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Very specific for the course

Very specific for the course

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  • would you please forward a copy to me marti4u2@gmail.com

    Subsidiary Ledgers
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  • ANSWER: IT DOES NOT!!!
  • The General Ledger accumulates information from the sales journalFThe purpose of the Debtors Ledger is to provide information about which customers owe money to the business, and how muchTThe Debtors Ledger accumulates information from all journalsFEach month all journals are totalled and posted to the General LedgerTThe purpose of the General Ledger is to organise and summarise the individual transactions listed in all the journalsT
  • The General Ledger accumulates information from the sales journalFThe purpose of the Debtors Ledger is to provide information about which customers owe money to the business, and how muchTThe Debtors Ledger accumulates information from all journalsFEach month all journals are totalled and posted to the General LedgerTThe purpose of the General Ledger is to organise and summarise the individual transactions listed in all the journalsT
  • The Creditors Ledger accumulates information from PD journal and CP journalThere are no changes required to the preparation and format of the purchase distribution journal and the cash payment journal, when using A/P Subsidiary ledgerAt the end of each month, the PD journal is totalled and cross-balanced: the total of the A/P Control account column should equal the total of all the other account columnsThe individual account transactions that make up the total A/P column in the PD journal are credited to their respective accounts in the separate A/P ledger
  • The Creditors Ledger accumulates information from PD journal and CP journalThere are no changes required to the preparation and format of the purchase distribution journal and the cash payment journal, when using A/P Subsidiary ledgerAt the end of each month, the PD journal is totalled and cross-balanced: the total of the A/P Control account column should equal the total of all the other account columnsThe individual account transactions that make up the total A/P column in the PD journal are credited to their respective accounts in the separate A/P ledger

Subsidiary ledgers slides Subsidiary ledgers slides Presentation Transcript

  •  What is the General Ledger? What is a specialised journal? Name five specialised journals? If Mary owes John $5,000, where in John’s accounting records this transaction will appear? If Mary pays off $2,000, where would John’s accountant record this transaction? How would the above two transactions affect John’s Trial Balance?
  • …uhmmm… I wonder who owes us the money? Is it Monica? Is it Erica?Is it Tina? Would the General Ledger help answer this Is it Rita? question?
  •  No, the General Ledger would only give us the total value of the accounts receivable, but not how much Monica, Erica, Rita and Tina owe us individually However, the information about individual debts and payments is necessary to the business to collect cash to pay salaries, purchase inventory, finance purchases of NCA, expansions and so on Subsidiary ledger (or supporting ledger) is the answer!
  •  Subsidiary ledger provides the listing of individual accounts receivable, as well as details of specific customer tax invoices, receipts & credit notes This information comes from the sales distribution SD & cash receipts CR journals Review the prescribed textbook and answer the following questions
  •  The totals of Sales Distributions and Cash Receipts journals are posted to _____________ on a _________ basis. The account the totals are posted to is known as ____________________________ Details from Sales Distribution and Cash Receipts journals are posted to the _____________ in the a/r subsidiary ledger on a _________ basis What is debited in total (from SD journal) to the a/r control account is also ___________ to the subsidiary ledger individual account What is credited in total (from CR journal) to the a/r control account is also ____________ to the individual account of the subsidiary ledger
  •  The totals of Sales Distributions and Cash Receipts journals are posted to _____________ The General Ledger on a _________ basis. The account the totals are monthly posted to is known as ____________________________ Accounts Receivable Control Account Details from Sales Distribution and Cash Receipts journals are posted to the Individual accounts _____________ in the a/r subsidiary ledger on a _________ basis daily What is debited in total (from SD journal) to the a/r control account is also ___________ to the debited subsidiary ledger individual account What is credited in total (from CR journal) to the a/r control account is also credited ____________ to the individual account of the subsidiary ledger
  •  At the end of the month, total of individual accounts from the subsidiary ledger is ______________ to the A/R Control account in the General ledger The inventory system used by the business has / has no impact on the subsidiary ledger
  •  At the end of the month, total of individual accounts from the subsidiary ledger is ______________ to the A/R Control account in reconciled the General ledger The inventory system used by the business has / has no impact on the subsidiary ledger We are going to use PERIODIC inventory system for this topic
  • A/c Rec A Sales Distribution Journal of [ ] SD 1Dr Accounts Receivable Inv/ and/or Accnts GST Any Date Adj Particulars Fol Receiv Sales Payable A/c A/c Rec BDr Dr Cr Cr Cr A/c Rec CDr Accounts GST Receivable Payable Any Control Sales A/c Posting Dr Cr Cr Cr Sales Distribution Journal
  • How does the Subsidiary Ledgerchange the postings to the General Ledger?(compare postings to GL with and without AR Ledger) It doesn’t!Postings to the General Ledger are still the same!
  • A/c Rec A Cash Receipts Journal of [ ] CR 1 Cr Acc’nt Disc GST Bank s Rec Allow Pay SalesA/c Rec B Cr Dr Cr (Dr) Cr CrA/c Rec C Cr Acc Receiv Discount GST BANK CONTROL Allowed Pay SALES Posting Dr Cr Dr Cr Cr Cash Receipts Journal
  • True or False:- The General Ledger accumulates information from the sales distribution journal only- The purpose of the Debtors Ledger is to provide information about which customers owe money to the business, and how much- The Debtors Ledger accumulates information from all journals.- Each month all journals are totalled and posted to the General Ledger- The purpose of the General Ledger is to organise and summarise the individual transactions listed in all the journals
  • True or False:- The General Ledger accumulates information from the sales distribution journal only- The purpose of the Debtors Ledger is to provide information about which customers owe money to the business, and how much- The Debtors Ledger accumulates information from all journals.- Each month all journals are totalled and posted to the General Ledger- The purpose of the General Ledger is to organise and summarise the individual transactions listed in all the journals
  •  Itis all the same for AR subsidiary ledger, but in reverse!!!It is when our Monica (or Erica, Tina or Rita) consider their liabilities to TELSTRA, Energy Australia, OfficeWorks and other suppliers
  •  There are no changes to the preparation of the PD and the CP journals The Creditors Ledger accumulates information from the PD and the CP journals The purpose of the Creditors Ledger is to provide knowledge about which suppliers the business owes money, and how much
  • A/c Pay A Purchases Distribution Journal of [ ] PD 1 Cr Acc’nts Purch Any Payab ases GST Rec a/cA/c Pay B Cr Cr Dr Dr DrA/c Pay C Cr Accounts GST Payable Receivable Any Control Purchases A/c Posting Cr Dr Dr Dr Purchases Distribution Journal
  • A/c Pay A Cash Payments Journal of [ ] CP 1Dr Acc’nt Purc s Disc GST hase Bank Payab Rec’d Rec s A/c Pay BDr Cr Dr (Cr) Dr Dr A/c Pay CDr Acc Payable Discount GST BANK CONTROL Received Rec Purchases Posting Cr Dr Cr Dr Dr Cash Payments Journal
  •  unnecessary detail is kept out of the general ledger a trial balance can be prepared without reference to the subsidiary ledgers in preparation of financial report, details of individual debtors/creditors are not always necessary and the control account provides a concise summary errors can be detected through the reconciliation of the control accounts with the subsidiary ledgers
  •  The Creditors Ledger accumulates information from the General Ledger There are changes required to the preparation and format of the purchase distribution journal and the cash payment journal, when using A/P Subsidiary ledger At the end of each month, the PD journal is totalled and cross-balanced: the total of the Purchases account column should equal the total of all the other account columns The individual account transactions that make up the total A/P column in the PD journal are credited to their respective accounts in the separate A/P ledger
  •  The Creditors Ledger accumulates information from the General Ledger There are changes required to the preparation and format of the purchase distribution journal and the cash payment journal, when using A/P Subsidiary ledger At the end of each month, the PD journal is totalled and cross-balanced: the total of the Purchases account column should equal the total of all the other account columns The individual account transactions that make up the total A/P column in the PD journal are credited to their respective accounts in the separate A/P ledger