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CH 7.1 Notes

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22 views

CH 7.1 Notes

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mmdelilah0502
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We take content rights seriously. If you suspect this is your content, claim it here.
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CH 7.

1 Posting Journal Entries to General Ledger Accounts


The General Ledger

Review 9 Step Accounting Cycle

Setting Up the General Ledger


 Creates record of the impact of business transactions on each account
 Four- Column General Ledger Form
 Ledger Account Form – accounting stationary used to record financial information
about specific accounts ( Refer to Figure 7-2 p153)
 The first two columns are used to enter the debit and credit amounts posted from the
general journal
 The last two columns are used to enter the new account balance after a journal entry
is posted
o The type of account determines which column you use
o For example: if the account has a normal “debit” balance, the new balance
would be entered in the debit balance column and if the account has a
normal “credit” balance, the new balance would be entered in the credit
balance column

Opening Accounts in the Ledger


 Before journal entries can be posted, a general ledger account is opened for each of
the accounts listed in the chart of accounts
 Opening an account with a zero balance (Refer to Figure 7-3 p154):
1. Write the account name at the top of the ledger account form
2. Write the account number on the ledger account form
 Opening an account with a balance (Refer to Figure 7-4 p155)
1. Write the account name at the top of the ledger form
2. Write the account number on the ledger account form
3. Enter the complete date (year, month, and day) in the date column
4. Write the word “Balance” in the description column
5. Place a check mark in the Posting Reference column to show the amount entered
on this line is not being posted from a journal
6. Enter the balance in the appropriate balance column of the ledger account form.
assets, expenses and withdrawal have debit balances and liabilities, owner’s
capital and revenue accounts have credit balance
 Usefulness of Journal and Ledger to Managers
o To obtain information about a specific business transaction a manager may refer
to the general journal
o To obtain a current account balance a manger may refer to the general ledger

Corresponding Activities
Problem 7-1 Opening Ledger Accounts (p156 in book)

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