Accounting in the real world amp Internet Activity Whats My Balance Record Sales Volume at Amazoncom Answer the two critical thinking questions Internet Activity wwwsecgov Amazoncom ID: 753945
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Slide1
LESSON 4-1
Preparing a
Chart of AccountsSlide2
Accounting in the real world & Internet Activity
What’s My Balance?
Record Sales Volume at Amazon.com
Answer the two critical thinking questions.
Internet Activity
www.sec.govSlide3
Amazon.com
Might have thought that customers would appreciate these two features and that the benefits of these might outweigh the “slightly reduced sales”
Amazon might not be able to process all the orders in a timely manner. The suppliers could run out of some of the products, increasing the number of late shipments. In extreme situations, the web site might not be able to handle the high volume of sales, and some customers might not come back to try again.Slide4
SEC
Securities Act of 1933
Securities Exchange Act of 1934
Two acts that created the SEC
What are the purposes of these two acts????Slide5
Previously….
Define Accounting terms related to posting from a journal to a general ledger.
Identify accounting concepts and practices related to posting from a journal to a general ledger
Prepare a chart of accounts for a service business organized as a proprietorshipSlide6
Remember!
Each account title used for recording entries in a journal also represents an account in a group of accounts.
The group of accounts is not in random order. There is a standard way of organizing this group of accounts.Slide7
7
LESSON 4-1
RELATIONSHIP OF A T ACCOUNT
TO AN ACCOUNT FORM
page 91
Balance columns
The general ledger account form also contains the T previously shown in the accounting equation, balance sheet, and T account.
The benefit of using the balance-ruled account form is that an up to date account balance is always available.Slide8
8
LESSON 4-1
CHART OF ACCOUNTS
A group of accounts is called a ledger.
A ledger that contains all accounts needed to prepare financial statements is called a general ledger.
The number assigned to an account is called an account numberSlide9
9
LESSON 4-1
ACCOUNT NUMBERS
The first digit of each account number shows the general ledger division in which the account is located.
Example-the asset division accounts are numbered in the100s.
Therefore, the number for the asset account, Supplies begins with a 1.
The second two digits indicate the location of each account within a general ledger division. The 50 in the account number for Supplies indicates that the account is located between account number 140 and 160. (Sequence of 10s)Slide10
Remember….
Expenses are listed in Alphabetical Order
Assets are listed by the order of their liquidity.Slide11
11
LESSON 4-1
1. Write the account title.
Write
the account number
.
REMEMBER: The general ledger accounts must be opened before they can be used.
OPENING AN ACCOUNT
IN A GENERAL LEDGER
page 94
1
2Slide12
ALSO…
Each account is kept on a separate card
Ledger cards are kept in chart of accounts number order.
A new card can be inserted for a new account Slide13
LESSON 4-2
Posting Separate Amounts
from a Journal to a
General LedgerSlide14
Accounting in the real world & Internet Activity
What’s My Balance?
Record Sales Volume at Amazon.com
Answer the two critical thinking questions.
Internet Activity
www.sec.govSlide15
LESSON 4-1
TERMS REVIEW
Ledger-
A group of accounts
general
ledger-
an ledger that contains all accounts needed to prepare financial statements
account
number-
The number assigned to an account
file
maintenance
-
the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
opening an
account
-
Writing an account title and number on the heading of an accountSlide16
Today…
Post separate amounts from a journal to a general ledger.
Posting-
transferring information from a journal entry to a ledger
In this lesson, we will now transfer the information from the journal entries, recorded in Chapter 3, to the general ledger accounts we just opened. This process is called Posting.Slide17
17
LESSON
4-2
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
3. Write the debit amount.
5. Return to the journal and write the account number.
POSTING AN AMOUNT
FROM A GENERAL DEBIT COLUMN
page 96
3
5
1
2
4Slide18
18
LESSON 4-2
POSTING A SECOND AMOUNT
TO AN ACCOUNT
page 97
3
5
1
2
4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
3. Write the debit amount.
5. Return to the journal and write the account number.Slide19
19
LESSON 4-2
POSTING AN AMOUNT
FROM A GENERAL CREDIT COLUMN
page 98
3
5
1
4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
3. Write the credit amount.
5. Return to the journal and write the account number.
2Slide20
20
LESSON 4-2
TERM REVIEW
Posting-
transferring information from a journal entry to a ledger account. (p. 96)
page 99Slide21
Aplia
Work Together 4-2
Own your Own 4-2
Application Problem 4-2Slide22
Exit Ticket
List the five steps of posting from the general columns of a journal to the general ledger?
Are the totals of the General Debit and General Credit columns posted? Why or why not?
Answers:
1. Write the date
2. Write the journal page number.
3. Write the debit amount.
4. Write the new account balance
5.Return to the journal and write the account number
No. Each separate amount in the General Debit and General Credit columns of a journal is posted to the account written in the Account Title column.Slide23
Bell Ringer
Take this time to finish up the “What’s My Balance Scenario”
Work on Drill #4 Handout. This should be a review of the pervious two classes
Turn in to Mr. K when done. Slide24
LESSON 4-3
Posting Column Totals
from a Journal to a
General LedgerSlide25
Objectives for today….
This lesson is about posting journal column totals.
Why are journal columns totaled?
To prove equality of debits and credits.
In this lesson, we will post the totals of the special amount columns.Slide26
Let me Explain…
The totals brought forward from the pervious page of a journal are not posted individually.
Remember that separate amounts in the special amount columns are not posted individually.
Post Reference Columns-
An entry in the account can be traced to:
Its source in the journal
Where it was posted into the account
OR if posting was interrupted, the accounting personnel can easily see which entries in the journal still need to be posted.
A check mark in the Post Ref column means that nothing on that line is posted individually.Slide27
27
LESSON 4-3
CHECK MARKS SHOW THAT AMOUNTS ARE NOT POSTED
page 100
Check mark indicates that amounts ARE NOT posted individually.
Check mark indicates that general amount column totals ARE NOT posted.Slide28
POSTING THE TOTAL
OF THE
SALES
CREDIT COLUMN
The type of journal amount column an amount is recorded in determines how that amount is posted to the general ledger.
The amounts in the special amount columns are posted as part of the total of the amount column
Posting totals saves time and reduces errors because only the total of many of the same kinds of transactions must be posted, as opposed to posting each amount each time a frequently occurring transaction is journalized.
Here are the five steps for posting the total of the sales credit column.Slide29
29
LESSON 4-3
POSTING THE TOTAL
OF THE
SALES
CREDIT COLUMN
page 101
1
4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
3. Write the column total.
5. Return to the journal and write the account number.
2
3
5Slide30
30
LESSON 4-3
POSTING THE TOTAL
OF THE
CASH DEBIT
COLUMN
page 102
1
4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
3. Write the column total.
5. Return to the journal and write the account number.
2
5
3Slide31
31
LESSON 4-3
POSTING THE TOTAL
OF THE
CASH CREDIT
COLUMN
page 103
1
4
1. Write the date.
4. Write the new account balance.
2. Write the journal page number.
3. Write the column total.
5. Return to the journal and write the account number.
2
5
3Slide32
remember
Whenever the debits in an account exceed the credits, the account balance is a debit.
Whenever the credits in an account exceed the debits, the account balance is a credit.Slide33
APLIA-4-3
4-3 WORK TOGETHER AND ON YOUR OWN
4-3 APPLICATION PROBLEMSlide34
LESSON 4-4
Completed Accounting Forms and Making Correcting EntriesSlide35
REMINDER!!!!
WHEN MANUAL JOURNAL ENTRIES ARE MADE, THEY ARE USUALLY ENTERED IN INK SO THAT THE RECORDS ARE MORE PERMANENT.
THE FOUR STEP PROCESS WILL AGAIN BE FOLLOWED TO RECORD TRANSACTIONS IN THE JOURNAL.Slide36
36
JOURNAL PAGE
WITH POSTING COMPLETED
page 105
With the exception of the Totals line, notice that the Post Ref. Column is completely filled in with either an account number or a check mark.Slide37
Explanation
Examine the ledger accounts illustrated on this page (106-107)
Notice that in the Supplies account, three entries are from the first page of the journal and one is from the second page.
Notice that in the Accounts Payable-Supply Depot, the debit entry on August 11 reduced the credit balance of the account.Slide38
Question…
Does the one entry in the Sales account mean that only one sale was made all month?
Answer: No, it is the posting of the Sales Credit Column total, which includes may sales during the month.Slide39
Question #2…
How can you tell whether this is a new company or not?
Answer: There was no previous balance in the owner’s capital account, so it is a new company.Slide40
Question #3 & # 4…
How can you tell whether any of the entries on this page are the posting of column totals?
Answer: You cannot tell just from the posting entries but the credit to sales in a column total.
Why are there no special amount columns in the journal for any of the expense accounts?
Answer: Because the accounts do not have frequent entries during the month.Slide41
41
LESSON 4-4
MEMORANDUM
FOR A CORRECTING ENTRY
page 108
A correcting entry is made to correct an error in the ledger. The error is not merely crossed out.
A Memorandum is used as the source document for a correcting entry.
A correcting entry requires that the error first be analyzed to determine what accounts need to be debited and credited to correct the error. Once this analysis is done, an entry can be recorded in a journal. Slide42
42
LESSON 4-4
JOURNAL ENTRY
TO RECORD A CORRECTING ENTRY
page 108
4
Source Document
3
Credit
1
Date
2
Debit
November 13. Discovered that a payment of cash for advertising in October was journalized and posted in error as a debit to Miscellaneous Expense instead of Advertising Expense, $140.00. Memorandum No. 15.Slide43
Aplia
WORK TOGETHER 4-4
OWN YOUR OWN 4-4
WA NT A CHALLENGE? *Try the mastery problemSlide44
Explore accounting
DEVELOP A CHART OF ACCOUNTS FOR AN IMAGINARY BUSINESS. WRITE A DETAILED DESCRIPTION OF THE COMPANY AND A RATIONAL FOR THE ACCOUNT NUMBERING SYSTEM YOU HAVE DEVELOPED.