ACC 311 Lecture Notes - Lecture 1: General Ledger, Accounting Equation

20 views4 pages

greenwalrus59

1 Feb 2017

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

General journal: a listing in chronological order of each transaction"s effects. General ledger: a record of effects to and balances of each account. Increases in asset accounts are on the left because assets are on the left side of the accounting equation. Increases in liability and stockholders" equity accounts are on the right because they are on the right side of the accounting equation. The journal entry: an accounting method for expressing the effects of a transaction on accounts. The order of the debited accounts or credited accounts does not matter, as long as the debits are on top and the credit are on the bottom and indented to the right. Compound entry: any journal entry that affects more than two accounts. Posting transaction effects from the journal to the ledger. T-account: a tool for summarizing transaction effects for each account, determining balances, and drawing inferences about a company"s activities.

Related Questions

Identify a business or personal financial transaction. (You canchoose any one you like, it doesn't have to be one in thetextbook). Then answer the following questions which should resultin correctly identifying the accounts to be debited and credited:REQUIRED: 1) What are the specific accounts that are affected?(i.e. Cash, Accounts Receivable, Land, etc.) REMEMBER THAT THEREMUST BE AT LEAST 2 SPECIFIC ACCOUNTS AFFECTED. 2) What BROAD typeof Account do they belong to? (i.e. Asset, Liability or Equity) 3)Does this transaction result in an INCREASE or DECREASE to theaccount(s) in #2 above? 4) Using the rules for Debits and Creditsidentify which SPECIFIC ACCOUNT (#1) is to be debited and which isto be credited. REMEMBER: 1. ASSETS are on the LEFT side of theaccounting equation and therefore they INCREASE on the LEFT, DEBITSIDE; LIABILITIES AND EQUITY are on the RIGHT SIDE of the equationand therefore they INCREASE on the RIGHT, CREDIT side. 2. TOTALDEBITS MUST EQUAL TOTAL CREDITS!

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

A. Posting
B. Mixed Accounts
C. Liabilities
D. Trial Balance
E. General ledger account
F. Debit
G. Asset
H. Revenues
I. Temporary Equity Accounts
J. Worksheet
K. Expenses

1. Cost that relate to the earning of revenue
2. Something a company owns of value
3. Listing of the ending balances of all ledger accounts thatproves the equality of total debits and credits
4. The left side of a T account
5. Process of transferring accounts and amounts from a journal toledger
6. Complete record of transactions recorded in each individualaccount
7. Working paper that is used to record adjustments and gatherinformation to prepare the financial statements
8. Accounts that are partly income statement and partly balancesheet accounts
9. Account classifications that are closed into the Income Summaryaccount
10. The credit to Income Summary the total

pearwolf332

ACC 311 Lecture Notes - Lecture 1: General Ledger, Accounting Equation

Document Summary

Get access

Related Documents

ACC 311 Lecture Notes - Lecture 2: Current Asset, Accounts Payable, Promissory Note

ACC 311 Chapter Notes - Chapter 2: Trial Balance, General Ledger, Financial Statement

ACC 311 Lecture Notes - Lecture 2: Income Statement, Financial Statement, Accounting Equation

Related Questions