Accounting - Chapter 7 - Posting

what is forwarding?

Forwarding is the process of continuing an account in a new account form by carrying forward the date and the balance from the completed date.

describe cross-referencing.

Cross-referencing is the recording of the journal page number in the account and the recording of the account number in the journal.

give the three reasons for cross-referencing.

1. Entries in the journal can be followed through to the accounts where they have been posted. 2. Entries in accounts can be easily traced back to their source in the general journal. 3. If the posting processes interrupted, it is easy to tell where to begin again. Journal amounts that have been posted will have the ledger account number posted.

give the five steps in posting that is performed in the ledger.

1. Record the date. Use the next unused line in the account. 2. Record the page number of the journal in the posting reference column of the account. Write the letter "J" for journal in front of the page number (e.x. J14) 3. Record the amounts. Debit amounts are entered into the debit columns and the credit amounts are entered into the credit columns. 4. Calculate the new balance and indicate whether it is a debit or credit in the Dr or Cr columns. 5. Enter the new account balance in the balance column.

how many columns does a balance column account have?

A balance column account has three money columns; one for credit amounts, one for credit amounts, and one separate column for the balances. This allows the balances to stand out more clearly.

what is the balance column account?

A second style of ledger account, that is more useful and convenient than the simple T-account.

describe the steps in opening an account.

Opening an account means preparing an account and placing it in its proper place in the ledger. The new account will need an account title, a name for which an account is prepared, and a number for identification.

what is posting?

Posting is the process of transferring information from the journal to the ledger.

give the one step in posting that is performed in the journal.

Record the number of the ledger account that received the posting. Enter this account number in the posting reference column on the same line as the amount posted.

name the first four steps in the accounting cycle.

The first four steps are: Transactions occur, accounting entries are recorded into the journal, journal entries are posted to the ledger accounts, and the ledger is balanced by the means of the trial balance.