Chapter 12

1. Chapter 12

2. Posting to General Ledgers and Subsidiary Ledgers A businesses size, number of transactions, and types of transactions determine the number of ledgers used in an accounting system

3. Subsidiary Ledger A ledger that is summarized in a single general ledger account

4. Accounts Payable Ledger A subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account is called an accounts payable ledger

5. Accounts Receivable Ledger A subsidiary ledger containing only accounts for charge customers is called an accounts receivable ledger

6. Total amounts are summarized in single general ledger accounts: Accounts Payable for vendors, Accounts Receivable for charge customers

7. Controlling Account An account in a general ledger that summarizes all accounts in a subsidiary ledger is called a controlling account

8. Controlling Account The balance of a controlling account equals the total of all account balances in its related subsidiary ledger

9. 12-1 Posting to an Accounts Payable Ledger

10. Accounts Payable Ledger and General Ledger Controlling Account • Omni assigns a vendor number to each account in the A/P ledger • First digit identifies the division in which the controlling account appears in the general ledger • Second two digits show each account’s location within a subsidiary ledger

11. Accounts Payable Ledger Forms • Omni uses a 3-column payable subsidiary account form • Example p. 275 • A new account is opened by: • Writing the vendor name & number on the heading

12. Posting from a Purchases Journal to an Accounts Payable Ledger The amount on each line of a purchases journal is posted as a credit to a vendor account in the accounts payable ledger

13. Posting from a Purchases Journal to an Accounts Payable Ledger Write the date Write the journal page number in the post. Ref. column Write the credit amount in the credit column Add the amount in the credit column to the previous balance in the credit balance column Write the vendor #230 in the post. Ref. column on the purchases journal. This shows everything is complete.

14. 12-2 Posting from Other Journals to an Accounts Payable Ledger

15. Posting from a Cash Payments Journal to an Accounts Payable Ledger Each entry in the A/P debit column of a cash payments journal affects a vendor account

16. Posting from a Cash Payments Journal to an Accounts Payable Ledger P. 278 Example Write the date Write the journal page number in the post ref column Write the debit amount in the debit column of the vendor account Subtract the amount in the debit column to the previous balance in the credit balance column Write the vendor number in the post ref column of the cash payments journal

17. Posting a Credit Entry from a General Journal to an Accounts Payable Ledger P. 279 Example Write the date Write the general journal page number in the post ref column Write the amount in the credit column of the vendor account Add the amount in the credit column to the previous balance in the credit balance column Write the vendor number in the post ref column

18. Proving the Accounts Payable Ledger A controlling account balance in a general ledger must equal the sum of all account balances in a subsidiary ledger

19. Proving the Accounts Payable Ledger A listing of vendor accounts, account balances and total amount due all vendors is called a schedule of accounts payable

20. Proving the Accounts Payable Ledger A schedule of a/p is prepared after all entries in a journal are posted Example p. 281

21. 12-3 Posting to an Accounts Receivable Ledger

22. Accounts Receivable Ledger and General Ledger Controlling Account When the balance of a customer account in an accounts receivable ledger is changed, the balance of the controlling account, A/R, is also changed The total of all customer account balances in the A/R ledger = the balance of the controlling account A/R

23. Accounts Receivable Ledger Forms Omni uses a 3-column accounts receivable subsidiary account form Normal debit balance

24. Posting from a Sales Journal to an Accounts Receivable Ledger Example p. 285 Write the date Write the sales journal page number in the post ref column Write the debit amount in the debit column Add the debit amount to the previous balance and put it in the debit balance column Write the customer number in the post ref column of the sales journal

25. 12-4 Additional Posting to an Accounts Receivable Ledger

26. Posting from a Cash Receipts Journal to an Accounts Receivable Ledger Example p. 287 Write the date Write the cash receipts journal page number (CR) in the post ref column on the A/R ledger Write the credit amount Subtract the amount from the previous balance, write the new balance in the debit balance column Write the customer # in the post ref column of the cash receipts journal

27. Proving the Accounts Receivable Ledger Schedule of Accounts Receivable is prepared Balance of A/R in the ledgers must equal the schedule of A/R balance

28. 12-5 Posting from Journals to a General Ledger

29. Starting a New Page for an Account in a General Ledger When all lines have been used on a ledger, a new one is prepared Account name, account number and account balances are recorded on the new page Example p. 291

30. Starting a New Page for an Account in a General Ledger Write the account title Write the account number Write the date Write the word balance in the item column Place a check mark in the post ref column to show that the amount has been carried forward Write the balance in the balance column

31. Posting from the General Amount columns of a Cash Payments Journal to a General Ledger Recording items onto a general ledger from the general amount columns in a special journals, in this case cash payments journal Example p. 292

32. Posting a Debit entry from a General Journal to a General Ledger Similar to posting a debit entry from the general amount columns of a special journal P. 293 Example

33. Posting a Credit Entry from a General Journal to a General Ledger Same as debit post, just working with credits P. 294 Example

34. 12-6 Posting Totals to a General Ledger

35. Posting Totals of a Sales Journal to a General Ledger P. 296 Example Write the date Write the sales journal page # in the post ref column (s) For each column and account, write the column total in debit or credit For each account, calculate and write the new account balance In the sales journal, write the general ledger account number in parentheses below the column total

36. Posting the Total of a Purchases Journal to a General Ledger P. 297 Example Write the date Write the purchases journal page number in the post ref (p) For each account write the purchases column total For each account, calculate the new account balance Return to the purchases journal and write the purchases general ledger account number and accounts payable general ledger account number in parentheses below the column total

37. Posting Totals of the Special Amount Columns of a Cash Receipts Journal to a General Ledger P. 298 Example Write the date Write the cash receipts journal page number in the post ref column (cr) For each special amount column & account, write the total in the debit or credit column Calculate the new balances on the ledgers Return to the cash receipts journal and write the general ledger account number in parentheses below the special amount column total

38. Posting Totals of the Special Amount Columns of a Cash Payments Journal to a General Ledger P. 300 Example Write the date Write the cash payments journal number in the post ref column (cp) For each special amount column and account, write the amounts in dr or cr Calculate the new balances Return to the cash payments journal and write the general ledger account number in parentheses below the special amount columns

39. Order of Posting from Special Journals • Journals are posted in the following order: • Sales Journal • Purchases Journal • General Journal • Cash Receipts Journal • Cash Payments Journal