CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

1

LESSON 14-6

ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATION

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page 497

(continued on next slide)

1. Source documents are checked, and transactions are analyzed.

2. Transactions are recorded in journals.

3. Journal entries are posted to the accounts payable ledger, the accounts receivable ledger, and the general ledger.

4. Schedules of accounts payable and account receivable are prepared from the subsidiary ledgers.

5. A work sheet is prepared from the general ledger.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 14-6

ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATION

6. Financial statements are prepared.

page 497

(continued from previous slide)

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9. A post-closing trial balance of the general ledger is prepared.

8. Adjusting and closing entries are posted to the general ledger.

7. Adjusting and closing entries are journalized from the work sheet.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 11-1 Subsidiary ledger

A ledger that is summarized in a single general ledger account Accounts Payable ledger

Subsidiary ledger containing only accounts for vendors from whom merchandise or other items are purchased on account

Accounts Receivable ledger Subsidiary ledger containing only accounts for charge customers

Controlling account General ledger account that summarizes all accounts in a subsidiary

ledger Accounts Payable and Accounts Receivable Balance of controlling account equals the total of all account balances

in its related subsidiary ledger

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

4

LESSON 11-1

ACCOUNTS PAYABLE LEDGER AND GENERAL LEDGER CONTROLLING ACCOUNT page 299

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-1

ACCOUNTS PAYABLE LEDGER FORMS

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3 4 5 6

page 300

1. Write the vendor name.2. Write the vendor number.3. Write the date.4. Write the word Balance.5. Place a check mark in the Post. Ref. column.6. Write the balance.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-1

POSTING FROM A PURCHASES JOURNAL TO AN ACCOUNTS PAYABLE LEDGER page 301

1. Write the date.2. Write the journal page number.3. Write the credit amount.

4. Write the new account balance.5. Write the vendor number.

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2

3

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5

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-1

POSTING FROM A CASH PAYMENTS JOURNAL TO AN ACCOUNTS PAYABLE LEDGER page 302

4. Subtract the amount in the Debit column from the previous balance in the Credit column. Write the new balance.

1. Write the date.

5. Write the vendor number.

2. Write the journal page number.

3. Write the debit amount.

1 2 3

4

5

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

8

LESSON 11-1

POSTING A CREDIT ENTRY FROM A GENERAL JOURNAL TO AN ACCOUNTS PAYABLE LEDGER page 303

1. Write the date.2. Write the general journal

page number.3. Write the amount.

4. Add the amount in the Credit column to the previous balance in the Credit Balance column. Write the new balance.

5. Write the vendor number.

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4

2

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

9

LESSON 11-1

POSTING A DEBIT ENTRY FROM A GENERAL JOURNAL TO AN ACCOUNTS PAYABLE LEDGER page 303

1. Write the date.2. Write the general journal

page number.3. Write the amount.

4. Add the amount in the Debit column to the previous balance in the Debit Balance column. Write the new balance.

5. Write the vendor number.

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4

2 53

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

10

LESSON 11-1

COMPLETED ACCOUNTS PAYABLE LEDGER page 304

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

PROVING THE ACCOUNTS PAYABLE LEDGER

Schedule of Accounts Payable – listing of vendor accounts, account balances, and total amount due all vendors Prepared after all entries in a journal are posted Total must match the balances of Accounts Payable in the general ledger

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LESSON 11-1

page 305

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

12

LESSON 11-1

TERMS REVIEW

subsidiary ledger accounts payable ledger accounts receivable ledger controlling account schedule of accounts payable

page 306

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 11-2

Posting to an Accounts Receivable Ledger

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

14

LESSON 11-2

ACCOUNTS RECEIVABLE LEDGER AND GENERAL LEDGER CONTROLLING ACCOUNT page 307

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-2

ACCOUNTS RECEIVABLE LEDGER FORMS page 308

1 Customer name 2 Customer number

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-2

POSTING FROM A SALES JOURNAL TO AN ACCOUNTS RECEIVABLE LEDGER page 309

4. Add the amount in the Debit column to the previous balance in the Debit Balance column. Write the new account balance.

1. Write the date.2. Write the sales journal

page number.3. Write the debit amount. 5. Write the customer number.

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2

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1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

17

LESSON 11-2

POSTING FROM A CASH RECEIPTS JOURNAL TO AN ACCOUNTS RECEIVABLE LEDGER page 310

4. Subtract the amount in the Credit column from the previous balance in the Debit Balance column. Write the new balance.

2. Write the cash receipts journal page number.

5. Write the customer number.

3. Write the credit amount.

1. Write the date.

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1

2

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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-2

1. Write the date.

POSTING A CREDIT ENTRY FROM A GENERAL JOURNAL TO AN ACCOUNTS RECEIVABLE LEDGER page 311

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2. Write the general journal page number.

3. Write the amount.4. Subtract the

amount in the Credit column from the previous balance in the Debit Balance column. Write the new balance.

5. Write the customer number.

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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

19

LESSON 11-2

COMPLETED ACCOUNTS RECEIVABLE LEDGER page 312

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

PROVING THE ACCOUNTS RECEIVABLE LEDGER

Schedule of accounts receivable – listing of customeraccounts, account balances, and total amount due from all customers (total matches balance in Accounts Receivable)

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LESSON 11-2

page 313

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-2

TERM REVIEW

schedule of accounts receivable

page 314

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 11-3

Posting from Journals to a General Ledger

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

23

LESSON 11-3

STARTING A NEW PAGE FOR AN ACCOUNT IN A GENERAL LEDGER

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3 4 5 6

page 315

1. Write the account title.2. Write the account number.3. Write the date.4. Write the word Balance in the Item column.5. Place a check mark in the Post. Ref. column.6. Write the balance.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-3

POSTING FROM THE GENERAL AMOUNT COLUMNS OF A CASH PAYMENTS JOURNAL TO A GENERAL LEDGER page 316

4. Add the amount in the Debit column to the previous balance in the Balance Debit column. Write the new balance.

5. Write the general ledger account number.

1. Write the date.2. Write the journal

page number.3. Write the debit

amount. 4

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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-3

5. Write the general ledger account number.

POSTING A DEBIT ENTRY FROM A GENERAL JOURNAL TO A GENERAL LEDGER page 317

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2

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1. Write the date.2. Write the

general journal page number.

3. Write the amount.

4. Calculate and write the new account balance.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-3

5. Write the general ledger account number.

POSTING A CREDIT ENTRY FROM A GENERAL JOURNAL TO A GENERAL LEDGER page 318

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1. Write the date.2. Write the

general journal page number.

3. Write the amount.

4. Calculate and write the new account balance.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 11-4

Posting Special Journal Totals to a General Ledger

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-4

5. In the sales journal, write the general ledger account number.

POSTING TOTALS OF A SALES JOURNAL TO A GENERAL LEDGER page 320

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4. For each account, calculate and write the new account balance.

1. Write the date.2. Write the sales journal

page number.3. For each column and

account, write the column total.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-4

1. Write the date.

POSTING THE TOTAL OF A PURCHASES JOURNAL TO A GENERAL LEDGER page 321

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2. Write the purchases journal page number.

3. For each account, write the purchases journal column total.

4. For each account, calculate and write the new balance.

5. Write the purchases general ledger account number and the accounts payable general ledger account number.2

2

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-4

POSTING SPECIAL AMOUNT COLUMN TOTALS OF A CASH RECEIPTS JOURNAL TO A GENERAL LEDGER page 322

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1. Date2. Journal page

number3. Column total4. Account balance5. Account number

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-4

POSTING SPECIAL AMOUNT COLUMN TOTALS OF A CASH PAYMENTS JOURNAL TO A GENERAL LEDGER page 324

1. Date2. Journal page number3. Column total4. Account balance5. Account number2

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1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

ORDER OF POSTING FROM SPECIAL JOURNALS

Items affecting customer or vendor accounts are posted periodically during the month Keeps subsidiary ledger balances up to date

General ledger accounts are posted less often because they are only needed when financial statements are prepared

Special amount columns are posted monthly in the following order:1. Sales journal2. Purchases journal3. General journal4. Cash receipts journal5. Cash payments journal

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LESSON 11-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 11-5

Correcting Errors in Subsidiary Ledger Accounts

December 10. Discovered that a sale on account to Cumberland Center on December 3 was incorrectly charged to the account of Country Crafters, $412.00. Memorandum No. 56.

Accounts Rec. Country CraftersCumberland

Center12/3 412.0012/3 412.00

Sales

12/3 412.0012/10 412.00 12/10 412.00

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

34

LESSON 11-5

JOURNALIZING CORRECTING ENTRIES AFFECTING CUSTOMER ACCOUNTS

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page 327

December 10. Discovered that a sale on account to Cumberland Center on December 3 was incorrectly charged to the account of Country Crafters, $412.00. Memorandum No. 56.

1. Write the date. 5. Write the name of incorrectly charged customer.2. Write the name of correct customer.

3. Write the memorandum number.4. Write the amount.

6. Write the amount.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 11-5

POSTING CORRECTING ENTRIES AFFECTING CUSTOMER ACCOUNTS page 328

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3. Write the amount.

2. Write the general journal page number.

1. Write the date.

5. Write the appropriate customer number in the Post. Ref. columns.

4. Calculate and write the new account balances.