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Chapter 7

Chapter 7. Posting. The T Account. Simplified version of ledger account Includes: Account name Debits Credits Dates of transactions Final account total. Accounts Payable. 386 May 3. June 15 386. 275 Aug. 14. 386. 661. 275. 7.1. Balance Column Account.

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Chapter 7

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  1. Chapter 7 Posting

  2. The T Account • Simplified version of ledger account • Includes: • Account name • Debits • Credits • Dates of transactions • Final account total Accounts Payable 386 May 3 June 15 386 275 Aug. 14 386 661 275 7.1

  3. Balance Column Account • Same information as T-account Accounts Payable 386 May 3 June 15 386 275 Aug. 14 386 661 275 7.1

  4. Balance Column Account • Running account total recorded in a third column rather than at the bottom 386 661 275 7.1

  5. Balance Column Account • Account balance indicated as Debit or credit in DR. CR. column 7.1

  6. The Accounting Cycle Record in Journal Transactions occur Post in Ledger Trial Balance Balance Sheet Income Statement 7.1

  7. Posting 6 Steps: Recording journal entries in the ledger • Go to correct ledger page for account • Record date of transaction • Record page number of Journal in Posting Reference (PR) column • Record amount in Debit or Credit column • Calculate new account balance and record if balance is DR. or CR. • Go back to journal and record ledger account in the Posting Reference column (PR) 7.1

  8. Cross Referencing • Recording the journal page number in the ledger account • Recording the Account number in the journal entry • Why? • Trace back to source • Entries can be followed • Easy to tell where you left off 7.1

  9. Most Common Errors • The DR. CR. Column • Identifies if the BALANCE of the account is a Dr or Cr • NOT related to the transaction • Recording PR out of order • Do not record all the PRs first or last • As each journal entry is posted the PR is recorded • Posting All of one Account • Must do each journal entry one line at a timeor it will NOT BALANCE 7.1

  10. 7.1 Homework • Page 219 (wb 115-120) • Questions 1-16 • Exercises 1-3 • Exercise 1 calculating account balances • Remember DR/CR is for account balance • Exercise 2 posting (in the workbook only) • Follow the 6 Steps • Exercise 3 forwarding balance to next page (in the workbook only) • see text pg 218 for example 7.1

  11. Trial Balance Out of Balance • Make sure account balances are in the correct column • Find the difference between the totals • Find that value in a transaction • Missed an entry • Divide difference by two and find • Double entry • Difference divisible by 9 • Transposition error (wrote 45 instead of 54) • Difference divisible by 10 • Addition Error (forgot to carry the one) 7.2

  12. 7.2 Homework • Pages 222-226 (wb 120-130) • Exercises 1-4 • Questions 1-12 • Complete Exercise #2 First • Four scenarios solved by the magic number • Exercise 1 hint: • 1 Journal Error • 7 changes to Ledger • 6 changes made to trial balance

  13. Simply Accounting Assignment

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