Accounting 11 Posting to a General Ledger In

Accounting 11 Posting to a General Ledger

• In the last unit, we looked at journalizing using a general journal. We learned how to classify transactions as debits and credits in Chapter 3 and then create the official document, the general journal, in Unit 6. In this chapter we will look at transferring the information from a general journal to the general ledger. • Accounts with the same classification are placed together in one division of a general ledger. For example, all assets are kept together in one division while all expense accounts are in a different division. Division numbers are assigned by 100’s. • 100 Assets • 200 Liabilities • 300 Owner’s Equity • 400 Revenue • 500 Expenses

Each account in a ledger is given a name and a number. The name given to an account is called the Account Title. The number given to an account is called the Account Number. Once a name and number has been assigned to each account, it is recorded in a Chart of Accounts.

• Within a division, accounts are usually listed in alphabetical order. When Lawnmaster wants to add a new expense account to the existing Expense Division, it is placed alphabetically among the existing accounts and assigned an appropriate account number 510 Advertising Expense (existing) 515 Car Expense (new) 520 Equipment Repair Expense (existing) In this example, Car Expense would be assigned account number 515 Whenever possible, the middle unused number is assigned to the new account.

When a new account is added to the end of a ledger division, the next number in the sequence is used. 210 220 230 Bower Company (existing) Palmer Supply Company (existing) Westside Garage (new) A business selects a numbering system that best fits needs. Some businesses anticipate adding many accounts in the future and perhaps a 4 -digit numbering system would be used.

Posting From a Journal 1. Write the date in the Date column of the ledger. The month and year are only written once per page. 2. Write the general journal page number in the Post (Eg. J 3) Ref. 3. Write the debit amount in the General Debit column or, write the credit amount in the General Credit column. 4. Figure out the new account balance by either adding to or subtracting from the previous balance. 5. Return to the general journal and write the account number in the journal’s Post Ref. column