accountingenglish2 (5)

Date PR Debit Credit Balance 500 Jan. 1 S5 500 ACCOUNTS RECEIV ABLE LEDGER
B aine C ompany
Da te PR De bit Cre dit Ba la nce 1,000 Ja N A C C O Un. T S16 E C E I V A B 1,000E D G E R R S5 LE L
Posting from the General Journal to Ledger Accounts
So far…
The ledger we have used is the general ledger, which holds the accounts reported in the financial statements. Posting from the journal to the general ledger is done monthly. The general ledger can tell us the general information of each account, but we can not learn the detailed information from it.
In contrast to the general journal, a special journal is designed to record a specific type of frequently occurring business transaction. When special journals are used, only those transactions that do not occur often enough are recorded in the general journal.
C ook C ompany
D a te Ja n. 25 PR S5 D e b it 415 C re d it B a la n ce 415
பைடு நூலகம்
A separate subsidiary ledger account above is used to show how much each individual customer owes.
A General Ledger Account
(1) (2) 1 Write the account name at the top of the ledger account form. Write the account number on the ledger account form. 2
Accounts Receivable Ledger
ACCOUNTS RECEIVABLE LEDGER
Adams Company After all items Date PR De bit Cre dit Ba la nce are posted, Ja RECEIVABLE LEDGER 1 S5 500 500 ACCOUNTSn. the balance in Baine Company the Accounts Date PR De bit Cre dit Ba la nce Receivable Ja RECEIVABLE LEDGER 1,000 1,000 ACCOUNTSn. 16 S5 controlling Cook Company account must Date PR De bit Cre dit Ba la nce 415 415 equal the sum Ja n. 25 S5 of the GENERAL LEDGER balances in Accounts Receivable No. 106 the subsidiary Date PR Debit Credit Balance ledger. Jan. 31 S5 1,915 1,915
Subsidiary Ledger
The subsidiary ledger is a book or file of accounts that provides supporting details on individual balances, the total of which appears in the general ledger. The general ledger is also called control account. It controls the subsidiary ledger. Consequently, total of the ending balances of all subsidiary accounts equal the ending balance of the control account.
8
Chapter
Ledgers and Journals
Learning Objectives:
After you have finished this chapter you should be able to: 1.Explain the definitions of general ledgers and subsidiary ledgers, and relationship between them 2.Explain two different types of journals 3.Understand four different types of special journals used in accounting system
Subsidiary Ledgers
Common Characteristic Amounts due from customers Amounts owed to creditors Controlling Account Accounts Receivable Accounts Payable Subsidary Ledger Accounts Receivable Ledger Accounts Payable Ledger
Sales Journal
SALES JOURNAL
Date 2006 Feb. 2 Jason Henry Account Debited Invoice Number 307 PR Page 1 Dr. A/R Dr COGS Cr. Sales Cr Inventory 450 315
Since each transaction yields a debit to Accounts Receivable and a credit to Sales, we need only one column for these two accounts. This column total is posted monthly.
Types of Special Journals
Transactions Sales on credit Purchases on credit Cash receipts Cash disbursements Journal Sales Journal Purchases Journal Cash Receipts Journal Cash Disbursements Journal
Now, let’s look at special journals.
Advantage of special journals
The most significant advantage of using special journals is the time saved in posting from the journals to the ledger.
Posting to a Ledger Account
(3) Enter the complete date (year, month, and day) in the date column. (4) Post the amount of the journal entries into the General Ledger account
Special journals organize transactions into common groups and require less time and effort for posting.
Sales Journal
On February 2, Jason Henry purchased $450 of merchandise on account from Outdoors Unlimited. The goods originally cost Outdoors $315. Record the entry in the Sales Journal. (Assume the use of a perpetual inventory system.)
General Ledger and subsidiary Ledger
Subsidiary Balances
=
Controlling Balance
2. Journals
The journal described so far is used to record all types of transactions--- sales on credit, purchases on credit, cash receipts, and cash disbursements and so on. This is quite a burdensome labor, especially for big-sized enterprises, where large number of transactions take place day by day, repeat again and again.