2. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting The general ledger is a permanent record organized by account number. Posting is the process of transferring information from the journal to individual accounts in the ledger. The trial balance is a proof that total debits equal total credits in the ledger. Glencoe AccountingCopyright © by The McGraw-Hill Companies, Inc. All rights reserved.

3. Glencoe Accounting Explain the purpose of the general ledger. Describe the steps in the posting process. Post general journal entries. Prepare a trial balance. Locate and correct trial balance errors. Record correcting entries in the general journal. Glencoe AccountingCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Key Terms posting general ledger ledger account forms

4. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting WHY a General Ledger The General LedgerSection 7.1 Accounts used by a business are kept on separate pages or cards in a book or file called a ledger. It is important for a number of reasons: This creates a record of the impact of business transactions on each account used by a business. It also helps managers easily find the current balance of a specific account.

5. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting The General LedgerSection 7.1 Posting is the process by which random transactions become organized in a manner according to accounts. transferring information from the journal to individual general ledger accounts.

6. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Setting Up the General Ledger The General LedgerSection 7.1 The general ledger provides up-to-date balances for each account, including accounts payable and receivable. In a computerized system, electronic files are still referred to as a ledger, or the ledger accounts. Managers use ledgers to obtain summarized information. general ledger A permanent record organized by account number. general ledger A permanent record organized by account number.

7. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Debit and credit amounts are posted from journal entries to the first two amount columns. The new account balance is entered in one of the last two amount columns. The type of account determines which balance column to use. Normal Balance Side Asset=Debit Liability=Credit Expense=Debit ledger account forms The accounting stationery used to record financial information about specific accounts. (see pg 168 & 169) ledger account forms The accounting stationery used to record financial information about specific accounts. (see pg 168 & 169)

8. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Setting Up the General Ledger Cash In Bank 101 11/16 Balance 21,125.00 “ ” means that the amount on the line is not being posted from a journal entry. 1 - Example of an existing balance Cash In Bank $21,125.00

9. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting The Fourth Step in the Accounting Cycle: Posting The Posting ProcessSection 7.2 See page 172

10. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting See page 177 General Journal Page 1 DateDescription Post RefDebitCredit 1 2013 2 Oct.1 Cash In Bank 2500 000 3 Crista Vargas, Capital 2500 000 General Ledger Account __Cash in Bank______ Account No. ______101_________ DateDescription Post Ref DebitCredit Balance DebitCredit Account __Crista Vargas, Capital___ Account No. ______301_________ DateDescription Post Ref DebitCredit Balance DebitCredit 2 - Example of posting

11. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting DateDescription Post Ref DebitCredit 1 1031Rent Expense 501 500.00 2 Cash In Bank 500.00 3 Check 131 4 111Maintenance Expense 505 125.00 5 Cash In Bank 125.00 6 Check 132 3 - Example of posting when there is an existing balance Post the 10/31 & 11/01 transaction to Cash In Bank General Ledger Account __Cash in Bank______ Account No. ______101_________ DateDescription Post Ref DebitCredit Balance DebitCredit 2015 Oct1 G1 25,000.00

12. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Account __Accounts Receivable – Green Co.__ Account No. ___105___ DateDescription Post Ref DebitCredit Balance DebitCredit 2015 Oct11 G1 200.00 General Journal Page 1 DateDescription Post RefDebitCredit 1 2013 2 Oct.14 Cash In Bank 20 000 3 Accounts Rec – Green Co. 20 000 Receipt 458 4 - Example of a ledger account with a zero balance