Kent’s Go Karts Chart of Accounts

LESSON 4 -1 Preparing a Chart of Accounts

Bookkeeping IN THE Existent World & INTERNET ACTIVITY What’southward My Balance? Record Sales Book at Amazon. com �Answer the two critical thinking questions. �Internet Activity www. sec. gov

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 exist able to procedure 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 spider web site might not be able to handle the high volume of sales, and some customers might not come up back to effort again.

SEC Securities Deed of 1933 Securities Exchange Act of 1934 � Two acts that created the SEC What are the purposes of these two acts? ?

PREVIOUSLY…. Define Bookkeeping terms related to posting from a journal to a general ledger. Identify accounting concepts and practices related to posting from a journal to a full general ledger Prepare a nautical chart of accounts for a service business concern organized every bit a proprietorship

REMEMBER! Each business relationship title used for recording entries in a journal also represents an business relationship in a group of accounts. The grouping of accounts is not in random club. There is a standard manner of organizing this group of accounts.

RELATIONSHIP OF A T Business relationship TO AN ACCOUNT FORM page 91 seven • The general ledger account form also contains the T Balance columns previously shown in the accounting equation, residue canvas, and T account. • The benefit of using the balance-ruled account form is that LESSON an upwards to date account balance is always available. iv -1

Chart OF ACCOUNTS 8 • A group of accounts is called a ledger. • A ledger that contains all accounts needed to prepare financial statements is chosen a general ledger. • The number assigned to an account is called an account number LESSON iv -ane

ACCOUNT NUMBERS The first digit of each account number shows the general ledger division in which the account is located. The second two digits indicate the location of each account inside a full general ledger division. The 50 in the business relationship number for Supplies indicates that the account is located between business relationship number 140 and 160. (Sequence of ten southward) 9 Example-the asset division accounts are numbered in the 100 s. Therefore, the number for the asset business relationship, Supplies begins with a i. LESSON iv -1

REMEMBER…. Expenses are listed in Alphabetical Club Assets are listed by the guild of their liquidity.

OPENING AN Account IN A GENERAL LEDGER 1. Write the account championship. LESSON 2. Write the business relationship number. Remember: The general ledger accounts must be opened before they tin exist used. 2 eleven 1 folio 94 4 -1

ALSO… • Each account is kept on a carve up card • Ledger cards are kept in chart of accounts number society. • A new menu tin exist inserted for a new account

LESSON iv -2 Posting Separate Amounts from a Journal to a General Ledger

Accounting IN THE Real WORLD & Net Activity What’due south My Balance? Record Sales Volume at Amazon. com �Answer the two disquisitional thinking questions. �Internet Activity www. sec. gov

TERMS REVIEW Ledger-A grouping of accounts full 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 full general ledger, assigning business relationship numbers, and keeping records electric current opening an account-Writing an account title and number on the heading of an account LESSON 4 -ane

TODAY… Post separate amounts from a journal to a general ledger. Posting-transferring data from a periodical entry to a ledger In this lesson, we volition now transfer the information from the periodical entries, recorded in Chapter 3, to the general ledger accounts nosotros just opened. This process is chosen Posting.

POSTING AN AMOUNT FROM A General DEBIT Column page 96 17 1 v iii iv 1. Write the engagement. two. Write the journal page number. 3. Write the debit amount. 2 four. Write the new account remainder. v. Return to the periodical and write the account number. LESSON 4 -2

POSTING A 2d AMOUNT TO AN Account page 97 18 one three 5 2 iv 1. Write the date. 2. Write the journal page number. iii. Write the debit corporeality. 4. Write the new account rest. five. Return to the journal and write the account number. LESSON 4 -2

POSTING AN AMOUNT FROM A General CREDIT COLUMN page 98 nineteen v 1 iii two 4 1. Write the engagement. 2. Write the journal folio number. iii. Write the credit corporeality. 4. Write the new account residual. 5. Render to the periodical and write the business relationship number. LESSON four -2

20 page 99 TERM REVIEW Posting-transferring data from a journal entry to a ledger account. (p. 96) LESSON 4 -two

APLIA Piece of work Together four -2 Own your Own 4 -ii Awarding Trouble iv -2

Go out TICKET Listing the v steps of posting from the general columns of a journal to the general ledger? Are the totals of the General Debit and Full general Credit columns posted? Why or why not? Answers: 1. Write the appointment 2. Write the journal page number. 3. Write the debit amount. 4. Write the new business relationship balance 5. Return to the journal and write the account number No. Each separate amount in the General Debit and Full general Credit columns of a periodical is posted to the account written in the Account Title column.

BELL RINGER Take this time to finish upwards the “What’due south My Rest Scenario” Piece of work on Drill #4 Handout. This should exist a review of the pervious two classes Turn in to Mr. K when done.

LESSON 4 -3 Posting Cavalcade Totals from a Periodical to a General Ledger

OBJECTIVES FOR TODAY…. This lesson is about posting journal column totals. � Why are journal columns totaled? To bear witness equality of debits and credits. In this lesson, we will mail the totals of the special amount columns.

LET ME Explicate… The totals brought forward from the pervious folio of a journal are not posted individually. Remember that divide amounts in the special amount columns are not posted individually. Mail service Reference Columns � An entry in the business relationship can exist traced to: Its source in the periodical Where it was posted into the account OR if posting was interrupted, the bookkeeping personnel can easily see which entries in the journal yet demand to be posted. A bank check marking in the Mail Ref column means that nothing on that line is posted individually.

CHECK MARKS SHOW THAT AMOUNTS ARE Not POSTED page 100 27 Check marking indicates that amounts ARE Non posted individually. Check marker indicates that full general amount column totals ARE NOT posted. LES SON 4 -3

POSTING THE Full OF THE SALES CREDIT COLUMN The type of journal amount column an amount is recorded in determines how that corporeality is posted to the general ledger. The amounts in the special corporeality columns are posted as part of the total of the corporeality column Posting totals saves time and reduces errors because but the total of many of the same kinds of transactions must exist posted, as opposed to posting each amount each fourth dimension a oft occurring transaction is journalized. Here are the five steps for posting the full of the sales credit column.

POSTING THE TOTAL OF THE SALES CREDIT COLUMN page 101 29 3 i 5 2 4 one. Write the date. 2. Write the journal folio number. three. Write the cavalcade total. iv. Write the new account balance. 5. Return to the journal and write. LES SON the account number. 4 -3

POSTING THE TOTAL OF THE CASH DEBIT COLUMN page 102 30 1 3 5 2 iv 1. Write the date. 2. Write the periodical page number. iii. Write the column total. four. Write the new account balance. five. Return to the journal and write. LES SON the business relationship number. four -iii

POSTING THE TOTAL OF THE Greenbacks CREDIT Column page 103 3 31 one five 2 4 1. Write the date. 2. Write the journal page number. three. Write the column total. 4. Write the new account balance. 5. Render to the journal and write. LES SON the business relationship number. four -three

REMEMBER Whenever the debits in an business relationship exceed the credits, the account residue is a debit. Whenever the credits in an account exceed the debits, the account balance is a credit.

APLIA-4 -3 Piece of work TOGETHER AND ON YOUR OWN iv -3 APPLICATION PROBLEM

LESSON 4 -4 Completed Accounting Forms and Making Correcting Entries

REMINDER!!!! WHEN MANUAL JOURNAL ENTRIES ARE Fabricated, THEY ARE Commonly ENTERED IN INK SO THAT THE RECORDS ARE More than PERMANENT. THE FOUR Step Process Volition Once again BE FOLLOWED TO Tape TRANSACTIONS IN THE JOURNAL.

Journal PAGE WITH POSTING COMPLETED page 105 36 With the exception of the Totals line, discover that the Post Ref. Column is completely filled in with either an account number or a check mark.

Explanation Examine the ledger accounts illustrated on this page (106 -107) � Notice that in the Supplies business relationship, three entries are from the start folio of the periodical and one is from the 2d page. � Notice that in the Accounts Payable-Supply Depot, the debit entry on August 11 reduced the credit balance of the account.

QUESTION… Does the one entry in the Sales account mean that only 1 sale was made all calendar month? � Answer: No, it is the posting of the Sales Credit Column total, which includes may sales during the calendar month.

QUESTION #2… How tin can you tell whether this is a new company or not? Answer: There was no previous balance in the owner’due south capital account, and then it is a new company.

QUESTION #3 & # 4… How tin yous tell whether any of the entries on this folio are the posting of column totals? Answer: You cannot tell just from the posting entries but the credit to sales in a column full. Why are there no special corporeality columns in the periodical for whatever of the expense accounts? Respond: Because the accounts do non have frequent entries during the month.

MEMORANDUM FOR A CORRECTING ENTRY page 108 41 A correcting entry is made to correct an mistake in the ledger. The error is not merely crossed out. A Memorandum is used equally the source document for a correcting entry. A correcting entry requires that the error start be analyzed to determine what accounts demand to exist debited and credited to correct the error. Once this analysis is done, an entry can be recorded in a journal. LES SON 4 -four

Periodical ENTRY TO RECORD A CORRECTING ENTRY 1 Date 42 November xiii. Discovered that a payment of cash for advertising in October was journalized and posted in mistake as a debit to Miscellaneous Expense instead of Advertisement Expense, $140. 00. Memorandum No. 15. folio 108 Debit 2 4 Source Certificate Credit iii LES SON iv -4

APLIA • WORK TOGETHER 4 -four • OWN YOUR Own 4 -4 • WA NT A Challenge? *Effort the mastery problem

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 Accept Developed.