Fast File, Chapter 7CHAPTER 7 Chapter Quiz Posting Journal Entries to General Ledger Accounts True or False Directions: Read each of the following statements to determine whether the
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Posting Journal Entries to General Ledger Accounts
Section 1: The General Ledger
• posting—the process of transferring information from the journal to individual general ledger accounts
A. Setting Up the General Ledger • general ledger—a permanent record organized by account number • In a computerized accounting system, the electronic fi les containing the accounts are
still referred to as the ledger, or the ledger accounts. 1. The Four-Column Ledger Account Form • ledger account forms—used to record information about specifi c accounts in a
manual accounting system 2. Accounts in the Ledger
a. Opening a General Ledger Accountb. Starting a New Page for an Existing Account
B. The Usefulness of Journals and Ledgers • Managers use ledgers to obtain summarized information.
Section 2: The Posting Process
A. The Fourth Step in the Accounting Cycle: Posting • The ledger is sometimes called the book of fi nal entry. • Posting to a ledger account is completed from left to right. 1. Posting to the Roadrunner General Ledger
2. The Importance of Posting • Posting organizes business transaction details into the proper accounts. B. General Ledger Account Balances 1. Computing a New Account Balance
2. Showing a Zero Balance in a Ledger Account
Section 3: Preparing a Trial Balance
A. The Fifth Step in the Accounting Cycle: The Trial Balance • proving the ledger—add all debit and credit balances to see if the two totals equal • trial balance—a list of all the account names and their current balances B. Finding and Correcting Errors 1. Finding Errors • transposition error—two digits within an amount are reversed, or transposed • slide error—a decimal point is moved by mistake 2. Correcting Entries • correcting entry—a journal error that is recorded to fi x an error
Posting Journal Entries to General Ledger Accounts
PART A Accounting Vocabulary (7 points)
Directions: Using terms from the following list, complete the sentences below. Write the letter of the term you have chosen in the space provided.
A 0. A must be made when an error in a journal entry is discovered after posting. 1. Adding all the debit balances and all the credit balances of accounts in the ledger to
determine whether the two totals are equal is called . 2. A results when two numbers are accidentally reversed. 3. The process of transferring the information in a journal entry to an individual
account is called . 4. are the accounting stationery used to record fi nancial information about
specifi c accounts. 5. A is a proof of the equality of total debits and total credits. 6. When an amount such as $90 is written as $900, a error has occurred. 7. A is a book or fi le that contains the pages or cards for the accounts used by
a business.
PART B The Posting Process (12 points)
Directions: Read each of the following statements to determine whether the statement is true or false.
Answer
T F 0. Posting to the ledger is the fourth step in the accounting cycle. T F 1. The accounts of a business are kept in a special book called a ledger. T F 2. You can easily see the increases and decreases taking place in the accounts of a
business by looking at the general journal entries. T F 3. Errors discovered after posting has occurred should be corrected by drawing a
line through the incorrect item and writing the correction directly above. T F 4. An account may be opened by writing the account title and account number on
the account form. T F 5. All businesses do their posting daily. T F 6. A trial balance is prepared before posting. T F 7. To avoid forgetting a step in the posting process, always post from right to left. T F 8. The fi rst step in posting is to write the date of the journal entry in the Date
column of the account debited. T F 9. A line across the Debit balance column shows that an asset account has a zero
balance. T F 10. Every journal entry requires a posting to at least three ledger accounts. T F 11. The purpose of a trial balance is to prove the equality of the ledger. T F 12. If the trial balance is in agreement, there are no errors in the accounting
records.
Concept Assessment ■ 1
Total Points 57 Student’s Score
A. correcting entry C. ledger account forms E. proving the ledger G. transposition error B. ledger D. posting F. slide H. trial balance
Directions: 1. Open the ledger account by writing the account title and account number, 105.2. Record the account balance of $450 as of June 1 of the current year.3. Assume the following transactions have been recorded on page 1 of the general
journal. The transactions that follow affect the account, Accounts Receivable—Amy Anderson. Post these transactions to the account of Amy Anderson.
Date Transaction June 2 Received $200 from Amy Anderson on account. 5 Completed services for Amy Anderson and billed her $70. 21 Received a check for $320 from Amy Anderson to apply to her account. 29 Sent Invoice 417 to Amy Anderson for services completed, $90.
Does error Affect Correcting Does Error Affect Correcting Entry Error Trial Balance? Entry Required Error Trial Balance? Required?
0 Yes No 4
1 5
2 6
3 7
2 ■ Concept Assessment
PART D Correcting Errors (14 points)
Directions: Several errors are described below. Use the form below. For each error:1. Determine whether the error will affect the totals of the trial balance.2. Indicate whether the error requires a correcting entry.
The fi rst item has been completed for you as an example.Errors: 0. A $50 debit was not posted to the Offi ce Supplies account. 1. A $200 purchase of store equipment was journalized and posted to Store Supplies. 2. A $30 job completed for Sarah James was recorded and posted to James Scott’s account. 3. A $500 check received as payment for services was journalized and posted to the capital
account. 4. A $69 debit to the withdrawals account was posted as $96. 5. A $100 debit to Cash in Bank was posted as $10. 6. After posting a $75 credit to a creditor’s account, the account balance was incorrectly
calculated. 7. A $25 debit to the Store Supplies account was posted as a credit.
PART B Multiple ChoiceDirections: Choose the letter of the correct answer and write it in the space provided.
Answer
1. The fi rst step in the posting process is to:(A) post the amount.(B) enter the page number in the Posting Reference
column of the ledger account.(C) enter the date in the Date column of the account debited.(D) compute the new balance.
2. If the total debits and total credits of the trial balance do not agree, the fi rst step in locating the error is to:(A) re-add the debit and credit columns.(B) fi nd the amount you are out of balance.(C) make certain you copied the amount correctly from the
ledger account to the trial balance.(D) divide the amount you are out of balance by 2.
3. All of the following about a trial balance are true except:(A) it includes all general ledger accounts.(B) it includes only the permanent accounts.(C) it is completed after posting.(D) it proves the ledger.
4. Transposition errors are evenly divisible by the number:(A) 2(B) 3(C) 4(D) 9
5. Which of the following steps in the accounting cycle is in the correct order?(A) Post to the ledger, prepare a trial balance, journalize,
analyze each transaction, and collect source documents.(B) Analyze each transaction, journalize, collect source
documents, prepare a trial balance, and post.(C) Collect and verify source documents, analyze each
transaction, journalize each transaction, post to the ledger, and prepare a trial balance.
(D) Collect and verify source documents, analyze each transaction, prepare a trial balance, journalize each transaction, and post to the ledger.
Posting Journal Entries to General Ledger AccountsPROBLEM 7–1 Opening an Account with a BalanceOpen the following accounts as of May 1 of the current year.
Account Name Account Number Balance Cash in Bank 101 $3,000.00 Accts. Pay.—Knight Systems 206 50.00 Jamie Parker, Capital 301 4,000.00 Jamie Parker, Withdrawals 302 600.00 Professional Fees 401 1,800.00 Advertising Expense 501 200.00
PROBLEM 7–6 Recording and Posting a Correcting EntryA $200 purchase of offi ce supplies was incorrectly journalized and posted to the Store Supplies account. Record and post the necessary correcting entry as of April 15. Use Memorandum 32 as your source document.