The ledger is a group of all of the business’ accountsThe group of them together is known as the

ledgerMay be a binder or kept on the computer

In the past few weeks....you were introduced to them in T-FormBut Remember..... I’m tricky

In reality....The Ledger is organized in much the same

fashion as the journalRather than use the LS and the RS of a T-

Account, accountants will post transactions to the debit or credit side of the ledger journal paperReferred to as the Balance Column form

The Owner had $500 cash beginning on March 1st

The Owner then bought a microphone for $100

Used to be....

Becomes.....

Cash

500100

OpeningBalance March 19

General Ledger

K. Dub Lip Singing 

Account: Cash 101  

 

Date Particulars P.R. Debit Credit DR/CR Balance

 

1     1

2                     2

3                       3

General Ledger

K. Dub Lip Singing 

Account: Cash  

 

Date Particulars P.R. Debit Credit DR/CR Balance

 

1     1

2                       2

3                       3

Mar 1Opening Entry J1 500500

Dr

This is the Page # of the General Journal

This is your running balance. You update this after every entry

Chart of Account #

19 Bought Microphone

J1 100 Dr 400

1Opening Entry

Items of NoteEach account has a separate page/section in

the ledgerFor each transaction that happens in the

business, we record it in the journalTHEN Post the total to the ledger

The ledger will keep a running total of each account

Since we are going to be “Posting”, we need to reference all of our accounts.Assets 100-199Liabilities 200-299Capital (including Drawings) 300-399Revenues 400-499Expenses 500-599

The numbers are used for identification.

Assets 100-199

Liabilities 200-299

Capital 300-399

Revenues 400-499

Expenses 500-599

In order of Liquidity and then Longevity (useful life)

In order of Maturity

Will be only 1 account + drawings

List Core revenues 1st

Alphabetical order

ExampleThe owner, K. Dub invests $500 into the

business on March 18th

General Journal 

K. Dub Lip Singing 

 Page 1

  Date Particulars P.R. Debit Credit  

1 Mar 18   Cash 500     1

2      Capital, K.

Dub     500    2

3    

Opening Balance. Lip Singing Company            3

Posting is the process of transferring the information from the accountant’s general journal to the ledger of accountsWHY DO WE BOTHER DOING THIS?

CROSS REFERENCEAllows the accountant to double check to

errors in balances over the fiscal periodAnother name for this is an audit

Systematic check of accounting records and procedures

The accountant will make sure to includeThe Journal Page # when posting to the ledgerThe ledger account # when posting from the

journal

General Journal 

K. Dub Lip Singing 

 Page 1

 

Date Particulars P.R. Debit Credit 

1 Mar 18   Cash 500     1

2      Capital, K.

Dub     500    2

3    

Opening Balance. Lip Singing Company            3

101

301

This stands for Posting Reference. It is to show you which Chart of Account # match up with

Notice we’re on Page 1. You’ll need this info later!

The process of performing Opening Entries to show what the business first has in each account

Example

Cash $4000

Equipment $5000

Truck $20000

Accounts Payable $3000

Capital ?

The Opening Entries must first be recorded in our journal

General Journal 

P Money Accounting

 Page 1

 Date Particulars P.R. Debit Credit

 

1     1

2       2

3           3

Next you must transfer those total into separate accounts in the ledger

Be sure to includeThe name of the accountThe Account #The Opening DateThe Description “Opening Entry”Journal Page Reference

General Ledger

P. Money Accounting

Account: P. Lovett, Capital Account #: 301  

Date Particulars P.R. Debit Credit DR/CR Balance 

1     1

2                       2

Mar 18 Opening Bal. J1 500 Cr 500

If you were “Forwarding” , you would type that here.

Forwarding is the process of continuing an account on the next page by carrying forward all relevant information

Example: K. Efsee began his own restaurant. He had

$17,000 in cash; $6,000 in equipment, a Bank Loan of $15,000 and overall capital of _______.

Over the first month of operation the following 3 transactions happened

1. He deposited $5,000 into the business2. Sales of $450 were made3. He paid off $1000 of the bank loan

Step 1:Opening the Accounts

Opening Journal Transactions and Opening Balances in the Ledger

Step 2:Performing Transactions in the journal

Step 3: Posting the transactions to the ledger accounts

General Journal 

K Efsee’s Fish

 Page 1

  Date Particulars P.R. Debit Credit  

1     1

2       2

3           3

General Ledger

K. Efsee’s Fish

Account: Cash Account #: ???  

  Date Particulars P.R. Debit Credit DR/CR Balance  

1     1

2                       2

3                       3

General Ledger

K. Efsee’s Fish

Account: Equipment Account #: ???  

  Date Particulars P.R. Debit Credit DR/CR Balance  

1     1

2                       2

3                       3

General Ledger

K. Efsee’s Fish

Account: K. Efsee, Capital Account #: ???  

  Date Particulars P.R. Debit Credit DR/CR Balance  

1     1

2                       2

3                       3

General Ledger

K. Efsee’s Fish

Account: Bank Loan Account #: ????  

  Date Particulars P.R. Debit Credit DR/CR Balance  

1     1

2                       2

3                       3

General Ledger

K. Efsee’s Fish

Account: Revenue Account #: ???  

  Date Particulars P.R. Debit Credit DR/CR Balance  

1     1

2                       2

3                       3

General Journal 

K Efsee’s Fish

 Page 1

  Date Particulars P.R. Debit Credit  

1     1

2       2

3           3

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