Chapter 12Chapter 12

Posting to General and Subsidiary Ledgers

OBJECTIVES: OBJECTIVES:

Define accounting terms relating to posting to ledgers Identify accounting practices related to posting to

ledgers Post from a purchase journal to an accounts payable

ledger Post from a cash payments journal and general journal

to an accounts payable ledger Post from a sales journal to an accounts receivable

ledger Post from a cash receipts journal to an accounts

receivable ledger Post from a cash payments journal and a general journal

to a general ledger Post journal totals to a general ledger

Subsidiary Ledgers, p. 272Subsidiary Ledgers, p. 272

A business needs to know the amount owed each vendor as well as the amount to be collected from each charge customer. Therefore, a separate account is needed for each vendor and each customer. Omni keeps a separate ledger for vendors and a separate ledger for customer. Each separate ledger is summarized in a single general ledger account. A ledger that is summarized in a single general ledger account is called a subsidiary ledger. A subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account is called an accounts payable ledger. A subsidiary ledger containing only accounts for charge customers is called an A/R ledger. Total amounts are summarized in single general ledger accounts: A/P for vendors and A/R for charge customers.

An account in a general ledger that summarizes all accounts in a subsidiary ledger is called a controlling account.

Posting – look at CHART OF ACCOUNTS – pg 219Posting – look at CHART OF ACCOUNTS – pg 219

Posting sorting and summarizing journal transactions into individual ledger accounts.

The size of a business determines how many ledgers they will have.

GENERAL LEDGER: – This ledger contains all the accounts necessary to prepare

the financial statements.– Contains a controlling account for each subsidiary ledger.

CONTROLLING ACCOUNT: account in general ledger that summarizes all accounts of the corresponding subsidiary ledger– Balance equals total of all account balances in its related

subsidiary ledger– Ex) Accounts Payable and Accounts Receivable

SUBSIDIARY LEDGERSUBSIDIARY LEDGER

A set of ledger accounts that are summarized in a single general ledger controlling account

Gives the details of a general ledger account.– Business needs to know the amount owed to each

vendor + amount that needs to be collected from each charge customer

– Separate account is needed for each vendor and each charge customer

Accounts Payable Ledger - contains an account for each vendor from whom items are purchased ON ACCOUNT.

Accounts Receivable Ledger - contains an account for each CHARGE customer.

Ch 12-1: Posting to an Accounts Payable LedgerCh 12-1: Posting to an Accounts Payable Ledger

Accounts Payable in the GL Controlling account 3 digit numbers: Account numbers all start with 2 –Liability

– 2nd two numbers – vendor number Number assignment method is same as Encore Vendors are arranged alphabetically in the ledger. Accounts have a normal CREDIT balance Procedure for adding new accounts is the same as

previously used. 3-column form with CREDIT balance column

ACCOUNTS PAYABLE LEDGER AND GENERAL ACCOUNTS PAYABLE LEDGER AND GENERAL LEDGER CONTROLLING ACCOUNTLEDGER CONTROLLING ACCOUNT

Total of all vendor account balances in the Accounts Payable Ledger must equal balance of Accounts Payable Account in general ledger (controlling account).

STARTING A NEW PAGE FOR A VENDOR IN AN STARTING A NEW PAGE FOR A VENDOR IN AN ACCOUNTS PAYABLE LEDGERACCOUNTS PAYABLE LEDGER

5

1

3

4

2

3. Write the date.

1. Write the vendor name.

5. Place a check mark in the Post. Ref. column (not posted)

2. Write the vendor number.

6. Write the account balance.

6

4. Write Balance. (carried over from last month/page)

TO OPEN: 1. Write the vendor’s name on the account title.2. Assign the account a number.********************************

Carrying Balances from Page to PageCarrying Balances from Page to Page

In a Journal, use ‘Carried Forward’ and ‘Brought Forward’

In a ledger, use ‘Balance’

Posting from the Purchases JournalPosting from the Purchases Journal

Post amounts individually to the Accounts Payable Subsidiary Ledger to individual vendors’ accounts (very often).– Vendor subsidiary ledger CREDIT

Post column TOTALS to general ledger, controlling account (at of end of month).– Purchases - DEBIT– Accounts Payable - CREDIT

Steps in Posting to LedgerSteps in Posting to Ledger

1. Write the date in the date column2. Write the journal page in the Post

Ref. Column of the account.3. Write the credit or debit amount.4. Find the new credit balance of the

account.5. Write the vendor number in the Post

Ref column of the journal.

POSTING FROM A PURCHASES JOURNAL TO AN POSTING FROM A PURCHASES JOURNAL TO AN ACCOUNTS PAYABLE LEDGERACCOUNTS PAYABLE LEDGER

Lesson 12-1, page 276Lesson 12-1, page 276

1 23

4

5

3. Write the credit amount.

1. Write the date.

4. Calculate and write the new account balance.

2. Write the journal page number.

5. Write the vendor number.

TTERMS REVIEWERMS REVIEWsubsidiary ledger

accounts payable ledger

accounts receivable ledger

controlling account

******************************

TO DO:

Work Together, page 277

On your own, page 277

Lesson 12-1, page 277Lesson 12-1, page 277

Chapter 12-2Chapter 12-2

Posting from Other Journals to an Accounts Payable Ledger

Posting from the Cash Payments JournalPosting from the Cash Payments Journal

Post individually - OFTEN– General Debit and Credit Columns to General Ledger– Accounts Payable DEBIT Column to vendor’s

subsidiary ledger accounts Post Totals – END OF MONTH

– Accounts Payable Column TOTAL to Accounts Payable Account as Debit.

– Cash Column TOTAL to Cash Account as Credit.

POSTING FROM A CASH PAYMENTS JOURNAL TO AN POSTING FROM A CASH PAYMENTS JOURNAL TO AN ACCOUNTS PAYABLE SUBSIDIARY LEDGERACCOUNTS PAYABLE SUBSIDIARY LEDGER

Lesson 12-2, page 278Lesson 12-2, page 278

3. Debit

1. Date

4. Account Balance

2. Journal Page Number

5. Vendor Number

3

2

15

4

POSTING FROM A CREDIT ENTRY FROM A GENERAL POSTING FROM A CREDIT ENTRY FROM A GENERAL JOURNAL TO AN ACCOUNTS PAYABLE LEDGERJOURNAL TO AN ACCOUNTS PAYABLE LEDGER

3. Credit

1. Date

4. Account Balance

2. Journal Page Number

5. Vendor Number

1 5

4

2 3

****Each transaction is posted individually****

Completed Accounts Payable Ledger PAGE 280 All vendor accounts make up complete Accounts

Payable Ledger

After each Acct. Pay. ledger has been posted for the month, the credit balance in each vendor acct represents the amount the business owes each vendor

How much is owed to vendor # 230? To Foxfire Supply? How much has Omni paid to African Importers? When did Omni make a payment to vendor no.

240?

PROVING THE ACCOUNTS PAYABLE LEDGERPROVING THE ACCOUNTS PAYABLE LEDGER

Lesson 12-2, page 281Lesson 12-2, page 281

Schedule of Accounts Payable: *List all vendors account names and balances.*The total must equal the Accounts Payable account in general ledger controlling account

TTERMS REVIEWERMS REVIEWschedule of accounts payable

TO DO:

Work Together, pg 282

On your own, pg 282

Lesson 12-2, page 282Lesson 12-2, page 282

CHAPTER 12-3CHAPTER 12-3

Posting to an Accounts Receivable Ledger

Accounts Receivable Subsidiary LedgerAccounts Receivable Subsidiary Ledger

Controlling account is Accounts Receivable Account numbers all start with 1- Assets Customers are arranged alphabetically in the

ledger. Accounts have a normal DEBIT balance. Total of Accounts Receivable Ledger must

equal balance of Accounts Receivable Account in the general ledger (controlling account).

ACCOUNTS RECEIVABLE LEDGER AND GENERAL ACCOUNTS RECEIVABLE LEDGER AND GENERAL LEDGER CONTROLLING ACCOUNTLEDGER CONTROLLING ACCOUNT

Lesson 12-3, page 283Lesson 12-3, page 283

Total amount to be collected from all charge customers is summarized in a single general ledger account, Accounts Receivable

OPENING ACCOUNTS RECEIVABLE LEDGER FORMSOPENING ACCOUNTS RECEIVABLE LEDGER FORMS

1. Customer Name

1

2. Customer Number

2

Lesson 12-3, page 284Lesson 12-3, page 284

*3-column form with DEBIT balance column

Posting from Sales JournalPosting from Sales Journal

Post amounts individually to each customer’s account in subsidiary ledger OFTEN

Post Column Totals End of month– Accounts Receivable column total to General

Ledger Accounts Receivable Account as debit. (controlling account)

– Sales and Sales Taxes Payable column totals to General Ledger accounts as credit.

POSTING FROM A SALES JOURNAL TO AN POSTING FROM A SALES JOURNAL TO AN ACCOUNTS RECEIVABLE LEDGERACCOUNTS RECEIVABLE LEDGER

Lesson 12-3, page 285Lesson 12-3, page 285

1

5

3. Write the debit amount.

1. Write the date.

4. Calculate and write the new account balance.

2. Write the journal page number.

5. Write the customer number.

4

32

TO DO: Work Together, pg 286 On your own, pg 286 App 12-1, 12-2, 12-3

REVIEW: REVIEW:

What accounts are contained in an accounts payable ledger?

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

What is the title of the balance amount column of an accounts payable ledger form?

In which column of the cash payments journal are the amounts that are posted individually to the accounts payable ledger?

CHAPTER 12-4CHAPTER 12-4

Additional Posting to an Accounts Receivable Ledger

Posting from Cash Receipts JournalPosting from Cash Receipts Journal

Post individually - OFTEN– General Debit and Credit Columns to General

Ledger.– Accounts Receivable Credit Column to customer

accounts as credit.

Post Totals – END OF MONTH– Accounts Receivable, Sales, and Sales Taxes

Payable Column TOTALS to General Ledger Accounts Credit.

– Cash Column TOTAL to Cash Account as Debit.

POSTING FROM A CASH RECEIPTS JOURNAL TO AN POSTING FROM A CASH RECEIPTS JOURNAL TO AN ACCOUNTS RECEIVABLE LEDGERACCOUNTS RECEIVABLE LEDGER

Lesson 12-4, page 287Lesson 12-4, page 287

3. Credit

1. Date

4. Account Balance

2. Journal Page Number

5. Customer Number

5

1

2

3

4

Completed Accounts Receivable Ledger – pg 288 DEBIT amount = TOTAL Amount owed to business How much is owed by customer # 160? How many pymts has Children’s Paradise made?

Schedule of accounts receivable – pg 289– Listing of all customer accounts, account balances,

and total amount due from all customers– Prepared after all entries are posted– Total of balances = Accounts Receivable, general

ledger account (controlling account)

PROVING THE ACCOUNTS RECEIVABLE LEDGERPROVING THE ACCOUNTS RECEIVABLE LEDGER

Lesson 12-4, page 289Lesson 12-4, page 289

Schedule of Accounts Receivable:Schedule of Accounts Receivable: **Proves the accuracy of the accounts receivable subsidiary ledger.*The total of this statement must match balance of Accounts Receivable account in general ledger.

TTERMS REVIEWERMS REVIEWschedule of accounts receivable

TO DO:

Work Together, pg 290

On your Own, pg 290

App 12-4

Lesson 12-4, page 290Lesson 12-4, page 290

Posting from JOURNALS to LEDGERS: Posting from JOURNALS to LEDGERS:

Cash Payments– Accounts Payable ledger– General Ledger

Cash Receipts– Accounts Receivable ledger– General ledger

Purchases– Accounts Payable ledger– General ledger

Sales– Accounts Receivable ledger– General ledger

General– General Ledger– Accounts Payable ledger

CHAPTER 12-5: CHAPTER 12-5: Posting from Journals to a General LedgerPosting from Journals to a General Ledger

FROM SPECIAL JOURNALS– Individual General amount DR and CR columns– MONTHLY TOTAL Cash DR/CR– MONTHLY TOTAL Sales Tax Payable– MONTHLY TOTAL Sales CR– MONTHLY TOTAL Purchases DR– MONTHLY TOTAL Accounts Receivable/Payable DR/CR

FROM GENERAL JOURNAL– Individual DR and CR columns

Omni uses 4-column general ledger form– DR, CR, DR balance, CR balance

STARTING A NEW PAGE FOR AN ACCOUNT IN A STARTING A NEW PAGE FOR AN ACCOUNT IN A GENERAL LEDGERGENERAL LEDGER

5

1

3

4

2

3. Write the date.

1. Write the account title.

5. Place a check mark in the Post. Ref. column.

2. Write the account number.

6. Write the account balance.

6

4. Write Balance.

Lesson 12-5, page 291Lesson 12-5, page 291

POSTING FROM THE GENERAL AMOUNT COLUMNS OF POSTING FROM THE GENERAL AMOUNT COLUMNS OF A CASH PAYMENTS JOURNAL TO A GENERAL LEDGERA CASH PAYMENTS JOURNAL TO A GENERAL LEDGER

3. Write the debit amount.

1. Write the date.

4. Calculate and write the new account balance.

2. Write the journal page number.

5. Write the general ledger account number in the Post. Ref. column of the journal.

1

4

3

Lesson 12-5, page 292Lesson 12-5, page 292

52

POSTING A DEBIT ENTRY FROM A GENERAL POSTING A DEBIT ENTRY FROM A GENERAL JOURNAL TO A GENERAL LEDGERJOURNAL TO A GENERAL LEDGER

Lesson 12-5, page 293Lesson 12-5, page 293

3. Write the amount.

1. Write the date.

4. Calculate and write the new account balance.

2. Write the journal page number.

5. Write the general ledger amount number in the Post. Ref. column of the general journal.

1

4

35

2

POSTING A CREDIT ENTRY FROM A GENERAL POSTING A CREDIT ENTRY FROM A GENERAL JOURNAL TO A GENERAL LEDGERJOURNAL TO A GENERAL LEDGER

Lesson 12-5, page 294Lesson 12-5, page 294

1

3

5

3. Write the amount.

1. Write the date.

4. Calculate and write the new account balance.

2. Write the general journal page number.

5. Write the general ledger account number.

2

4

TO DO: Work together, pg 295 On your own, pg 295

CHAPTER 12-6CHAPTER 12-6

Posting Totals to a General Ledger

Posting Totals of a Sales Journal to a General LedgerPosting Totals of a Sales Journal to a General Ledger

End of month Prove and Rule Post totals of Special Amount Columns

SALES journal:

TOTAL: – Acct Rec DR– Sales CR– Sales Tax Payable CR

POSTING TOTALS OF A SALES JOURNAL TO A POSTING TOTALS OF A SALES JOURNAL TO A GENERAL LEDGERGENERAL LEDGER

Lesson 12-6, page 296Lesson 12-6, page 296

3. Column Total

1. Date

4. Account Balance

2. Journal Page Number

5. Account Number

*In parentheses BELOW amount column total

1

1

1

1

3

3

3

3

4

4

4

2

2

2

2

5

5

5

5

POSTING TOTALS OF A PURCHASES JOURNAL TO A POSTING TOTALS OF A PURCHASES JOURNAL TO A GENERAL LEDGERGENERAL LEDGER Purchases journal – one special amount column: Purchases DR; Accounts Payable CR Total and rule at end of each month Post to general journal in 2 general ledger

accounts

POSTING TOTALS OF A PURCHASES JOURNAL TO A POSTING TOTALS OF A PURCHASES JOURNAL TO A GENERAL LEDGERGENERAL LEDGER

Lesson 12-6, page 297Lesson 12-6, page 297

3. Column Total

1. Date

4. Account Balance

2. Journal Page Number

5. Account Number

1

1

1

3

3

3

4

4

2

2

2

5

5

5

POSTING TOTALS OF THE SPECIAL AMOUNT POSTING TOTALS OF THE SPECIAL AMOUNT COLUMNS OF A CASH RECEIPTS JOURNAL TO A COLUMNS OF A CASH RECEIPTS JOURNAL TO A GENERAL LEDGERGENERAL LEDGER

Cash Receipts Journal: 4 special amount columns; + General DR and General CR

Acct Rec CR - TOTALS Sales CR - TOTALS Sales Tax Payable CR - TOTALS Cash DR - TOTALS General DR/CR – INDIVIDUAL (check mark at bottom)

Prove DR=CR, rule, at end of each month Post totals to individual general ledger accounts

POSTING TOTALS OF THE SPECIAL AMOUNT POSTING TOTALS OF THE SPECIAL AMOUNT COLUMNS OF A CASH RECEIPTS JOURNAL TO A COLUMNS OF A CASH RECEIPTS JOURNAL TO A GENERAL LEDGERGENERAL LEDGER

Lesson 12-6, page 298Lesson 12-6, page 298

3. Column Total

1. Date

4. Account Balance

2. Journal Page Number

5. Account Number

1

1

1

1

1

2

2

2

2

2

4

4

4

43

3

3

3

35

5

5

5

5

POSTING TOTALS OF A CASH PAYMENTS JOURNAL POSTING TOTALS OF A CASH PAYMENTS JOURNAL TO A GENERAL LEDGERTO A GENERAL LEDGER

Cash Payments Journal: 2 special amount columns + General DR/CR

Account Payable DR - TOTALS Cash CR - TOTALS General DR/CR – INDIVIDUAL (Check mark) TOTAL, Prove DR=CR, rule, at end of each month Post TOTALS to individual general ledger accounts

POSTING TOTALS OF A CASH PAYMENTS JOURNAL POSTING TOTALS OF A CASH PAYMENTS JOURNAL TO A GENERAL LEDGER – PG 298TO A GENERAL LEDGER – PG 298

Lesson 12-6, page 300Lesson 12-6, page 300

3. Column Total

1. Date

4. Account Balance

2. Journal Page Number

5. Account Number

1

1

1

3

3

3

4

4

2

2

2

5 5

5

5

SUMMARY: SUMMARY:

Omni posts vendor and customer accounts periodically throughout the month so that balance of subsidiary ledgers are up to date

Amounts in General Debit / Credit, Accounts Payable, and Accounts Receivable need to be posted individually!

Special Amount Columns Totals to be posted at end of month

Prove, Rule, and Post to General ledger at end of month need to be brought up to date only when preparing financial statements (before trial balance can be prepared)

Order of Posting JournalsOrder of Posting Journals

1. Sales Journal

2. Purchases Journal

3. General Journal

4. Cash Receipts Journal

5. Cash Payments Journal

**This order USUALLY puts amounts in correct chronological order, but there may be exceptions depending on how frequently items are posted during the month***

TO DO: TO DO:

Work Together, pg 302 On your own, pg 302 App Problems 12-5, 12-6

Ch 12 QUIZ – WEDNESDAY THURSDAY – Finish Summary Ch 12 TEST - FRIDAY