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ENTRIES TO Chapter 7
GENERAL LEDGER
ACCOUNTS
POSTING JOURNAL ENTRIES TO
GENERAL LEDGER ACCOUNTS
What Youll Learn:
Describe the steps in the posting process.
Post general journal entries.
The steps involved in the preparation of a trial balance.
How to find and correct errors in a trial balance.
Record correcting entries in the general journal.
Define the accounting terms introduced in this chapter.
THE GENERAL LEDGER
Main Idea
The general ledger is a permanent record organized by account
number.
Key Terms
posting
general ledger
ledger account forms
THE GENERAL LEDGER
Step 4: Posting
Information in a journal entry is posted to the general ledger to
provide a clear picture of how a business transaction changes
an accounts balance.
THE GENERAL LEDGER
Post Balance
Date Description Ref. Debit Credit Debit Credit
2
Post Balance
Date Description Ref.
Debit Credit Debit Credit
Post Balance
Date Description Ref. Debit Credit Debit Credit
These three General Ledger accounts are the first three asset accounts on
Roadrunners chart of accounts (pg. 79)
THE GENERAL LEDGER
Post Balance
Date Description Debit Credit
Ref. Debit Credit
3 20--
5 6
Oct. 31 Balance 4 21 1 2 5 00
DO THE MATH
Key Terms
posting
The process of transferring information from the journal to
individual general ledger accounts.
general ledger
A permanent record organized by account number.
ledger account form
The accounting stationery used to record financial
information about specific accounts.
7.2 THE POSTING
PROCESS
THE POSTING PROCESS
Main Idea
Posting is the process of transferring information from the
journal to individual accounts in the ledger.
Posting Transactions
Journal entries do not show a clear picture of how a business
transaction changes an accounts balance.
All the entries posted in these accounts came from what page
of the general journal?
Page 1
Green Company paid its account due on Oct. 14. Why is the line
drawn in the Debit column of this account?
This account has a normal debit balance
7-2
Account balances:
Cash in Bank $10,000, Debit
David Serlo, Capital $10,000, Credit
7.2 REVIEW
Post Balance
Date Description Debit Credit
Ref. Debit Credit
20--
Oct. 1 Balance 15 5 3 0 00
14 G2 2 4 2 1 00
$13,109
7.3 PREPARING A TRIAL
BALANCE
PREPARING A TRIAL BALANCE
Main Idea
To learn how to create a trial balance and correct mistakes that
are made in the general ledger.
Key Terms
proving the ledger
trial balance
transposition error
slide error
correcting entry
PREPARING A TRIAL BALANCE
If the totals are equal, the trial balance is in balance. If they are
not, try adding the columns up again. If there is still a mistake,
it must be corrected.
PREPARING A TRIAL BALANCE
Finding an Error
If there is an error, one possibility may be that two numbers
were reversed when recording the information from the journal,
called a transposition error.
Finding an Error
Moving a decimal point by mistake is called a slide error. An
example is if you were to write $25,000 instead of $2,500.
Correcting Entries
If a mistake is made, it will have to be corrected with a
correcting entry.
These are made after the journal entry has been posted, and
should never be erased.
Figure 7-11
Since the debit part of the entry was incorrectly posted to
Maintenance Expense originally, is this account debited or
credited in the correcting entry?
Credited
Figure 7-12
What would be the resulting balance after the correcting entry
has been made?
0
PREPARING A TRIAL BALANCE
Do the Math
Line 1: slide
Line 2: omission
Line 3: transposition
Line 4: transposition
Line 5: no error
Line 6: omission
Problem 7-3
May 20: Debit Of fice Equipment $1 ,500; Credit Computer
Equipment $1 ,500; Memo. 47
Problem 7-4
July 7: Debit Advertising Expense $300; Credit Rent Expense
$300; Memo. 13
PREPARING A TRIAL BALANCE
Question 1
You have just completed a trial balance and the columns are not
equal. List the steps that you would use to find the error.
REVIEW
Answer 1
Step 1: Check the addition in each column.
Step 2: Find the difference between the amounts in the Debit and
Credit columns. If the difference is 10, 100, etc., you
probably have made an addition error.
Step 3: If the difference found in Step 2 is divisible by 9, you
probably have made a slide or transposition error.
Step 4: Check to see whether any of the general ledger accounts
has a balance equal to the difference found in Step 2.
REVIEW
Answer 1
Step 5: Check to see whether any of the general ledger accounts
has a balance equal to one-half of the difference. This
would indicate that you may have moved a debit balance
to the credit side of the trial balance or vice versa.
Step 6: Check the accuracy of the general ledger accounts by
recalculating the balances.
Step 7: Check the individual postings from the general journal to
the general ledger to make sure you have correctly posted
the amounts and posted debits as debits and credits as
credits.
REVIEW
Question 2
Is it possible to have amounts in both the Debit and Credit
balance columns of a four -column ledger account?
Question 3
Revenue: $18,000
Cash in Bank: $25,350
Mi Lee, Capital: $17,450
Salaries Expense: $10,100
What are the totals of the debit and credit columns of the trial
balance?
$35,450