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Preparing a Chart of Accounts
LESSON 4-1
General Journal (Chapter 3)
• What does a General Journal accomplish in Accounting?
• What is a General Journal?
LESSON 4-1 2
General Journal (Chapter 3)
• General Journal• -Is a permanent record of the debit and credit
parts of each transaction recorded in chronological order
• However, a journal does not show in one place all the changes in a single account
LESSON 4-1 3
RELATIONSHIP OF A T ACCOUNT TO AN ACCOUNT FORM
LESSON 4-1 4
page 91
Balance columns
Chart of Accounts
• A group of accounts is called a ledger. • • A ledger contains all accounts needed to prepare
financial statements is called a general ledger. • • The name given to an account is known as an
account title. The number assigned to an account is called an account number.
LESSON 4-1 5
CHART OF ACCOUNTS
LESSON 4-1 6
page 92
Account numbers
150 Supplies 1-The first digit of each account number shows the general ledger division in which the account is located. Represents the general ledger (1’s are associated with the asset division)
50-The second digits indicate the location of each account within a general ledger division. The 50 in the account number for Supplies indicate that the account is located between account number 140 and 160.
(1)Assets (2) Liabilities (3) Owner’s Equity (4) Revenue (5) Expenses (2)Balance Sheet Accounts-Assets, Liabilities, Owner’s Equity(3)Income Statement Accounts-Revenue and Expenses
LESSON 4-1 7
ACCOUNT NUMBERS
LESSON 4-1 8
page 92
Assigning account numbers
TechKnow consulting assigned numbers by 10’s (Ex. 110-120-130). Numbers (111-119) are not used. New numbers can be assigned between existing accounts. The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current is called file maintenance.
LESSON 4-1 9
Opening an account in a general ledger
• Writing an account title and number on the heading of an account is called opening an account.
• A general ledger account is opened for each account listed on a chart of accounts.
LESSON 4-1 10
OPENING AN ACCOUNT IN A GENERAL LEDGER
LESSON 4-1 11
1. Write the account title after the word Account in the heading.
2. Write the account number after the words Account No. in the heading.
page 94
11 22
TERMS REVIEW
• ledger• general ledger• account number• file maintenance• opening an account
LESSON 4-1 12
page 95
LESSON 4-2
Posting from a General Journal to a General Ledger
Posting
Transferring information from a journal entry to a ledger account
LESSON 4-1 14
15 LESSON 4-2
1. Write the date. 4. Write the new account balance.
2. Write the journal page number.
3. Write the debit amount.
5. Return to the journal and write the account number.
POSTING AN AMOUNT FROM THE DEBIT COLUMN OF A GENERAL JOURNAL
page 96
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16 LESSON 4-2
POSTING AN AMOUNT FROM THE CREDIT COLUMN OF A GENERAL
JOURNALpage 97
11
1. Write the date. 4. Write the new account balance.
2. Write the journal page number.
3. Write the credit amount.
5. Return to the journal and write the account number.
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17 LESSON 4-2
POSTING A DEBIT AMOUNT TO AN ACCOUNT WITH A DEBIT BALANCE
page 98
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1. Write the date. 4. Write the new account balance.
2. Write the journal page number.
3. Write the debit amount.
5. Return to the journal and write the account number.
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18 LESSON 4-2
POSTING A DEBIT AMOUNT TO AN ACCOUNT WITH A CREDIT BALANCE
page 99
1. Write the date. 4. Write the new account balance.
2. Write the journal page number.
3. Write the debit amount.
5. Return to the journal and write the account number.
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19 LESSON 4-2
JOURNAL PAGE WITH POSTING COMPLETED
(continued on next slide)
page 100
20 LESSON 4-2
JOURNAL PAGE WITH POSTING COMPLETED
page 100
(continued from previous slide)
21 LESSON 4-2
TERM REVIEW
• posting
page 101
LESSON 4-3Completed General Ledger, Proving Cash, and Making Correcting
Entries
23 LESSON 4-3
GENERAL LEDGER WITH POSTING COMPLETED
page 102
(continued on next slide)
24 LESSON 4-3
GENERAL LEDGER WITH POSTING COMPLETED
page 103
(continued on next slide)
25 LESSON 4-3
GENERAL LEDGER WITH POSTING COMPLETED
page 103
(continued on next slide)
26 LESSON 4-3
GENERAL LEDGER WITH POSTING COMPLETED
page 104
(continued on next slide)
27 LESSON 4-3
GENERAL LEDGER WITH POSTING COMPLETED
page 104
(continued on next slide)
28 LESSON 4-3
GENERAL LEDGER WITH POSTING COMPLETED
page 105
(continued on next slide)
29 LESSON 4-3
GENERAL LEDGER WITH POSTING COMPLETED
page 105
(continued from previous slide)
30 LESSON 4-3
PROVING CASH page 106
Determining the amount of cash agrees with the balance of the cash account in the accounting records is called proving cash.
Balance shown in a checkbook compared with the balance in the cash account.
Correcting Entry
A journal entry made to correct an error in the ledger is called a correcting entry.
LESSON 4-1 31
32 LESSON 4-3
MEMORANDUM FOR A CORRECTING ENTRY
page 106
33 LESSON 4-3
November 13. Discovered that a payment of cash for advertising in October was journalized and posted in error as a debit to Miscellaneous Expense instead of Advertising Expense, $140.00. Memorandum No. 15.
JOURNAL ENTRY TO RECORD A CORRECTING ENTRY
page 107
44 Source DocumentSource Document
33CreditCredit
11 DateDate22 DebitDebit
34 LESSON 4-3
TERMS REVIEW
• proving cash• correcting entry
page 108
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