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![Page 1: Posting to the General Ledger Chapter 7. Bellringer Think about the process in writing a research paper. Why do we take notes before we write the paper?](https://reader030.fdocuments.in/reader030/viewer/2022033106/56649c755503460f94928b80/html5/thumbnails/1.jpg)
Posting to the General Ledger
Chapter 7
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Bellringer
• Think about the process in writing a research paper. Why do we take notes before we write the paper?
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Enduring Understanding:
• The General Ledger is a permanent record that organizes the details of all business transactions and their accounts.
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Essential Questions
• How do you set up the general ledger?
• How do managers use journals and ledgers?
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What is a General Ledger?How do you set it up?• Permanent record organized by account
number.
• Chart of Accounts:– Assets 100’s– Liabilities 200’s– Owner’s Equity 300’s– Revenues 400’s– Expenses 500’s
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What is a General Ledger?How do you set it up?• The “General Ledger” can be maintained
manually or electronically. (The book that holds each specific ledger account)
• Ledger - each “account” has it’s own page, file or card (All accounts together form the General Ledger).
• Ledger account form – Stationary used to record the specific information about each account.
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Step 1: For Each Account…
Account Name: Cash in Bank (top of page)
Account Number: 101
(on ledger account form)
NOTE: Computerized accounting system similar, still need account name and number at a minimum
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Starting a new page for an Existing Account…
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Account Name: Cash in Bank ACCT #: 101
DateDescriptio
nPost
RefDebit Credit
Balance
Debit Credit
2010 Dec 31 Balance $25,000
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Work on Problem 7-1 Pg 167 in Text and Workbook Pg 94
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What is Posting?
• Fourth step in Accounting Cycle.
• Process of transferring information from the journal to individual general ledger accounts.
• Also known as “ recording”
• Creates a record of impact of business transaction on each account used by the business.
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Why do we post?
• Managers continually use the information from accounting records.
• Can easily find the current balance of a specific account.– Cash Flow – which bills to pay due to short
funds (bad economy)
• Real World Example:
PIC’s cash on hand
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What you already know….
• You know how to analyze a business transaction using the four analytical steps!– Identify– Classify– Increase or Decrease– Balance
• You know the Debits and Credits of Each Transaction
• You know how to Journalize
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Today you will be able to….
• Locate the important information from a journal and move that information to it’s ledger
• Find the current (and ending) balance of each different account throughout an accounting period
• Correctly post each transaction to their appropriate ledger account
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In your Notebooks…
Write a brief statement explaining the importance of Posting to the Ledger
&How it is useful to you as Accountants
(Give an example)
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Please Take out your Packets
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Step 2: Stay Organized….
• Find the similar account transactions first….
• Find it’s important information (date, whether it was debited or credited, and for what amount)
• Lastly …. Post it to it’s ledger
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Date DescriptionPost
Ref Debit Credit
Jan 1 Cash in Bank $25,000
Mrs. Nemec, Capital $25,000
6 Maintenance Expense $5,000
Cash in Bank $5,000
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Take that Information & put it into the “Cash in Bank” Ledger
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Account Name: Cash in Bank ACCT #: 101
Date DescriptionPost
RefDebit Credit
Balance
Debit Credit
Jan 1 G1 $25,000
6 G1 $5,000
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Remember to…
A new account balance is computed each time a transaction is posted to an account.
If you have a Debit Balance– ADD Debits– SUBTRACT Credits
• If you have a Credit Balance– ADD Credits – SUBTRACT Debits
• Lastly…. Find the Ending Balance!
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Date DescriptionPost
RefDebit Credit
Balance
Debit Credit
Jan 1 G1 $25,000 $25,000
6 G1 $5,000 $20,000
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Ending Balance as of January 25
Date DescriptionPost
RefDebit Credit
Balance
Debit Credit
Jan 1 G1 $25,000 $25,000
6 G1 $5,000 $20,000
8 G1 $15,000 $35,000
10 G1 $12,000 $47,000
25 G1 $7,000 $40,000
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Now try it yourselves!!
Complete Problem 7-2 and show it to me when you are finished!
Continue then to work on Problem 7-5