Accounting Chapter 4
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Because an account form as columns for the debit and credit balance of an account, it is often referred to as the balance-ruled account form.
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Cash can be proved at any time.
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Each amount in the Debit and Credit columns of a general journal is posted to the account written in the Account Title column.
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If the cash balance in the checkbook equals the cash balance in the Cash account, cash is proved.
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Journal errors discovered before entries are posted are corrected by first preparing a memorandum describing the correction to be made.
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Posting sorts journal entries so that all debits and credits affecting each account are brought together in one place.
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Recording the posting references is always the last step in the posting procedure.
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TechKnow Consulting arranges expense accounts in chronological order in its general ledger.
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The Cash account is the first asset account and is numbered 100.
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The asset division accounts for TechKnow Consulting are numbered in the 100s.
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The first digit of account numbers for accounts in the owners equity ledger division is 3.
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The first step to post an amount form the Credit column is to write the date in the Date column of the account.
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The last two digits in a 3-digit account number indicate the general ledger division of the account.
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The only reason for the Post. Ref. column of the journal indicates that posting for that line still needs to be completed.
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The second division of TechKnow Consulting's chart of accounts is the owners equity division.
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The two steps for opening an account are writing the account title and recording the balance.
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When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515.
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When making a correcting entry, the same four steps are followed as when making any journal entry.
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Whenever the credits in an account exceed the debits, the balance is a credit.
ledger
a group of accounts
correcting entry
a journal entry made to correct an error in a previous journal entry
general ledger
a ledger that contains all accounts needed to prepare financial statements
proving cash
determining that the account of cash agrees with the balance of the cash account in the accounting records
account number
the number assigned to an account
file maintenance
the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records currents
posting
transferring information from a journal entry to a ledger account
opening an account
writing an account title and number on the heading of an account
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A blank in the Post. Ref. column of the journal indicates that posting for that line sill needs to be completed.
