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BAF3M Accounting

BAF3M Accounting. Chapter 7 – Posting. 7.1 Posting. You now know both the ledger and the journal, but now it’s time to use them more ‘formally’ as accountants do 7.1 is a relatively large subsection … Balance column account Opening an account Steps in the Posting process Cross-Referencing

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BAF3M Accounting

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  1. BAF3M Accounting Chapter 7 – Posting

  2. 7.1 Posting • You now know both the ledger and the journal, but now it’s time to use them more ‘formally’ as accountants do • 7.1 is a relatively large subsection … • Balance column account • Opening an account • Steps in the Posting process • Cross-Referencing • Correcting Errors • Forwarding Procedure

  3. 7.1 Posting Page 228 • The Balance Column Account • Has three money columns • One for Debits • One for Credits • One for the Balance

  4. 7.1 Posting • Opening an Account  preparing an account page and placing it in its proper place in the ledger

  5. 7.1 Posting • Formal Posting • “POSTING”  the process of transferring information from the journal to the ledger • 6 step process • 5 steps in ledger, 1 in journal

  6. 7.1 Posting • Turn to proper account in ledger • Record date. Use the next unused line in the account • Record the page number of the journal in the Posting Reference (PR) column of the account. Write the letter “J” in front of the page number (ex “J14”) Cont 

  7. 7.1 Posting 4) Record the amount. Debit amounts go in debit column, credit amounts in credit column 5) Calculate and enter the new account balance in the balance column, indicate whether it is a debit or credit balance in the DR/CR column 6) In the journal: record the account number to which the posting was made in the PR column on the same line as the amount being posted

  8. 7.1 Posting • The orange-bordered slides that follow are a nice animation of the posting process, as produced by the textbook manufacturer

  9. PostingAccounting data in this journal entry has not yet been transferred to the ledger. Chapter 7 – Posting l Accounting 1, 7th Edition

  10. PostingTurn to the proper accounts in the ledger: Office Furniture, Chapter 7 – Posting l Accounting 1, 7th Edition

  11. PostingTurn to the proper accounts in the ledger: Office Furniture, Bank, Chapter 7 – Posting l Accounting 1, 7th Edition

  12. PostingTurn to the proper accounts in the ledger: Office Furniture, Bank, and Accounts Payable—Office Supply Company. Chapter 7 – Posting l Accounting 1, 7th Edition

  13. PostingStep 1: Record the date. Chapter 7 – Posting l Accounting 1, 7th Edition

  14. PostingStep 2: Record the page number where the transaction was journalized. Chapter 7 – Posting l Accounting 1, 7th Edition

  15. PostingStep 3: Record the amount. Be sure to post debits in the debit column and credits in the credit column. Chapter 7 – Posting l Accounting 1, 7th Edition

  16. PostingStep 4: Calculate the new account balance and identify it as either debit (Dr) or credit (Cr). Chapter 7 – Posting l Accounting 1, 7th Edition

  17. PostingStep 5: Enter the new balance. Chapter 7 – Posting l Accounting 1, 7th Edition

  18. PostingStep 6: Record the account number in the journal’s P.R. column. This is your proof of posting and must always be the final step. Chapter 7 – Posting l Accounting 1, 7th Edition

  19. PostingNext entry.Step 1: Record the date. Chapter 7 – Posting l Accounting 1, 7th Edition

  20. PostingStep 2: Record the page number where the transaction was journalized. Chapter 7 – Posting l Accounting 1, 7th Edition

  21. PostingStep 3: Record the amount. Be sure to post debits in the debit column and credits in the credit column. Chapter 7 – Posting l Accounting 1, 7th Edition

  22. PostingStep 4: Calculate the new account balance and identify it as either debit (Dr) or credit (Cr). Chapter 7 – Posting l Accounting 1, 7th Edition

  23. PostingStep 5: Enter the new balance. Chapter 7 – Posting l Accounting 1, 7th Edition

  24. PostingStep 6: Record the account number in the journal’s P.R. column. This is your proof of posting and must always be the final step. Chapter 7 – Posting l Accounting 1, 7th Edition

  25. PostingNext entry.Step 1: Record the date. Chapter 7 – Posting l Accounting 1, 7th Edition

  26. PostingStep 2: Record the page number where the transaction was journalized. Chapter 7 – Posting l Accounting 1, 7th Edition

  27. PostingStep 3: Record the amount. Be sure to post debits in the debit column and credits in the credit column. Chapter 7 – Posting l Accounting 1, 7th Edition

  28. PostingStep 4: Calculate the new account balance and identify it as either debit (Dr) or credit (Cr). Chapter 7 – Posting l Accounting 1, 7th Edition

  29. PostingStep 5: Enter the new balance. Chapter 7 – Posting l Accounting 1, 7th Edition

  30. PostingStep 6: Record the account number in the journal’s P.R. column. This is your proof of posting and must always be the final step. Chapter 7 – Posting l Accounting 1, 7th Edition

  31. 7.1 Posting • Cross Referencing • The recording of the journal page number in the account and the recording of the account number in the journal • Three reasons: • Account entries can be traced back to the journal • Journal entries can be traced to their accounts • If the posting process is interrupted it is easy to tell where to begin again

  32. 7.1 Posting • Correcting Errors in the Books • Accounts don’t just “erase”  suspicion • So other methods have been developed • Two types: • Errors found Immediately • Errors found Later

  33. 7.1 Posting • Errors Found Later • Usually requires an offsetting entry • This entry is called a correcting journal entry, its purpose is to cancel the effect of an error

  34. 7.1 Posting • Forwarding Procedure • Forwarding is just the process of continuing and account or journal on a new page by carrying forward the date and the balance from the completed page

  35. 7.2 Trial Balance Out of Balance • If your trial balance is off, no need to worry • Quick tests to detect a single error… • 1) if balance difference is a multiple of 10 • Likely an addition error • 2) check both the ledger and the journal to see if the trial balance difference is equal to an amount entered in the ledger or the journal • Likely an amount was omitted or added twice • 3) Divide the trial balance difference by two • A DR may have been posted as a CR or vice versa • 4) If the trial balance difference is a multiple of 9 • Likely a transposition error or decimal point error

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