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receivable that was established on January 17 1-28-X3 Land 15,000
Cash 5,000 Notes Payable 10,000 Purchased land by giving $5,000 cash, and
promising to pay the remainder in 90 days Download free eBooks at bookboon.com
35 Basics of Accounting & Information Processing The Journal 7.3 Page Numbering
Second, notice that the illustrated journal consisted of two pages (labeled page 1 and page 2).
Although the journal is chronological, it is helpful to have the page number indexing for transaction
cross referencing and working backward from financial statement amounts to individual transactions. 7.4 But, What are the Account Balances? Please click the advert The general journal is a great tool to capture transaction and event details, but it certainly does
nothing to tell a company about the balance in each specific account. For instance, how much cash
does Xao Corporation have at the end of January? One could go through the journal and net the debits
and credits to Cash ($25,000 - $2,000 + $4,000 - $500 + $4,800 - $5,000 = $26,300). But, this is
tedious and highly susceptible to error. It would become virtually impossible if the journal were
hundreds of pages long. A better way is needed. This is where the general ledger comes into play. We will turn your CV into
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36 Basics of Accounting & Information Processing The General Ledger 8. The General Ledger
As you just saw, the general journal is, in essence, a notebook that contains page after page of detailed
accounting transactions. In contrast, the general ledger is, in essence, another notebook that contains a
page for each and every account in use by a company. The ledger account for Xao would include the
Cash page as illustrated below: ACCOUNT: Cash
Date Description Jan. 1, 20X3
Jan. 1, 20X3 Journal page 1
Journal page 1 Jan. 18, 20X3 Journal page 2 Jan. 25, 20X3 Journal page 2 Jan. 28, 20X3 Balance $ Journal page 1 Jan. 4, 20X3 Credit Balance forward Jan. 8, 20X3 * Debit Journal page 2 $ 25,000 25,000 $ 2,000 4,000 23,000
31,300 5,000 26,300 Xao’s transactions utilized all of the following accounts: Cash
Utilities Expense Therefore, Xao Corporation’s general ledger will include a separate page for each of these nine
accounts. Download free eBooks at bookboon.com
37 Basics of Accounting & Information Processing The General Ledger 8.1 Posting
Before diving into the details of each account, let’s consider what we are about to do. We are going to
determine the balance of each specific account by posting. To do this, we will copy (“post”) the
entries listed in...
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- Summer '13