posting from a general journal to a general ledger chapter 4

Posting from a General Journal to a

General LedgerChapter 4

4.1 Preparing a Chart if Accounts

O A journal does not show in one place all of the changes in a single account

O For this reason a separate form is used to summarize in one place all the changes to a single account

O In the general ledger, up-to-date balances must be calculated after every entry.

VocabularyO Ledger is a group of accountsO General ledger is a ledger that

contains all the accounts needed to prepare financial statements

O Account number is the number assigned to an account

O Chart of accounts is a list of account titles and numbers showing the location of each account in a ledger

AccountsO Accounts in the chart of accounts are

listed in the same order as they appear in financial statements: 1)assets, 2)liabilities, 3)owner’s equity, 4)revenue, 5)expenses

O First digit shows the general ledger division

O Second two digits indicate the location within the division

O This business assigns account numbers by 10s so new accounts can be easily added

Opening an AccountO Is a very simple processO Simply write the account name on

the left and the account number on the right

apliaO 4.1 working togetherO 4.1 application

PostingO Transferring information from a journal

entry to a ledger account is called posting

O Numbers in the Post Ref columns serve three purposes:O An entry in an account can be traced to

its sourceO An entry in a journal can be traced to

where it was posted in the accountO If posting is interrupted, one can easily

see where they stopped

ApliaO 4.2 working togetherO 4.2 application

Proving CashO Determining the amount of cash

agrees with the balance of the cash account in the accounting records

O This company proves cash at the end of the month

Correcting entryO This is what you call a journal entry

made to correct an error in the ledger

O If an accounting error is discovered, a memorandum is prepared describing the correction to be made

ApliaO 4.3 Work TogetherO 4.3 ApplicationO 4.4 MasteryO Chapter 4 Study Guide