accounting ch 4

What is a correcting entry?

a journal entry made to correct an error in the ledger

account number

The number assigned to an account

What are the three steps for correcting an incorrect amount posted to an account?

(1) Draw a line through the incorrect amount. (2) Write the correct amount just above the correction in the same space. (3) Recalculate the account balance.

What are the three steps for correcting an amount posted to an incorrect column?

(1) Draw a line through the incorrect item in the account. (2) Record the posting in the correct amount column. (3) Recalculate the account balance

file maintenance

The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current

List the five steps of posting from the general columns of a journal to the general ledger.

(1) Write the date in the Date column of the account. (2) Write the journal page number in the Post. Ref. column of the account. (3) Write the amount in the Debit or Credit column. (4) Calculate and write the new account balance in the Balance Debit or Balance Credit column. (5) Return to the journal and write the account number in the Post. Ref. column of the journal.

list the two steps for an opening statement

1) write the account title after word Account in the heading 2) Write the account number after the words Account No. in the heading

ledger

A group of accounts

general ledger

A ledger that contains all accounts needed to prepare financial statements

correcting entry

If a transaction has been improperly journalized and posted to the ledger, the incorrect journal entry should be corrected with an additional journal entry, called a correcting entry.

Are the totals of the General Debit and General Credit columns posted? Why or why not?

No. Each separate amount in the General Debit and General Credit columns of a journal is posted to the account written in the Account Title column.

Describe the two parts of an account number.

The first digit indicates in which general ledger division the account is located. The second and third digits indicate the location of the account within that division.

Under what conditions will an account balance be a debit?

Whenever the debits in an account exceed the credits.

Which column totals of a journal are posted?

special amount columns

posting

transferring information from a journal entry to a ledger account

When is a correcting entry necessary?

when a transaction has been improperly journalized and posted to the ledger

Under what conditions will an account balance be a credit?

whenever the credits in an account exceed the debits.

opening an account

writing an account title and number on the heading of an account