1. Unit #7 –Posting to the Ledger

2. Unit #7 –Posting to the Ledger
Where we are:
Journalize (Using the General Journal) –Done
Post (To Ledger Accounts – which are also known as T- Accounts) – Now
Trial Balance (Can enter on the Worksheet) - Done
Adjustments (On the worksheet)
Complete the Worksheet
Financial Statements (Income Statement - then the Balance Sheet - Done)
Closing Entries (Closing the Temporary Accounts – Drawings, Revenue, Expenses)

3. Up until now
You have learned:
A = L OE
Normal Bal Dr Cr Cr
To Increase Dr Cr Cr
To Decrease Cr Dr Dr
(You will Dr/Cr Owners Equity (OE) based its effect on Capital)
Notice a Pattern?
These Decrease OE
Capital (+) Cr
These Increase OE
Drawings (-) Dr
Revenue (+) Cr
Expenses (-) Dr
This occurs because Capital has normally a Credit Balance

4. Tarantino Break Dancing Co.
We’ve Learned
Tarantino Break Dancing Co.
 Trial Balance
March 18, 2008 
Accounts
Acc.
No.
Debits
Credits
Cash 
1000 
Receivable. 
  500
Accts. Pay.
300 
Capital
1500 
Sales 
350 
Rent
Expense 
 650
Totals
2150 
 2150
How to do a
trial balance
All the balances of every account are listed as either a Dr or Cr

5. We’ve Learned Financial Statements
1st = Income Statement
Revenue–Expenses
= Net Income (Loss)
2nd = Balance Sheet
Assets, Liabilities, and Owners Equity.
Report Form A = L + OE
Beginning Capital + NI – Drawings = Ending Capital
Need NI to calculate Ending Capital

6. Posting to the General Ledger
Up until this point, we used T-Accounts.
This is where all the transactions from the General Journal get “Posted” to each individual account (Cash, Accounts Payable, Sales, Advertising Expense)….and the list goes on depending on your company!

7. Chart of Accounts
The numbers are used for identification.
Since we are going to be “Posting”, we need to reference all of our accounts.
Assets
Liabilities
Capital (including Drawings)
Revenues
Expenses

8. Chart of Accounts Cont. Assets 100-199 Liabilities 200-299
In order of Liquidity and then Longevity (useful life)
Assets
Liabilities
Capital
Revenues
Expenses
In order of Maturity
Will be only 1 account + drawings
List Core revenues 1st
Alphabetical order

9. Recall from the General Journal!
Notice we’re on Page 1. You’ll need this info later!
Recall from the General Journal!
General Journal 
M. Waheed Lip Syncing 
 Page 1
Date
Particulars
P.R.
Debit
Credit 1
Mar
18 
 Cash
500 2
  Capital, M. Waheed
500  3
Opening Balance. Lip Syncing Company 
This stands for Posting Reference. It is to show you which Chart of Account # match up with
101
301

10. General Ledger This is the Page # of the General Journal
This is your running balance. You update this after every entry
General Ledger
Account: Cash
Date
Particulars
P.R.
Debit
Credit
DR/CR
Balance 1 2 3
General Ledger
K. Dub Lip Singing 
Account: Cash
Date
Particulars
P.R.
Debit
Credit
DR/CR
Balance 1 2 3
Notice these!
Chart of Account #
Opening Entry
Opening Entry Dr
500 J1
500
Mar 18 18 19
Bought Mic. J1
100 Dr

11. Forwarding is the process of continuing an account on the next page by carrying forward all relevant information
General Ledger Cont.
General Ledger
K. Dub Lip Singing 
Account: Capital, K.Dub
Date
Particulars
P.R.
Debit
Credit
DR/CR
Balance 1 2
If you were “Forwarding” , you would type that here.
Mar Opening Bal. J Cr

12. General Ledger Cont. Mar 18 Bought a Mic. J1 100 Dr 100 General Ledger
K. Dub Lip Singing 
Account: Equipment
Date
Particulars
P.R.
Debit
Credit
DR/CR
Balance 1 2
Mar Bought a Mic. J Dr

13. How to spot Potential Errors!
Journalizing Errors
Forget to record transaction
Record entries into wrong accounts
Record entries as incorrect debits or credits
Record the wrong amount or transpose figures (eg. 97 instead of 79)
Analyze transactions incorrectly

14. Potential Errors Cont. Posting Errors from Journal to Ledger
Forget to post the entire transaction
Forget to post either the debit or credit side of the transaction
Post entry to the wrong side of the account
Post entry to the wrong account, correct side
Transposition error

15. Potential Errors Cont. Ledger to Trial Balance
Calculate account balances incorrectly in the Ledger
Forget to transfer account to the Trial Balance
Record wrong amount on the Trial Balance
Record account on wrong side of the Trial Balance
Transposition error

16. Finding Errors Does it balance? Prepare Trial Balance No
Did you find the mistake?
Apply Shortcut Tests No
Did you find the mistake?
Perform Balancing Steps

17. Shortcut Tests Test # 1 Test # 2
Once the difference is calculated, search the Trial Balance, Ledger and Journal for that amount.
Test # 2
If the Trial Balance difference is an even amount, divide by 2 and search Ledger & Journal.

18. Shortcut Tests Cont. Test # 3 Test # 4
If the difference is a multiple of 10, there may be an addition or subtraction error. Calculate Trial Balance & Ledger Accounts again.
Test # 4
If the difference is divisible by 9, the error may be due to a transposition of numbers. Examine Trial Balance, Ledger and Journal.

19. Balancing Steps # 1: Re-add the Trial Balance
# 2: Check transfer of account balances from the Ledger to the Trial Balance.
# 3: Re-add account balances in the Ledger – double check Dr/Cr (indicators)

20. Balancing Steps Cont. # 4: Check Posting from Journal to Ledger
Incorrect Amounts
Amounts not posted
Amounts posted twice
Amounts posted in wrong column
# 5: Check to see each entry in the Journal balances correctly and is analyzed correctly (Dr/Cr)