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General Ledger Accounting

General Ledger Accounting. Jennifer Rodenbeck, CPA, CPFO City of Cedar Falls Finance Manager/City Clerk July 24, 2013 Jennifer.rodenbeck@cedarfalls.com. Class Today . Class List with Email Handouts – Wait to email them to you Definitions Breaks. Introductions. What City you are from

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General Ledger Accounting

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  1. General Ledger Accounting Jennifer Rodenbeck, CPA, CPFO City of Cedar Falls Finance Manager/City Clerk July 24, 2013 Jennifer.rodenbeck@cedarfalls.com

  2. Class Today • Class List with Email • Handouts – Wait to email them to you • Definitions • Breaks

  3. Introductions • What City you are from • Approximate size of City • What is your position • How long in your position • Most difficult thing you are dealing with currently at work as it relates to finances

  4. You are full of Bologna (Baloney)

  5. On Cloud nine

  6. Try to Understand

  7. Basic Accounting • Assets – Definition: Resources of the City that may or may not be currently available to conduct the activity of the City. Ex. Cash, investments, equipment (Debit Balance) • Liabilities – Definition: Demands and obligations upon the City. Ex. Accounts Payable(Credit Balance) • Fund Balance (Equity) – Credit Balance • Revenues – Credit Balance • Expenses – Debit Balance • Double Entry – Definition: Every entry has two parts, a debit and a credit • Journal Entry – Definition: A balanced set of entries used to reflect transactions.

  8. Liabilities Assets Expenses Revenues Fund Balance (Net Difference)

  9. Governmental Accounting • Why different??? • Funds • Double - Double Entries for everything

  10. Manual Accounting • Why is it important??? • Understanding what your software is doing! • Why??? • Doesn’t Balance • Make Corrections • Setting up new software

  11. General Ledger • Why is it important to us??? • Accurate information for annual reporting, budgeting • Audit • Public record

  12. MY CITY:LEDGERS • Three Ledgers needed • General Ledger • Subsidiary Ledger • Budget Ledger • Double Entry Accounting: Every entry has two parts, a debit and a credit within each of the ledger types.

  13. GENERAL LEDGER • Definition: The fund summary or monthly recording of activities which combine the values of the subsidiary and budgetary ledgers to establish financial position of the City.

  14. MY CITY FINANCIAL PICTURE

  15. SUBSIDIARY LEDGER • Definition: The record of detail used for individual accounts within a cost center and/or fund. • Each line item or account number has a running total throughout the year • Each line item or account number must belong to a larger grouping: revenue type or department or function

  16. MY CITY FINANCIAL PICTURE

  17. BUDGET LEDGER • Definition: The record of budgetary expenditures compared to the allocated budget for that function, fund or project. • Used to monitor or control revenues by type • Used to monitor or control expenditures by functions • Usually some portion of account number or code is used to generate totals for ledger (chart of accounts)

  18. MY CITY FINANCIAL PICTURE

  19. Budget

  20. CHART OF ACCOUNTS City Standard Chart of Accounts Definition: A standardized method to insure consistency between budget, accounting, and financial reporting activities.

  21. Account Numbers Expense: 001-1010-6010 – General Fund – Police – Full Time Salary Revenue: 001-1010-1-4765 – General Fund – Police – Misc Revenue - Fines Cash: 001-1110 – General Fund – Cash Accounts Payable: 001-2020 – General Fund – Accounts Payable Fund Balance: 001-3860 – General Fund – Unreserved Fund Balance

  22. GENERAL LEDGER A PRACTICAL GUIDE

  23. GENERAL LEDGER Liabilities Assets Fund Balance Revenue Control Expenditure Control

  24. SUBSIDIARY LEDGER - Revenue Property Taxes Revenue Control Hotel/Motel Taxes Interest Income

  25. SUBSIDIARY LEDGER - Expenditures Office Supplies Expenditure Control Professional Fees Capital Outlay

  26. BUDGET LEDGER Appropriations Estimated Revenues Budget Fund Balance

  27. GENERAL LEDGER 001-2020 Accts Payable 001-1110 Cash $5,000 001-3860 Unreserved Fund Balance $5,000 Dr. Cash $5,000 Cr. Equity $5,000 - To record beginning balance

  28. BUDGET LEDGER Appropriations Estimated Revenues $50,000 $50,000 Budget Fund Balance $0

  29. Received the following revenues: $40,000 Property Tax Revenue $2,000 Building Permits $1,000 Interest Income

  30. Dr. Cash $43,000 Cr. P/T Rev $40,000 Cr. Bldg Permit Rev $ 2,000 Cr. Int Income $ 1,000 Total $43,000 $43,000

  31. SUBSIDIARY LEDGER - Revenue 001-4000 Property Taxes $40,000 001-1900 Revenue Control $43,000 001-4122 Building Permits $2,000 001-4300 Interest Income $1,000

  32. GENERAL LEDGER 001-2020 Accts Payable 001-1110 Cash $5,000 $43,000 001-3860 Unreserved Fund Balance $5,000 $43,000

  33. BUDGET LEDGER Appropriations Estimated Revenues $50,000 $50,000 $43,000 Budget Fund Balance $0 $43,000

  34. Paid the following expenditures: $3,000 New City Clerk Desk $10,000 Audit Fee $20,000 Police Car

  35. Dr. Office Supp $3,000 Dr. Prof Fees $10,000 Dr. Cap Outlay $20,000 Cr. Cash $33,000 Total $33,000 $33,000

  36. SUBSIDIARY LEDGER - Expenditures 001-6506 Office Supplies $3,000 001-2900 Expenditure Control $33,000 001-6401 Professional Fees $10,000 001-6700 Capital Outlay $20,000

  37. GENERAL LEDGER 001-2020 Accts Payable 001-1110 Cash $5,000 $33,000 $43,000 $15,000 001-3860 Unreserved Fund Balance $5,000 $33,000 $43,000 $15,000

  38. BUDGET LEDGER Appropriations Estimated Revenues $50,000 $50,000 $43,000 $33,000 $17,000 $7,000 Budget Fund Balance $0 $43,000 $33,000 $10,000

  39. Annual Financial Report

  40. Practice Entries

  41. City of Boondocks • Cash on Hand at Beginning of Year = $10,000 • Only One Fund – General Fund • Received the following revenues: • Property taxes - $75,000 • Mobile home taxes = $1,000 • Interest Income = $2,000 • Electrical Permits = $5,000 • Swimming Pool receipts = $20,000 • Library donation = $30,000 • Paid the following expenses: • Staff training = $2,000 • Building repair = $10,000 • Auditor = $25,000 • Engineer Study = $50,000 • Clerk’s desk = $5,000 • Total budgeted revenues = $200,000 • Total budgeted expenses = $180,000

  42. Case Study Entries & Annual Financial Report Preparation

  43. Special Transactions

  44. Payroll • Gross Payroll - • payroll + city share of benefits = • TOTAL COST OF PAYROLL

  45. Dr. Salaries $500 Dr. FICA $ 38 Dr. IPERS $ 45 Cr. Cash $422 Cr. Cash $ 83 Cr. W/H Liab $ 78 Total $583 $583

  46. GENERAL LEDGER 001-2120 Accrued Payroll Taxes 001-1110 Cash $422 $78 $83 $505 001-3860 Unreserved Fund Balance $583

  47. SUBSIDIARY LEDGER - Expenditures 001-6020-6010 Salaries $500 Expenditure Control $583 001-6020-6110 FICA $38 001-6020-6130 IPERS $45

  48. GENERAL LEDGER 001-2120 Accrued Payroll Taxes 001-1110 Cash $422 $78 $83 $505 $78 $78 $583 001-3860 Unreserved Fund Balance $583 Assets + Liab = Equity

  49. Voided Checks 001-1110 Cash on Hand 001-4310 Rents Journal Entry: DR CR 001-4310 25.00 Returned: Bad check for rental 001-1110 25.00

  50. Sale of Bonds 300-1110 Cash on Hand 300-4820 Proceeds from Bonds and Premiums Journal Entry: DR CR 300-1110 250,000 Bond Fund 300-4820 250,000

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