ACCG101 Lecture Notes - Lecture 4: Trial Balance, General Ledger, Income Statement

ACCG101 Lecture Notes - Lecture 4: Trial Balance, General Ledger, Income Statement

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limehound700

30 May 2018

School

Macquarie University

Department

Accounting and Corporate Governance

Course

ACCG101

Professor

All

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Week 4 Posting and Trial Balance

General Ledger

- All transactions for a business are recorded in accounts set up in the general

ledger called the chart of accounts

- Contains all assets, liabilities and equity accounts

- Collection of all the individual accounts of an entity

- Organised in the order they appear in the balance sheet and the income

statement

- Each account has a specific identification number

Posting

- The procedure of transferring journal entries to ledger accounts

1. Enter date and name to which credit entry will be posted. This is called a

cross-reference

2. Enter amount debited to the left side of the account

3. In the general journal place a tick beside the account in the posting reference

4. Repeat for credit entry

Cross references

Serve two important purposes:

- Indicate the corresponding ledger account to which the entries are posted

- Provide information on the nature of each transaction

Account Formats

T-Account

- Convenient way to show individual accounts

- Illustrate effects of transactions on an account

- Still used in practice for quick calculations

Running Balance Accounts

- Used in formal accounting systems

- Standard presentation for computerised systems

- Familiar to most

Trial Balance

- Lists all ledger accounts with their closing balances at a given time

- Often prepared at the end of an accounting period

- Purpose is to prove the math equality of debits and credits after posting and

uncover errors

- Debits in one column, credits in another

- The totals of both columns must be equal

- If this is the case the ledger ‘balances’

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All transactions for a business are recorded in accounts set up in the general ledger called the chart of accounts. Contains all assets, liabilities and equity accounts. Collection of all the individual accounts of an entity. Organised in the order they appear in the balance sheet and the income statement. Each account has a specific identification number. The procedure of transferring journal entries to ledger accounts: enter date and name to which credit entry will be posted. This is called a cross-reference: enter amount debited to the left side of the account, in the general journal place a tick beside the account in the posting reference, repeat for credit entry. Indicate the corresponding ledger account to which the entries are posted. Provide information on the nature of each transaction. Still used in practice for quick calculations. Lists all ledger accounts with their closing balances at a given time. Often prepared at the end of an accounting period.

On October 3, 2018, Regal Company purchased $4,125 of supplieson account. In Regalâs chart of accounts, the supplies account isNo. 15, and the Accounts Payable account is No. 21.

Required:

Journalize and insert theposting references for the October 3, 2018, transaction on page 91of Regal Companyâs two-column journal.

Prepare a four-column accountfor Supplies. Enter a debit balance of $2,050 as of October 1,2018. Enter âBalanceâ in the Item column and place a check mark (â)in the Posting Reference column.

Prepare a four-column accountfor Accounts Payable. Enter a credit balance of $18,440 as ofOctober 1, 2018. Place a check mark (â) in the Posting Referencecolumn. Enter âBalanceâ in the Item column and place a check mark(â) in the Posting Reference column.

Post the October 3, 2018,transaction to the accounts. Insert the appropriate postingreferences in both the journal and the ledger as each item isposted.

Do the rules of debit and credit apply to allcompanies?

CHART OF ACCOUNTS

Regal CompanyGeneral Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Land
14	Prepaid Rent
15	Supplies
16	Equipment
17	Automobiles

	LIABILITIES
21	Accounts Payable
22	Unearned Rent
23	Notes Payable
24	Salaries Payable

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividends

	REVENUE
41	Fees Earned
42	Sales Commission

	EXPENSES
51	Advertising Expense
52	Automobile Expense
53	Insurance Expense
54	Rent Expense
55	Wages Expense
56	Supplies Expense
57	Utilities Expense
58	Miscellaneous Expense

B.Prepare a four-columnaccount for Supplies. Enter a debit balance of $2,050 as of October 1, 2018. Enter âBalanceâin the Item column and place a check mark (â) in the PostingReference column.
	C.Prepare a four-columnaccount for Accounts Payable. Enter a credit balance of $18,440 as of October 1, 2018. Place a checkmark (â) in the Posting Reference column. Enter âBalanceâ in theItem column and place a check mark (â) in the Posting Referencecolumn.
	D.Postthe October 3, 2018, transaction to the accounts. Insert theappropriate posting references in both the journal and the ledgeras each item is posted.

silvertermite17

I need help with the Post References of the Sales and Cash Journal as well as posting them to the General ledger accounts in the End of Month Posting:

Now that you have finished recording all of the transactions for the month of June, you are ready to perform the end of month posting procedure. The purpose of this end of month posting is to transfer the totals from the special journals to the appropriate general ledger accounts so that the balances in those ledger accounts reflect all of the transactions that occurred throughout the period.

Instructions for end of month posting

1)Total the columns in the special journals. Record the amount in the Total row of each journal.

2)Post the totals of the columns in the special journals to their corresponding ledger account. To confirm that the posting has been performed, a posting reference is recorded in the last row of the special journals. If the total of a column is not required to be posted, you need to record an X in the post reference field for that column.

3)Record the final unadjusted balance of each ledger account in the Unadjusted Balance row of each ledger, even for ledgers with a balance of zero. Although each ledger already has a running balance, the Unadjusted Balance row must still be filled out in order to receive full points.

SALES JOURNAL

Date		Account	Invoice No.	Post Ref.	Accounts Receivable	Sales Tax	Sales Revenue	Cost of Goods Sold
Jun	6	ARC - Great Sports	362	110-3	5,712	272	5,440	2,880
Jun	12	ARC - The Locker Room	363	110-6	21,147	1,007	20,140	9,820
Jun	17	ARC - Mick's Sporting	364	110-5	20,202	962	19,240	10,560
Jun	28	ARC - The Locker Room	365	110-6	1,197	57	1,140	600

Total					?	?	?	?
Post Reference					(?)	(?)	(?)	(?) / (?)

CASH PAYMENTS JOURNAL

Date		Account	Check No.	Post Ref.	Debit				Credit
Date		Account	Check No.	Post Ref.	Accounts Payable	Merchandise Inventory	Wages Expense	Other Accounts	Cash
Jun	3	Merchandise Inventory	731	X		3,520			3,520
Jun	4	APC - Sport Borders	732	210-4	9,500				9,500
Jun	5	Wages Payable	733	220			835	1,000	1,835
Jun	6	APC - Addax Sports	734	210-2	5,400				5,400
Jun	9	APC - Sports 'R Us	735	210-5	8,700				8,700
Jun	12	Electricity Payable	736	221				1,420	1,420
Jun	12	Wages Expense	737	X			2,384		2,384
Jun	15	Prepaid Rent	738	140				2,000	2,000
Jun	19	Wages Expense	739	X			1,695		1,695
Jun	22	APC - Extreme Sports	740	210-3	49,313				49,313
Jun	24	APC - J. J. Spud	741	210-1	10,215				10,215
Jun	26	Wages Expense	742	X			2,320		2,320
Jun	30	Merchandise Inventory	743	X		3,200			3,200
Jun	30	Salary Expense	744	545				5,300	5,300

Total					?	?	?	?	?
Post Reference					(?)	(?)	(?)	(?)	(?)

GENERAL LEDGER

Account: Cash
Account No. 100

Date		Description	Ref.	Debit	Credit	Balance
May	31	Balance				65,589 DR
Jun	30
Jun	30
Jun	30
Jun	30	Unadjusted Balance

Account: ARC - Accounts Receivable Control
Account No. 110

Date		Description	Ref.	Debit	Credit	Balance
May	31	Balance				66,657 DR
Jun	30
Jun	30
Jun	30
Jun	30
Jun	30	Unadjusted Balance

Account: Merchandise Inventory
Account No. 120

Date		Description	Ref.	Debit	Credit	Balance
May	31	Balance				66,640 DR
Jun	21	Purchase return to Extreme Sports Inc	GJ		320	66,320 DR
Jun	30
Jun	30
Jun	30
Jun	30
Jun	30	Unadjusted Balance

Account: APC - Accounts Payable Control
Account No. 210

Date		Description	Ref.	Debit	Credit	Balance
May	31	Balance				78,148 CR
Jun	21	Purchase return to Extreme Sports Inc	GJ	320		77,828 CR
Jun	30
Jun	30
Jun	30					DRCR
Jun	30
Jun	30	Unadjusted Balance

Account: Sales Tax Payable
Account No. 240

Date		Description	Ref.	Debit	Credit	Balance
May	31	Balance				14,073 CR
Jun	30
Jun	30
Jun	30
Jun	30
Jun	30	Unadjusted Balance

Account: Sales Revenue
Account No. 400

Date		Description	Ref.	Debit	Credit	Balance
May	31	Balance				0
Jun	30
Jun	30
Jun	30
Jun	30	Unadjusted Balance

Account: Cost of Goods Sold
Account No. 500

Date		Description	Ref.	Debit	Credit	Balance
May	31	Balance				0
Jun	30
Jun	30
Jun	30
Jun	30	Unadjusted Balance

Account: Wages Expense
Account No. 516

Date		Description	Ref.	Debit	Credit	Balance
May	31	Balance				0
Jun	30
Jun	30
Jun	30
Jun	30	Unadjusted Balance

yellowmosquito946

PLEASE FOLLOW THE INSTRUCTIONSâ

Assignment: Special Journals: Sales and Cash Receipts (12 Points)

Prepare a cash receipts journal based on the information given below and post it to the Accounts Receivable Subsidiary Ledger.

On Nov 17, Ms. Don & Co. received $1,450 from Gians Graze to apply on account. The source document for this transaction is Receipt 30.

Instructions:

1. Prepare a sales journal entry based on the information given above and post it to the Accounts Receivable General Ledger account and to the Accounts Receivable Subsidiary Ledger. (Use November 7 for this transaction date.) ***This is the same entry that you made for the previous assignment. However, use the transaction date given (Nov. 7).

2. Enter the above transaction (Nov 17) into the Cash Receipts Journal and post it to the Accounts Receivable General Ledger account and to the Accounts Receivable Subsidiary Ledger.

3. Prepare a Schedule of Accounts Receivable and check to see that the total agrees with the Accounts Receivable ledger account.

			Sales Journal
Date	Doc. No.	Customer's Account Name	Post Ref.	Sales Credit	Sales Tax Payable Credit	Accounts Receivable Debit

				Cash Receipt Journal
Date	Doc. No.	Account Name	Post Ref.	Sales Credit	Sales Tax Payable Credit	Account Receivable Credit	Sales Discount Credit	Cash in Bank Debit

	Ms. Don & Co. Schedule of Accounts Receivable November 30, 20xx
Account Name	Amount


Total Accounts Receivable		$

redmammoth172

Particulars

Post

ref.