ACCTG 101 Lecture Notes - Lecture 9: Subledger, General Ledger, Accounts Payable

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18 Dec 2020

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If not recorded in special journal recorded in general journal. I. e. depreciation, adjustments for prepayments and other accruals. Post totals in general ledger and not individual entries. More than one user can update the accounting system because it consists of subsystems. Info (invoice/receipt number) can be recorded in special columns. Set of ledger accounts that collectively represents a detailed analysis of one general ledger account classification. Total of all individual accounts in subsidiary ledger equals balance of corresponding control account in general ledger. Every entry made to an account in the general ledger is contained within an aggregate amount in a general ledger control account. Example of general ledger accounts with subsidiary ledgers. Accounts receivable: separate account for each debtor. Accounts payable: separate account for each creditor. Property, plant, equipment: separate record of each piece of. Raw materials inventory separate record of each raw material type. Example: operation of special journal and subsidiary ledgers.

Related Questions

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

AquaFresh Water Testing Service was established on April 16. AquaFresh uses field equipment and field supplies (chemicals and other supplies) to analyze water for unsafe contaminants in streams, lakes, and ponds. Transactions related to purchases and cash payments during the remainder of April are as follows:

April 16.		Issued Check No. 1 in payment of rent for the remainder of April, $3,500.
April 16.		Purchased field supplies on account from Hydro Supply Co., $5,340.
April 16.		Purchased field equipment on account from Pure Equipment Co., $21,450.
April 17.		Purchased office supplies on account from Best Office Supply Co., $510.
April 19.		Issued Check No. 2 in payment of field supplies, $3,340, and office supplies, $400.
		Post the journals to the accounts payable subsidiary ledger.
April 23.		Purchased office supplies on account from Best Office Supply Co., $660.
April 23.		Issued Check No. 3 to purchase land, $140,000.
April 24.		Issued Check No. 4 to Hydro Supply Co. in payment of April 16 invoice, $5,340.
April 26.		Issued Check No. 5 to Pure Equipment Co. in payment of April 16 invoice, $21,450.
		Post the journals to the accounts payable subsidiary ledger.
April 30.		Acquired land in exchange for field equipment having a cost of $12,000.
April 30.		Purchased field supplies on account from Hydro Supply Co., $7,650.
April 30.		Issued Check No. 6 to Best Office Supply Co. in payment of April 17 invoice, $510.
April 30.		Purchased the following from Pure Equipment Co. on account: field supplies, $1,340, and field equipment, $4,700.
April 30.		Issued Check No. 7 in payment of salaries, $29,400.
		Post the journals to the accounts payable subsidiary ledger.

Required:

1. Journalize the transactions (in chronological order as presented in the data) for April. Use a purchases journal and a cash payments journal, and a two-column general journal. Use debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:

11	Cash	19	Land
14	Field Supplies	21	Accounts Payable
15	Office Supplies	61	Salary Expense
17	Field Equipment	71	Rent Expense

At the points indicated in the narrative of transactions, post to the following accounts in chronological order in the accounts payable subsidiary ledger:

Best Office Supply Co.

Hydro Supply Co.

Pure Equipment Co.

For those boxes in which no entry is required, leave the box blank. If no other account is needed in the "Other Accounts Dr." column select "No Entry Required".

PURCHASES JOURNAL								PAGE 1
Date	Account Credited	Post. Ref.	Accounts Payable Cr.	Field Supplies Dr.	Office Supplies Dr.	Other Accounts Dr.	Post. Ref.	Amount
April 16	Hydro Supply Co.	?				No Entry Required
April 16	Pure Equipment Co.	?				Field Equipment
April 17	Best Office Supply Co.	?				No Entry Required
April 23	Best Office Supply Co.	?				No Entry Required
April 30	Hydro Supply Co.	?				No Entry Required
April 30	Pure Equipment Co.	?				Field Equipment
April 30

CASH PAYMENTS JOURNAL						PAGE 1
Date	Ck. No.	Account Debited	Post. Ref.	Other Accounts Dr.	Accounts Payable Dr.	Cash Cr.
April 16		Rent Expense
April 19		Field Supplies
		Office Supplies
April 23		Land
April 24		Hydro Supply Co.	?
April 26		Pure Equipment Co.	?
April 30		Best Office Supply Co.	?
April 30		Salary Expense
April 30		Total

JOURNAL				PAGE 1
Date	Description	Post. Ref.	Debit	Credit
April 30	Land
	Field Equipment

2. Post the individual entries in chronological order (Other Accounts columns of the purchases journal and the cash payments journal and both columns of the general journal) to the appropriate general ledger accounts. Post to the subsidiary ledger in chronological order. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, post transactions from the purchases journal first, then the cash payments journal before posting from the general journal.

3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger.

For those boxes in which no entry is required, leave the box blank.

ACCOUNTS PAYABLE SUBSIDIARY LEDGER
Date	Item	Post. Ref.	Debit	Credit	Balance
Account: Best Office Supply Co.
April 17
April 23
April 30
Account: Hydro Supply Co.
April 16
April 24
April 30
Account: Pure Equipment Co.
April 16
April 26
April 30

Post transactions in chronological order. However, if there is more that one transaction on the same date, post from the purchases journal first, then from the cash payments journal before posting from the general journal. (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)

GENERAL LEDGER
					Balance
Date	Item	Post. Ref.	Debit	Credit	Dr.	Cr.
Account: Cash #11
April 30
Account: Field Supplies #14
April 19
April 30
Account: Office Supplies #15
April 19
April 30
Account: Field Equipment #17
April 16
April 30
April 30
Account: Land #19
April 23
April 30
Account: Accounts Payable #21
April 30
April 30
Account: Salary Expense #61
April 30
Account: Rent Expense #71
April 16

4. Prepare a schedule of the accounts payable creditor balances.

AQUAFRESH WATER TESTING SERVICE Accounts Payable Creditor Balances April 30
Best Office Supply Co.	$
Hydro Supply Co.
Pure Equipment Co.
Total accounts payable	$

5. All are reasons why AquaFresh might consider using a subsidiary ledger for the field equipment EXCEPT:

To secure lower pricing on equipment purchases

lemonwasp608

Now that you have reviewed information about Hi-Fi Way, you are ready to begin the first step in the accounting cycle, recording transactions. On this page of the practice set, you are asked to record transactions that occurred during the first week of June into the company's journals and post the appropriate entries to the ledger accounts. The following transactions occurred throughout the first week of June:

Week 1
Date	Transaction description
1	Issued Check No. 570 for $8,400 to pay Realty Bites for two month's worth of rent in advance.
1	Obtained a loan of $59,000 from ZNZ Bank at a simple interest rate of 6% per year. The first interest payment is due at the end of August 2017 and the principal of the loan is to be repaid on June 1, 2021.
3	Made payment of $764 to Integer Energy for 3 months of electricity up to and including May 31, Check No. 571.
4	Turbo Tech paid the full amount owing on their account.
4	Paid sales staff wages of $13,224 for the week up to and including yesterday, Check No. 572. Note that $6,637 of this payment relates to the wages expense incurred during the last week of May.
5	Paid the full amount owing to Big Telco, Check No. 573.
7	Issued Check No. 574 to Office Supplies Warehouse for the purchase of $301 worth of office supplies.

After completing this practice set page, you should know how to record basic transactions in the journals provided below and understand the posting process in the manual accounting system. Note that you will record the remaining June transactions in the following sections of this practice set.

Remember, one purpose of using special journals is to make the posting process more efficient by posting the total of most columns in the special journals after all of the transactions for the period have been recorded. However, some parts of a journal entry are still required to be posted on a daily basis. View the company's accounting policies and procedures for details of what is to be posted daily or monthly.

Instructions for week 1

1)Record all week 1 transactions in the relevant journals.

Note that special journals must be used where applicable. Any transaction that cannot be recorded in a special journal should be recorded in the general journal.

2)Post entries recorded in the journals to the appropriate ledger accounts according to the company's accounting policies and procedures.

Note that the relevant totals of the special journals will be posted to the general ledger accounts at the end of the month. You will enter this before you prepare the Bank Reconciliation Statement.

Remember to enter all answers to the nearest whole dollar. When calculating a discount, if a discount is not a whole number, round the discount to the nearest whole dollar. Then, to calculate the cash amount, subtract the discount from the original amount.

Additional instructions

Displaying selected accounting records:

To save space, not all accounting records (e.g. journals and ledgers) will be displayed on every page. However, on each page you can access all accounting records necessary to answer the questions on that page.

There are several tabs representing different views of the accounting records. The active tab by default is Show All, but you may also select to view just one particular accounting record by selecting the appropriate tab.

If you fill in any accounting records and change the view on the page by selecting a different tab, the information that you have entered will remain in that accounting record and be displayed whenever you can see that accounting record.

Before submitting your answers, we recommend that you click the Show All tab and check that all relevant accounting records have been completed. You are required to complete all relevant accounting records before pressing the Submit answers button. Once submitted, you will not be able to return to the page to re-enter or alter your answers.

Journals:

Each transaction recorded in a special journal must be entered in one line. In order to receive full points, you must not split up the relevant transaction into more than one line in the special journal.

For certain transactions in special journals, some accounting textbooks do not always require an account to be chosen under the column labeled Account. In this practice set you arerequired to select an account for each transaction in the special journals. Specifically, in all special journals, under the column labeled Account, you must select the correct account name for each transaction in order to receive full points. Note that for some transactions, this will mean that the account name selected will correspond to the heading of one of the columns in that special journal.

For each journal, in the Post Ref. column you will need to correctly type the account number of the account you are posting to. In particular, in special journals, some accounting textbooks do not always require a reference to be recorded in the Post Ref. column. In this practice set, in order to receive full points, every transaction entered in a special journal requires an entry in the Post Ref. column. Note that in the special journals, if the account name selected for a transaction corresponds to the heading of one of the columns in that special journal, the post ref is to be recorded as an X. This is because these transactions are not posted on a daily basis. In order to receive full points, you must record only the letter Xin the Post Ref. column for these transactions.

Note that in special journals, the Other Accounts column should not be used to record movements of inventory.

There may be entries in the general journal that require posting to both a control account and a subsidiary ledger. In these cases, after you have posted to both ledgers, you should enter the reference for both the general ledger account and the subsidiary ledger account in the Post Ref. column to indicate that you have posted to both accounts. For example, if the reference number for the control account is 110 and the reference number for the subsidiary ledger account is 110-1, you should type '110/110-1' into the Post Ref. column.

General journal entries do NOT require a description of the journal entries.

Ledgers:

When posting a transaction to a ledger account, under the Description column, please type the description of the transaction directly into the field. The exact wording does not matterfor grading purposes. For example, it does not matter in an electricity transaction if you type 'Paid for electricity' or 'Paid electricity bill'.

For each ledger, under the Ref. column, you need to select the correct journal from a list in the drop-down box provided in order to receive full points.

If the balance of a ledger account is zero you do not need to select a debit or credit from the drop-down box.

Each transaction posted to the subsidiary ledgers must be entered in one line. In order to receive full points, you must not split up the relevant transaction into more than one line in the subsidiary ledger.

Both journals and ledgers:

Most journals and ledgers will have blank rows left at the end of the page.

Some journals and ledgers may not require any entries.

When purchases and sales are recorded in special journals, changes in inventory must not be posted to the Merchandise Inventory account in the general ledger on a daily basis.

chocolateporpoise367

Rose Pico began her retail business, Pico Inc., on October 1,2016. A post-closing trial balance was prepared on November 30,2016 and those balances are posted in the ledgers at December1.

Pico Inc. uses a perpetual inventory system. During December,Pico Inc. entered into the following transactions:

Dec.	2	Purchased merchandise on accountfrom Ohio Wholesale, $4,000 terms FOB shipping, 2/10, n/30, withprepaid freight of $125 added to the invoice.
	4	Received cash from Third Street onaccount, $1,960.
	8	Returned $180 (net of discount) ofmerchandise purchased on Dec. 2.
	11	Issue Check #5471 to Ohio Wholesaleon account for full amount of Dec. 2 purchase.
	12	Issued Check #5472 to Decker OfficeProducts as partial payment toward current balance, $512.
	13	Issued Invoice #3462 to KitchenWorld for merchandise sold on account, $8,300, n/30. The cost ofmerchandise sold was $2,490.
	15	Issued Check #5473 to thereceptionist for bi-monthly salary, $600.
	16	Issued Invoice #3463 to My Garage,terms 2/10, n/30, for merchandise sold on account, $6,800. The costof the merchandise sold was $2,040.
	18	Purchased supplies from DeckerOffice Products on account, $580, Invoice #2915, terms n/30.
	19	Issued Invoice #3464 to Liz's Housefor merchandise sold on account, list price $6,000, trade discount30%. Cost: $1,500
	21	Purchased merchandise on accountfrom EDH Distribution, $6,000 terms FOB destination, 2/10,n/30.
	22	Issued Invoice #3465 to Arnie'sWholesale Club, for merchandise sold on account, $6,700 terms 2/10,n/30. The cost of merchandise sold was $1,970
	26	Received cash from My Garage onaccount, for full amount owed.
	27	Received cash from Liz's House onaccount, $2,500.
	29	Issued Check #5474 in payment ofwindow cleaning, $65.
	30	Issued Check #5475 to thereceptionist for bi-monthly salary, $600.
	31	Issued Invoice #3466 to Geideman's,for merchandise sold on account $4,800. The cost of the merchandisesold was $1,450.
	31	Issued Check #5476 to Rose Pico asa personal withdrawal, $8,500.

Note: You may find it useful to copy and pastethe following instructions to a file and print them. Also, in thisproblem, you will see [More] in many locations. Click on thoselinks for helpful hints and additional instructions. In thespecial journals and all ledgers, dates must be entered in Mon DDformat. (December 9 would be entered as Dec. 9)

Required:

Journalize each of the Decembertransactions using the following journals. (Posting references willbe inserted in requirement 2.) [More]

A.	Journal (pg. 11)
B.	Revenue journal (pg. 8)[More]
C.	Cash receipts journal (pg.11)
D.	Purchases journal (pg. 9)[More]
E.	Cash payments journal (pg.12)

Post the journal entries to theappropriate ledgers. [More] Posting should be completed in thefollowing order:

A.	Post the entries on journalpage 11 to the general ledger. [More]
B.	Post the individual revenuejournal entries to the accounts receivable subsidiary ledger.[More]
C.	Post the individual cashreceipts journal entries to the accounts receivable subsidiaryledger. [More]
D.	Post the individual purchasesjournal entries to the accounts payable subsidiary ledger.[More]
E.	Post the individual cashpayments journal entries to the accounts payable subsidiary ledgerand the appropriate general ledger accounts. [More]

Total each of the columns ofthe special journals. Verify that total debits equal total creditsin each journal.

Post the totals of the specialjournals to the appropriate general ledger accounts. [More] Specialjournals must be posted in the following order:

I.	Revenue journal
II.	Cash receipts journal
III.	Purchases journal
IV.	Cash payments journal

Prepare an unadjusted trialbalance. [More]

At the end of December, thefollowing adjustment data were assembled. Analyze and use thesedata to complete parts (7) and (8).

â¢	Insurance expired duringDecember is $200.
â¢	Office supplies on hand onDecember 31 are $615.
â¢	Depreciation of officeequipment for December is $300.
â¢	Rent expired during December is$1,280.
â¢	A physical inventory indicatesthat $10,955 is actually on hand.

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ACCTG 101 Lecture Notes - Lecture 9: Subledger, General Ledger, Accounts Payable

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