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The accountant will take the information from the

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Unformatted text preview: it to each of the General Ledger accounts that were affected by the transaction. Again, this is normally done electronically today, with software that automatically posts to the ledger accounts each time you enter a transaction in the General Journal. But just to be sure you understand how the information is posted, let’s look at an example of how we would post to the ledger accounts from the General Journal entry in our example from Figure 2 again. FY20XX Debit Equipment 144 1,800 101 600 Accounts Payable 22 F Cash Nov Description Credit 200 1,200 Purchase of Computer with $600 cash and $1200 store credit You’re going to want to post to three accounts: Equipment (144) Cash (101) Accounts Payable (200) Figure 3 shows the three entries you would make in the General Ledger. Download free ebooks at bookboon.com 22 Financial Information Related to the Budget Managing Budgets GENERAL LEDGER Equipment Account #144 FY20XX Oct 22 F Debit Credit 31 Nov Description Balance 4,200 Computer J2 1,800 F Debit 6,000 GENERAL LEDGER Cash Account #101 FY20XX Oct 22 Credit 31 Nov Description Balance 3,700 Computer J2 600 3,100 Credit Balance GENERAL LEDGER Accounts Payable Account #200 FY20XX Oct 22 F Debit 31 Nov Description 800 Computer J2 1,800 2,600 Figure 3: Examples of General Ledger Account Entries Download free ebooks at bookboon.com 23 Financial Information Related to the Budget Managing Budgets To read the entries, here is an interpretation of the information: The first entry in each ledger shows the balance from the previous month In Colum F, the reference is to the page in the General Journal (J for Journal, 2 for the page number) where the item was recorded. Now that the information is posted, the financial statements that need the information can be prepared. You can also prepare an updated budget because you know what amount remains in each line item. We’ll look at this information in more detail after examining the other related financial reports. e Graduate Programme for Engineers and Geoscientists...
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