Accounting Chapter 13

1
Accounting - Chapter 13

• Posting to General and Subsidiary Ledgers

2
Ledgers

• General Ledger
• a ledger with all accounts needed to prepare
  financial statements
• Subsidiary Ledgers
• to eliminate a bulky ledger, subsidiary ledgers
  are kept for vendors and customers
• accounts payable ledger holds all vendor accounts
• accounts receivable ledger holds all customer
  accounts

3
Controlling Accounts

• Controlling Account
• an account in a general ledger that summarizes
  all accounts in a subsidiary ledger
• Accounts Receivable (customers)
• Accounts Payable (vendors)

4

• Posting to a General Ledger
• Only amounts from the general debit or credit
  columns are posted to the general ledger
  individually
• Totals of special amount columns are posted at
  the end of the month.

• Opening a New Page for a General Ledger Account
• When all lines in a ledger account page are
  filled, a new page must be opened.
• Do the following to open the new page
• write account title number
• write in the date
• Balance is written in the item column
• write the balance in the balance column (debit or
  credit)

5
Assigning Account Numbers in Subsidiary Ledgers

• Three digit vendor or customer numbers are
  assigned in subsidiary ledgers
• Each digit signifies something
• digit 1 - identifies the division in which the
  controlling account appears in the general ledger
  (AR 100 AP 200)
• digit 2 and 3 - shows the account location in the
  subsidiary ledger
• Adding new accounts
• vendors and customers are listed alphabetically
  in each ledger
• same procedure as general ledger

6
The Accounts Payable Ledger

• Has only one balance column - credit
• a liability with a normal credit balance
• Information from the Accounts Payable Columns
• a credit - add the amount to the balance
• a debit - subtract the amount from the balance
• The same steps are followed as a general ledger
  when posting

7
The Accounts Receivable Ledger

• Has only one balance column - debit
• an asset with a normal debit balance
• Information from the Accounts Receivable Columns
• a debit - add the amount to the balance
• a credit - subtract the amount from the balance
• The same steps are followed as a general ledger
  when posting

8
Proving the Accuracy of Posting

• Prove Cash
• Prove the Subsidiary Ledgers
• Schedule of Accounts Payable
• Schedule of Accounts Receivable
• made after all entries have been posted for the
  month
• balance in AR/AP general ledger account is equal
  to the Schedule of AR/AP