1. Accounting Bellwork 3 rd Hour: What goes in the post reference column of the following: 1.General ledger 2.General journal 3.General ledger with a balance brought forward

2. Susan Rucker October 4, 2015 Bellwork 1.General ledger G for general journal and the page # of the journal. 2.General journal The account # of the ledger entry. 3.General ledger with a balance brought forward A checkmark

3. Section 3Preparing a Trial Balance What You’ll Learn  The purpose of a trial balance.  How to prepare a trial balance.  How to identify and locate trial balance errors. What You’ll Learn  The purpose of a trial balance.  How to prepare a trial balance.  How to identify and locate trial balance errors.

4. Why It’s Important To present accurate financial statements, the accounts must be in balance. The purpose of a trial balance is to prove that the general ledger is in balance. Why It’s Important To present accurate financial statements, the accounts must be in balance. The purpose of a trial balance is to prove that the general ledger is in balance. Section 3Preparing a Trial Balance (con’t.) Key Terms  proving the ledger  trial balance  transposition error Key Terms  proving the ledger  trial balance  transposition error  slide error  correcting entry  slide error  correcting entry

5. The Fifth Step in the Accounting Cycle: The Trial Balance Section 3Preparing a Trial Balance (con’t.)  Adding all the debit and credit balances, then comparing the two totals to see whether they are equal is call proving the ledger.  A formal way to prove that debits equal credits is to prepare a trial balance.  Prepared on two-column accounting stationery.  Account numbers are listed in the far left column.  Adding all the debit and credit balances, then comparing the two totals to see whether they are equal is call proving the ledger.  A formal way to prove that debits equal credits is to prepare a trial balance.  Prepared on two-column accounting stationery.  Account numbers are listed in the far left column.

6. The Fifth Step in the Accounting Cycle: The Trial Balance (con’t.) Section 3Preparing a Trial Balance (con’t.)  Account names are listed in the next column.  Debit balances are entered in the first amount column.  Credit balances are entered in the second amount column.  Account names are listed in the next column.  Debit balances are entered in the first amount column.  Credit balances are entered in the second amount column.

7. The Fifth Step in the Accounting Cycle: The Trial Balance (con’t.) Section 3Preparing a Trial Balance (con’t.) Who What When

8. Section 3Preparing a Trial Balance (con’t.) Finding Errors 1.Add the debit and credit columns again. There may be an adding error. 2.If the difference between columns is 10, 100, or 1000 and so on, you probably made an addition error. 3.If the amount you are out of balance is evenly divisible by 9, you may have a transposition error or a slide error. 1.Add the debit and credit columns again. There may be an adding error. 2.If the difference between columns is 10, 100, or 1000 and so on, you probably made an addition error. 3.If the amount you are out of balance is evenly divisible by 9, you may have a transposition error or a slide error.

9. Section 3Preparing a Trial Balance (con’t.) Finding Errors cont.  Transposition Error:  Occurs when two digits within an amount are accidentally reversed, or transposed.  ie. The amount $325 may have been written as $352.  Transposition Error:  Occurs when two digits within an amount are accidentally reversed, or transposed.  ie. The amount $325 may have been written as $352.

10. Section 3Preparing a Trial Balance (con’t.) Finding Errors cont.  Slide Error:  Occurs when a decimal point is moved by mistake.  ie. The amount $1800 is written as $180 or $18,000.  Slide Error:  Occurs when a decimal point is moved by mistake.  ie. The amount $1800 is written as $180 or $18,000.

11. Section 3Preparing a Trial Balance (con’t.) Correcting Entries  There are three types of errors : 1.Error in a journal entry that is not posted. 2.Error in posting to the ledger when the journal entry is correct. 3.Error in a journal entry that is posted.  There are three types of errors : 1.Error in a journal entry that is not posted. 2.Error in posting to the ledger when the journal entry is correct. 3.Error in a journal entry that is posted.

12. Section 3Preparing a Trial Balance (con’t.)  When an error in a journal entry is discovered after posting, make a correcting entry to fix the error. Correcting Entries cont.

13. Section 3Preparing a Trial Balance (con’t.) Finding Errors cont. 4.Make sure that you have included all of the general ledger accounts in the trial balance. 5.Make sure the amounts are recorded in the correct column. 6.You may have an error in the ledger. 7.Check the general ledger to verify the correct amounts are posted from the journal entries. 4.Make sure that you have included all of the general ledger accounts in the trial balance. 5.Make sure the amounts are recorded in the correct column. 6.You may have an error in the ledger. 7.Check the general ledger to verify the correct amounts are posted from the journal entries.

14. Demonstration Problems 7-4 through 7-6

15. Problem 7-4

17. DeMaria’s Service Center Trial Balance December 31, 20-- 101Cash in Bank 2000-- 105Accounts Receivable – Kevin White 150-- 110Office Equipment 270-- 115Store Equipment 600-- 201Accounts Payable – King Suppliers 140-- 205Accounts Payable – Mancuso Company 100-- 301Donna DeMaria, Capital 2500-- 302Donna DeMaria, Withdrawals 700-- 303Income Summary-- 401Professional Fees 1320-- 501Miscellaneous Expense 40-- 505Rent Expense 300-- 4060-- TOTAL 4060--

18. Problem 7-5

20. TOTAL12,695--12,605-- The difference is $90.00 What types of errors might have occured? Most likely types of errors are transposition and slider errors (since difference is divisible by 9) Other types of errors include omitting an account, making an addition or subtraction error, or incorrectly debiting or crediting records.

22. 2003 Apr. 15Office Supplies 200-- Store Supplies 200-- Memorandum 32 15 Correcting Entry 200-- G10 275-- 106 15 Correcting Entry 200-- G10 300-- 107

23. Check Your Understanding p170 Thinking Critically 1&2 Problems 7-3 and 7-4 Thinking Critically 1&2 Problems 7-3 and 7-4 Section 3Preparing a Trial Balance (con’t.)