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Ledger
A group of accounts.
General ledger
Ledger containing all the accounts needed to prepare financial statements.
Account number
Number assigned to an account.
File maintence
Procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current.
Opening an account
Writing an account title and number on the heading of an account.
Two parts of an accounting number
First digit is the general ledger division, last two is location within general ledger division.
Two steps to open an account
Writing account title and number on the heading of an account.
Posting
Transferring information from a journal entry to a ledger account
Five steps of posting from the general columns of a journal to the general ledger
Write the date, page number, debit or credit amount, and new account balance in the account columns. Write the account number in the Post. Ref. column in the journal for the posted entry.
Are the totals of General Debit and Credit posted?
No, each General transaction is posted individually.
Which column totals of a journal are posted?
Sales Credit, Cash Debit and Cash Credit.
Under what conditions will an account balance be a debit?
When the debits in an account exceed the credits.
Under what conditions will an account balance be a credit?
When the credits in an account exceed the debits.
Correcting entry
An additional journal entry correcting an incorrect journal entry.
What is a correcting entry?
An additional journal entry correcting an incorrect journal entry.
When is a correcting entry necessary?
When an incorrect entry has already been posted and cannot be corrected by ruling through it.
When an amount is journalized and posted as a debit to an incorrect expense account, why is the amount of the correcting entry debited to the correct expense account?
The correcting entry debits the correct account, adding to it's balance in the case of a normal debit side or subtracting in the case of a normal credit side, achieving what the original incorrect entry should have achieved.
When an amount is journalized and posted as a debit to an incorrect expense account, why is the amount of the correcting entry credited to the incorrect expense account?
The correcting entry credits the incorrect account, subtracting from it's balance in the case of a normal debit side or adding in the case of a normal credit side, canceling out what the original incorrect entry did.
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