Chapter 12- Posting to General and Subsidiary Ledgers

Subsidiary Ledger- A ledger that is summarized in a single general ledger

We will be using and accounts payable and accounts receivable ledger

Controlling Account- An account in a general ledger that summarizes all accounts in a subsidiary ledger

We will be using the accounts payable and receivable accounts

Explain where controlling accounts are maintained

In the subsidiary ledger

What us the relationship between a controlling account and a subsidiary ledger?

The balance of controlling accounts equal the total of all account balances in its related subsidiary ledger

Indentify in writing the two schedules that we will prepare

We will prepare a schedule of accounts payable and a schedule of accounts receivable

Rules for posting a journal's column totals

1. Place a check mark in parentheses below the General Debit and Credit column totals to indicate that they are not posted


2. The general ledger account number of the account listed in the column heading is written in parentheses below the special amount column to show that the totals are posted

Why the 3-column account form used in the accounts receivable ledger has a Debit Balance column?

Accounts receivable are assets and assets have normal debit balances

What is the title of the balance amount column of the accounts payable ledger form and why is that title used?

Credit balance; becuse it's a liability

Starting a new page in the accounts payable ledger

1. Write the vendor name on the vendor line


2. Write the vendor number on the vendor no. line


3. Write the date in the date column


4. Write the word Balance in the item column


5. Place a check mark in the Post Ref column


6. Write the account balance in the Credit Balance column
   

Posting to the accounts receivable ledger

1. Write the date in the date column


2. Write the journal page number in the Post Ref column


3. Write debit amount in the debit column


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


5. Write the customer number in the Post Ref column

Is Anyone Listening?

Situation 2

I feel that the situation is unethical. Monitoring people's calls is an invasion of privacy. Although there shouldn't be any personal phone calls made unless there's an emergency, the calls that are made should be treated as if they were. Supposing an employee was discussing with a doctor about a medical condition and felt that they didn't want anyone to know about it. If that call was randomly monitored, than that employee's business would be known to others without permission. In the situation given, the manager overheard Ricki's weekend plans. This isn't as severe because she shouldn't have been making a personal phone call, but it is still invading her privacy. There are other ways to improve customer service quality, than monitored calls.

Chapter 11- Journalizing Sales and Cash Receipts

Sales Tax

Customer- A person or business to whom merchandise or services are sold

Sales Tax- A tax on a sale of merchandise or services



11-1 Journalizing Sales and Cash Receipts

Sales of Merchandise

Cash Sale- A sale in which cash is received for the total amount of the sale at the time of the transaction

Credit Cash Sale- A sale in which a credit card is used for the total amount of the sale at the time of the transaction

• Major bank-approved credit cards use VISA, MasterCard, and Discover Card

Cash and Credit Sales

Journalizing Cash and Credit Card Sales

1. Write the date


2. Place a check in the Account Title coulmn to show that no title is to be written


3. Write the cash register tape number


4. Place a check in the Post Ref. column to show no amounts on the line are to be posted individually


5. Write the sales amount


6. Write the sales tax amount


7. Write the cash amount

Cash Receipts On Account

Journalizing Cash Receipts On Account

1. Write the date


2. Write only the customer's name in the Account Title column


3. Write the receipt number


4. Write the credit amount


5. Write the debit amount

11-2 Proving and Ruling an Expanded Journal

Carrying Totals Forward on the Left Page (and Right Page)

Ruling an Expanded Journal to Carry Totals Forward

1. Rule a single line across all amount coulmns directly below the last entry to indicate that all the columns are to be added (left and right pages)


2. On the next line write the date in the date coulmn (left page)


3. Write the words Carried Forward in the Account Title column (left page)


4. Place a check in the Post Ref. column (left page)


5. Write each column total below the single line (both pages)


6. Rule double lines below the column totals across all amount columns to show that totals are correct (both pages)

Starting a New Expanded Journal Left (and Right) Page

Forwarding Totals to a New Journal Page

1. Write the journal page number
2. Write the date
3. Write the words Brought Forward in the Account Title column
4. Place a check mark in the Post Ref. column
5. Record the column totals brought forward

Proving and Ruling the Left (and Right) Page of an Expanded Journal at the End of the Month

Ruling an expanded journal at the end of the month

1. Rule a single line across all column totals
2. On the next line, write the date
3. Write the word Totals in the Account Title column
4. Write each column total below the single line
5. Rule double lines across all amount columns

Proprietorship or Partnership?

Proprietorship

• also known as a sole proprietorship



• business owned by one person



• easiest to get started



• owner recieves all profits



• unlimited liability



• 8 column journal

Partnership

• a business where two or more people put their assests and skills together



• share responsibilities and profits



• limited liability



• 11 column journal