
Previous CREDIT Balance $ CR
– Debit column amount DR
= NEW CREDIT balance CR

28. REVIEW:
What is file maintenance?
What is Chart of Accounts?
How are accounts listed in the chart of accounts?
What are the number classifications of the following FIVE types of accounts?
Why do we post journal entries?
$2000 DR, $1500 DR = _______ balance
$5000 CR, $2000 DR = __________ balance
$900 DR, $200 CR = ____________ balance
How do you open a ledger account?
What is the LAST step in posting?

29. TO DO:
Work, pg 105
On your own, pg 105
App 5-1, 5-2 pg 113

30. Completed General Ledger Proving Cash, and Making Correct Entries
Chapter 5-3:
Completed General Ledger
Proving Cash, and Making Correct Entries
Page – completed general ledger with posting completed

31. Chapter 5-3: Completed General Ledger, Proving Cash, and Making Correcting Entries
General Ledger with a Posting Completed – PAGE
QUESTIONS:
On what journal pages would you find the supply accounts entries?
Does Accounts payable – Ling Music have a Debit or Credit balance?
How many accounts have Credit Balances? Debit Balances?
Which Transactions took place on August 31?

32. Proving Cash
This determines that the amount of cash on hand agrees with the accounting records.
Can be proved any time – ALWAYS END OF MONTH
Three places Cash Balance Must Agree
Checkbook
Cash Account
Ledgers and Journals

33. Cash balance in check book=Cash balance in cash account CASH IS PROVED
Lesson 5-1 (GJ)
4/22/2017
PROVING CASH
Cash balance in check book=Cash balance in cash account CASH IS PROVED
***What might have to be done if 2 amounts did not agree????
Lesson 5-3, page 109

34. Memorandum for a Correcting Entry
Simple errors can be corrected by ruling through item
BUT when error in journal is posted to the ledger incorrect journal entry should be corrected with additional journal entry
Correcting Entry: journal entry made to correct an error in the ledger
If accountin error is discovered memorandum is prepared describing correction to be made
Memo becomes source document for correcting entry

35. MEMORANDUM FOR A CORRECTING ENTRY
Lesson 5-3, page 109

36. JOURNAL ENTRY TO RECORD A CORRECTING ENTRY
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. 45.
Miscellaneous Expense
Advertising Expense
1. Which accounts are affected?
Advertising Expense
Miscellaneous Expense
120.00
2. How is each account classified?
Advertising Expense is an expense account.
Miscellaneous Expense is an expense account.
3. How is each classification changed?
120.00
Lesson 5-3, page 110

37. JOURNAL ENTRY TO RECORD A CORRECTING ENTRY2 1 3 4
1. Write the date.
2. Debit Advertising Expense.
3. Credit Miscellaneous Expense.
4. Write the source document number.
Lesson 5-3, page 110

38. TO DO:
Work Together, pg 111
On your own, pg 111
App 5-3

39. Ch. 5 Quiz Mastery 5-4 – pg 114 Extra Problem 5-1 Ch. 5 Study Guide
Ch 5 Summary:
Ch. 5 Quiz
Mastery 5-4 – pg 114
Extra Problem 5-1
Ch. 5 Study Guide