Understanding Ledger Accounts and Posting Transactions in Accounting
This content discusses the importance of ledger accounts and the process of posting journal entries to the ledger in accounting. It explains the general ledger, double-entry system, essential points to consider, and provides illustrations of posting transactions in various accounts like cash, supplies, and accounts payable.
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Accounting 1 111 Chapter 9 Posting to the ledger accounts
Chapter 9: Posting to the ledger accounts This Chapter covers: 1- The purpose of using the ledger. 2- The procedures for posting the journal entries to the ledger. 3- Applying posting to ledger accounts.
General Ledger: The general ledger is the main accounting record of a business which uses double-entry bookkeeping. It will usually include accounts for such items, but we can group accounts in five basic categories: ( Assets, Liabilities, Owner s Equity, Revenues and Expenses) Posting: Posting is the process of recording amounts as credits, (right side), and amounts as debits, (left side), in the general journal. 2020
Double Entry System Debit Credit Assets Expenses Drawings Purchases Sales Returns Liabilities Capital Revenues Sales Purchases Returns DR CR DR CR - + + - 2020
Essential Points There is always a set of accounts on the debit side: 1- Expenses 2- Drawings 3- Purchases 4- Sales Returns There is always a set of accounts on the credit side: 1- Revenues 2- Sales 3- Purchases Returns 2020
Illustrate (9-1) You are required to post the following transactions in the ledger of cash account. Jan. 01: Invested cash BD27,000 for cash in the business. Jan. 03: Purchased equipment BD3,000 for cash. Jan. 05:Performed services to customer BD15,000 for cash. Jan. 07: Paid BD2,000 for salaries expense. Solution: CASH ACCOUNT Debit + Credit - Balance + Dr / - Cr Date Explanation Jan. 01 Jan. 03 Jan. 05 Jan. 07 27,000 27,000 24,000 39,000 37,000 3,000 15,000 2,000 2020
Illustrate (9-2): You are required to post the following transactions in the ledger of supplies account. Jan. 09: Bought supplies BD4,500 for cash. Jan. 11: Purchased supplies BD1,000 on account. Jan. 12: Supplies has been used for BD500. Solution: SUPPLIES ACCOUNT Debit + 4,500 1,000 Credit - Balance + Dr / - Cr 4,500 5,500 5,000 Date Explanation Jan. 09 Jan. 11 Jan. 12 500 2020
Illustrate (9-3): You are required to post the following transactions in the ledger of account payable. Jan. 12: Bought equipment BD1,200 on credit. Jan. 13: Purchased goods BD7,200 on account from Ahmed Est. Jan. 14: Returned goods to Ahmed for BD200 on credit. Jan. 16: Paid full amount due to Ahmed Est. Solution: ACCOUNT PAYABLE Debit - Credit + 1,200 7,200 Balance - Dr / + Cr 1,200 8,400 8,200 1,200 Date Explanation Jan. 12 Jan. 13 Jan. 14 Jan. 16 200 7,000 2020
Illustrate (9-4): You are required to post the following transactions in the ledger of account receivable. Jan. 17: Performed services to customer for BD9,400 on credit. Jan. 18: Sold goods BD12,800 to Abdulla on credit. Jan. 20: Returned goods from Abdulla for BD800 on credit. Jan. 21: Received full amount from Abdulla. Solution: ACCOUNT RECEIVABLE Debit + 9,400 12,800 Credit - Balance +Dr / - Cr 9,400 22,200 21,400 9,400 Date Explanation Jan. 17 Jan. 18 Jan. 20 Jan. 21 800 12,000 2020
Illustrate (9-5): You are required to post the following transactions in the ledger of sales account. Jan. 22: Sold goods BD10,000 to customer for cash. Jan. 23: Sold goods BD8,000 to Hamad on credit. Jan. 25: Issued invoice 1100 # for goods BD7,000. Solution: SALES ACCOUNT (always credit) Debit - Credit + 10,000 8,000 7,000 Balance -Dr / + Cr 10,000 18,000 25,000 Date Explanation Jan. 22 Jan. 23 Jan. 25 2020
Illustrate (9-6): You are required to post the following transactions in the ledger of purchases account. Jan. 26: Purchased goods BD3,000 for cash. Jan. 27: Purchased goods BD5,000 on credit. Jan. 28: Received invoice 1250 # for purchased goods BD6,000. Solution: PURCHASES ACCOUNT (always debit) Debit + 3,000 5,000 6,000 Credit - Balance + Dr / - Cr 3,000 8,000 14,000 Date Explanation Jan. 26 Jan. 27 Jan. 28 2020
Illustrate (9-7): You are required to post the following transactions in the ledger of advertising expense. Jan. 30: Paid advertising expense BD800 for cash. Jan. 31: Incurred advertising expense BD700 on credit. Solution: ADVERTISING EXPENSE (always debit) Debit + 800 700 Credit - Balance + Dr / - Cr 800 1500 Date Explanation Jan. 30 Jan. 31 2020
Illustrate (9-8): You are required to post the following transactions in the ledger of drawings account. Jan. 30: Withdrew cash BD1,300 for personal use. Jan. 31: Took a cheque BD700 for private use. Solution: DRAWINGS ACCOUNT (always debit) Debit + 1,300 700 Credit - Balance + Dr / - Cr 1,300 2,000 Date Explanation Jan. 30 Jan. 31 2020
Illustrate (9-9): From the following general journal post to the ledger of cash account. Date Explanation Feb. 01 Cash Capital Feb. 03 Lands Cash Feb. 05 Cash Services Revenues Debit 35,000 Credit 35,000 25,000 25,000 11,000 11,000 CASH ACCOUNT Debit + 35,000 Credit - Balance + Dr / - Cr 35,000 10,000 21,000 Date Explanation Feb. 01 Feb. 03 Feb. 05 25,000 11,000 2020
Activity 1: IF the company has a cash balance BD25,000, and paid for salaries expense BD7,000.The new cash balance is BD32,000 2020
Activity 2: ABC Company performed services to customer for BD8,000. The Company should be posted in T-account of services revenue in credit side. 2020
Activity 3: The owner withdrew cash for BD750 for personal use. The Company should be posted in T-account of Drawings in credit side. 2020
Drawings are: Debit Side 2020
Drawings are: Debit Side 2020
