This document discusses the ledger and trial balance processes. It explains that the ledger contains a list of transactions and account balances but not overall balances. The trial balance totals debit and credit columns to check that debits equal credits. If the trial balance does not balance, the document provides tips to check for errors such as omitted transactions, incorrect postings, or incorrectly classified balances.

1. Week 4

2.  Contains a chronological list of transactions all in
one place.
 Does not tell business owner what the account
balances are for each account.

3.  Book of final entry; accumulates all entries to
arrive at a final balance for all accounts
 Process of transfer from journal to ledger is known
as posting.

4.  Account title and account number
 Date of transaction from journal
 Post Ref is page of journal
 Debit/Credit of transaction from journal
 Balance calculated from debit/credit posted

5.  Record date and amount of transaction from the
journal (debit or credit)
 Record posting reference (journal page)
 Calculate new account balance by extending debit
or credit to right (think normal balance)
 Record account number in Post Ref column of the
journal page.

7.  List of individual accounts and their debit or credit
balance as taken from ledger.
 Listed in same order as found in ledger.
 All accounts are listed, even accounts with a zero
balance.
 Total debit and credit columns to see if debits
equal credits.
 What if trial balance doesn’t balance?

8.  What to check.
◦ Omitted transaction.
◦ Transaction entered incorrectly in journal.
◦ Journal entry posted incorrectly in ledger.
◦ A debit balance placed in credit column or a credit
balance placed in debit column of trial balance.

9.  Amount of difference is 10 or 100 or 1,000 check your
addition.
 Difference equal to an account balance check if
amount was omitted or not posted.
 Divide difference by 2 and check for that amount in the
higher column total. Check to see if a debit of that
amount should have been a credit and vice versa.
 Compare balance in trial balance to balances in ledger
to check for copying errors.

10.  Is difference evenly divisible by 9? If so may be a
slide or transposition error.
◦ $2,150.00 copied as $21.50
◦ $2, 150 copied as $2,510
 Recalculate balances in ledger accounts.
 Trace journal to ledger postings.

11.  Business tracks transaction for a specified period
of time known as the accounting period or the
fiscal period.
 At end of fiscal period the business needs to
prove the equality of debits and credits.
 Do the totals of all debit account balances equal
total of all credit account balances?
 This is done by preparing a trial balance.
 Must prepare trial balance before reporting
financial information in financial statements.

12. Questions?