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Chapter 5

Posting from a General Journal to a General Ledger

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What is a general journal?Shows each transaction

Review Chapter 4

Does not show all changes to 1 account in 1 place

Need a form to summarize changes to each account

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5.1 Preparing a Chart of Accounts

Includes the debit and credit sides of a T-Account

Also includes Account Name, Transaction Date, Journal Page #

Used to trace a specific entry back to where a transaction is recorded in a journal

Does not include current balancesform now commonly includes a Debit and Credit Balance Column

called a balance-ruled form 3

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Chart of AccountsLedger- a group of accounts

General Ledger- a ledger that contains all accounts needed to prepare financial statements

Included a list of account titles and #

see page 3 for Encore Music (GL)

Accounts arranged in the same order they appear on financial statements

Assets (100); Liabilities (200); Owner’s Equity (300); Revenue (400); Expenses (500)

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Account Numbers

Encore uses 3 digits for account #Digit 1- General ledger division

Digits 2 & 3- location of the account in the general ledger

File Maintenance- procedure for arranging accounts in the GL and keeping current records

Unused account # are assigned to new accounts

Read page 985

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Opening an Account in the GL

Account Title

Account NumberWriting these at the heading of an account is called opening an account

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4.1 Review p. 100

Audit Your Understanding #1-2

Work Together #3-5

On Your Own #6-7

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5.2 Positng from a General Journal to a GL

Posting- transfer info from a journal entry to a ledger

All debits and credits affecting each account are brought to one place

POST REF. columns:an entry in an account can be traced to its source journal

an entry in a journal can be traced to where it is posted in an account

can easily see which entries are posted8

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Posting an Amount to a Debit Column

Post to the correct account in GL

Date in Date Col

Journal Page # in Post Ref Col

Debit amount

Balance Debit

Return to the journal and write the account # in the Post Ref of the General Journal

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Posting from the Credit Column

Date

Journal Page #- Post Ref of GL

Credit Amount

New Credit Balance

Return to journal and write account # in Post Ref Col

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What if the Account Already has a balance?

Date

Journal Page # - in GL Post Ref Col

Debit Amount

New Balance Debits: Add previous balance and New Post

Credit: Subtract previous balance and New Post

Account # - in Journal Post Ref11

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FYI

See page 104 for a Journal Page with Posting Completed

All Post Ref cells are filled with account numbers

Posting will go smoothly if you follow the 5 steps

Last Step- Return to General Journal and put the account number in Post Ref

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4.2 Review- p. 105

Audit Your Understanding #1-2

Work Together #3

On Your Own #4

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5.3 The Completed General Ledger

Look at pgs 106-107After all postings are completed

Questions?

How many journal pages are there?

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Proving Cash

Proving Cash- the amount of cash agrees with the balance of the cash account

Cash can be proved at any timeEncore proves at the end of month

Two balances must equalIn GL and in Checkbook

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Memorandum for a Correcting Entry

Errors can be made in recording transactions

Correcting Entry- a journal entry made to correct an error in the ledger

When an error in a journal entry has already been posted, the incorrect journal entry should be corrected with an additional journal entry

Source Doc- Memorandum

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Journal Entry to Record a Correcting Entry

November 13. Discovered that a payment of cash for advertising in October was journalized and pasted in error as a debit to Miscellaneous Expense instead of Advertising Expense, $120.00. Memorandum 45.

Date?

Debit- Advertising Expense

Credit- Misc Expense

SD- M 45 17

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5.3 Review p. 111

Terms Review

Audit Your Understanding # 1-4

Work Together #5

On Your Own #6

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Chapter Review

Chapter Summary p. 112

Application Problems 5.1-5.3 p. 113

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