Transcript Chapter 4 PowerPoint.ppt

Chapter 4
Objectives:
•Define accounting terms related to posting from a general
journal to a general ledger
•Identify accounting concepts and practices related to posting
from a general journal to a general ledger
•Prepare a chart of accounts for a service business organized
as a proprietorship
•Post amounts from a general journal to a general ledger
•Prove cash
•Analyze and journalize correcting entries
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-1
Preparing a Chart of Accounts
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
3
RELATIONSHIP OF A T ACCOUNT
TO AN ACCOUNT FORM
page 91
Balance columns
This form is referred to as the balance-ruled account form. The
benefit of using the balance-ruled account form is that an up-todate account balance is always available.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-1
4
CHART OF ACCOUNTS
page 92
•A group of accounts is called a ledger.
•A ledger that 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.
•A list of account titles and numbers showing the location of each
account in a ledger is known as a chart of accounts.
•A chart of accounts shows five general ledger divisions: (1)
Assets, (2) Liabilities, (3) Owner’s Equity, (4) Revenue, and (5)
Expenses.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-1
5
CHART OF ACCOUNTS
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 92
LESSON 4-1
6
ACCOUNT NUMBERS
page 92
•The procedure for arranging accounts in a general ledger, assigning account
numbers, and keeping records current is called file maintenance.
•The account numbering system is determined by the size and nature of the
business.
•A new account listed between two existing accounts is assigned the middle,
unused account number between the numbers of the existing accounts.
•A new account listed at the end of a section is assigned the next number in
the sequence of 10s.
•Expenses are listed in alphabetical order.
•Assets are listed in order by their liquidity.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-1
7
OPENING AN ACCOUNT
IN A GENERAL LEDGER
page 94
2
1
Writing an account title and number on the heading of an account is
called opening an account.
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.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-1
8
OPENING AN ACCOUNT
IN A GENERAL LEDGER
page 94
2
1
•General ledger accounts must be opened before they can be used.
•Each account is kept on a separate card.
•Ledger cards are kept in chart of accounts number order.
•A new card can be easily inserted for a new account.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-1
Lesson 4-1
Log on to Aplia and let’s do Work
Together 4-1 on textbook page 95
and On Your Own 4-1 on textbook
page 95.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-2
Posting from a General Journal to a
General Ledger
Transferring information from a
journal entry to a ledger account is
called posting.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
11
POSTING AN AMOUNT FROM THE DEBIT
COLUMN OF A GENERAL JOURNAL
page 96
2
5
1
3
4
1. Write the date.
2. Write the journal page number.
3. Write the debit amount.
4. Write the new account balance.
5. Return to the journal and write
the account number.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-2
12
POSTING AN AMOUNT FROM THE CREDIT
page 97
COLUMN OF A GENERAL JOURNAL
2
5
1
3
4
1. Write the date.
2. Write the journal page number.
3. Write the credit amount.
4. Write the new account balance.
5. Return to the journal and write
the account number.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-2
13
POSTING A DEBIT AMOUNT TO AN
ACCOUNT WITH A DEBIT BALANCE
page 98
2
5
3
1
4
1. Write the date.
2. Write the journal page number.
3. Write the debit amount.
4. Write the new account balance.
5. Return to the journal and write
the account number.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-2
14
POSTING A DEBIT AMOUNT TO AN
ACCOUNT WITH A CREDIT BALANCE
page 99
2
5
3
1
4
1. Write the date.
2. Write the journal page number.
3. Write the debit amount.
4. Write the new account balance.
5. Return to the journal and write
the account number.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-2
15
JOURNAL PAGE WITH POSTING
COMPLETED
page 100
Notice that the Post. Ref. Column has an entry for every line of
the journal.
(continued on next slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-2
16
JOURNAL PAGE WITH POSTING
COMPLETED
page 100
(continued from previous slide)
Notice that the Post. Ref. Column has an entry for every line of the
journal.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-2
17
Lesson 4-2
Log on to Aplia and let’s do Work
Together 4-2 on textbook page 101 and
On Your Own 4-2 on textbook page
101.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-1
LESSON 4-3
Completed General
Ledger, Proving Cash, and
Making Correcting Entries
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
19
GENERAL LEDGER WITH POSTING
COMPLETED
page 102
(continued on next slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
20
GENERAL LEDGER WITH POSTING
COMPLETED
page 103
(continued on next slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
21
GENERAL LEDGER WITH POSTING
COMPLETED
page 103
(continued on next slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
22
GENERAL LEDGER WITH POSTING
COMPLETED
page 104
(continued on next slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
23
GENERAL LEDGER WITH POSTING
COMPLETED
page 104
(continued on next slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
24
GENERAL LEDGER WITH POSTING
COMPLETED
page 105
(continued on next slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
25
GENERAL LEDGER WITH POSTING
COMPLETED
page 105
(continued from previous slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
26
PROVING 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. To prove cash, you should compare the cash balance as
shown in the checkbook with the cash balance in the cash
account. If the two balances equal, cash is proved.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
27
MEMORANDUM
FOR 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. If an accounting error is
discovered, a memorandum is prepared describing the
correction to be made.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
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JOURNAL ENTRY
TO RECORD A CORRECTING ENTRY
page 107
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.
1
2
Date
4
Credit
Debit
Source Document
3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-3
Lesson 4-3
Log on to Aplia and do Work
Together 4-3 on textbook page 108
and On Your Own 4-3 on textbook
page 108.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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Chapter 4 Assignments
Study Guide (on Aplia)
Problems: 4-1, 4-2, 4-3, 4-4, 45, and Using Source
Documents (all on Aplia)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 4-1