CENTURY 21 ACCOUNTING © Thomson/South-Western

LESSON 4-3LESSON 4-3

Completed General Ledger, Proving Cash, and Making Correcting Entries

Original created by M.C. McLaughlin, Thomson/South-WesternModified by Deborah L. Burns, Johnston County Schools, West Johnston High School

CENTURY 21 ACCOUNTING © Thomson/South-Western

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LESSON 4-3

GENERAL LEDGER WITH POSTING GENERAL LEDGER WITH POSTING COMPLETEDCOMPLETED page 102

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LESSON 4-3

GENERAL LEDGER WITH POSTING GENERAL LEDGER WITH POSTING COMPLETEDCOMPLETED page 103

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LESSON 4-3

GENERAL LEDGER WITH POSTING GENERAL LEDGER WITH POSTING COMPLETEDCOMPLETED page 103

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LESSON 4-3

GENERAL LEDGER WITH POSTING GENERAL LEDGER WITH POSTING COMPLETEDCOMPLETED page 104

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LESSON 4-3

GENERAL LEDGER WITH POSTING GENERAL LEDGER WITH POSTING COMPLETEDCOMPLETED page 104

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LESSON 4-3

GENERAL LEDGER WITH POSTING GENERAL LEDGER WITH POSTING COMPLETEDCOMPLETED page 105

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LESSON 4-3

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LESSON 4-3

PROVING CASHPROVING CASH page 106

Determining that the amount of cash agrees with the balance of the cash account in the accounting records is called proving cash

Businesses always proves cash at the end of a month

If the cash balance as shown in the checkbook equals the cash balance in the cash account, then cash is proved

CENTURY 21 ACCOUNTING © Thomson/South-Western

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LESSON 4-3

MEMORANDUM MEMORANDUM FOR A CORRECTING ENTRYFOR A CORRECTING ENTRY page 106

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

•A journal entry made to correct an error in the ledger is called a correcting entry

•The source document for a correcting entry is the memorandum

CENTURY 21 ACCOUNTING © Thomson/South-Western

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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 JOURNAL ENTRY TO RECORD A CORRECTING ENTRYTO RECORD A CORRECTING ENTRY page 107

44 Source DocumentSource Document

33CreditCredit

11 DateDate22 DebitDebit

CENTURY 21 ACCOUNTING © Thomson/South-Western

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LESSON 4-3

TERMS REVIEWTERMS REVIEW

proving cash correcting entry

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