SET I Use the first and fourth pages of a sheet of journal paper as a journal and the second and third pages as a cash book. Enter the cash transactions in the cash book and all others in the journal. book. TRANSACTIONS FOR JANUARY January 1. B. N. Baxter B. N. Baxter began business by investing cash, $1,500. Make a memorandum in the journal, and an entry in the cash 2. Paid rent of store for one month, $25. 3. Bought of G. E. Bond, for cash: 50 bbl. Flour at $5.80 4. Bought of F. S. Norton, on account, 30 days: 200 bu. Potatoes at 65¢ The item bought should not be recorded in the journal entry. 6. 9. 12. 25 bbl. Flour at $6.05 Paid for bill heads, $2.50. Sold C. E. Niles, on account, 10 days: Record the item sold in the journal entry. 22. 24. 26. 27. 28. Paid B. N. Carr cash, on account, $50. Received cash, $60, for the sale to C. E. Niles on the 12th. Sold L. S. Stewart, for cash: 25 bbl. Flour at $6.40 Paid F. S. Norton cash, on account, $80. Sold C. E. Niles, on account, 30 days: 15 bbl. Apples at $4.30 29. B. N. Baxter, the proprietor, withdrew $25 for per sonal use. Does the business receive cash or pay it out? 1. 2. 31. Paid clerk's salary for two weeks in cash, $15. CLOSING WORK Balance the cash book. Post the journal entries to the ledger. Do not forget that each ledger posting must show the date, J, the page of the journal, and the amount The letter and page show from what book and page the entry was posted. After posting the debit of the entry, put the page of the ledger to which the entry has been posted in the folio column of the journal to the left of the name of the account. Do the same thing after posting the credit to the ledger. 3. a) Post the cash book as follows: Credit each account named on the receipts side of the cash book. Put C and the page of the cash receipts in the ledger to show from what book and page each entry is posted. Put the page of the ledger to which you have posted in the folio column to the left of the name of each account in the cash book. b) Post the total cash received for the month to the debit of the Cash account in the ledger. The date in the ledger will be the last day of the month, January 31. Do not forget to place C and the page of the cash receipts in the ledger account nor the page of the ledger to which you have posted in the folio column of the cash book. c) Debit each account named on the payments side of the cash book. Do not forget to place C and the page of the cash payments for each posting and the page of the ledger in the folio column of the cash book. d) Credit the Cash account for the total cash paid out, using January 31, C, the page of the cash payments, and the amount. Put the page of the ledger in the folio column of the cash book. When you have finished posting, present your journal, cash book and ledger to your teacher for approval. Keep all these papers until Set I is entirely completed. You will study the other steps to be taken in the succeeding chapters before completing Set I. Note: The following are the necessary steps for each set: CHAPTER V THE TRIAL BALANCE Double entry bookkeeping provides a test of the posting to the ledger. That test is the Trial Balance. In making entries in the journal, there was an equal credit for every debit. The debits from the journal have been posted to the debit side of the respective accounts. In the ledger the credits from the journal have been posted to the credit side of the respective accounts. In making entries in the cash book on the receipts side, Cash was understood to be debited and the respective accounts named were credited. In posting to the ledger, but one debit to Cash was posted for the sum of the accounts credited. On the payments side, each account named was posted to the debit side and Cash was credited for the total. In this way the ledger has been kept in equality. The sum of the debits of all the accounts should equal the sum of the credits of all the accounts. A Trial Balance is a list of the open accounts in a ledger with the debit and credit footings, or the balances set opposite the names of the accounts, and with the total debits and credits equal. Open Accounts are those accounts that do not have the same total on each side of the account. If an account shows exactly the same total on each side of the ledger, it should not appear in the trial balance, as it balances or is closed. The accounts should be listed in the order that they occur in the ledger with the ledger page placed to the left of the name of the account. Preparations for the Trial Balance. the following steps should be taken: Before a trial balance is made, 1. Without drawing any lines, add the debit side of each account that contains more than one item. Place the footings in small, neat, pencil figures underneath the line on which the last item is entered. 2. In the same way, add the credit side of each account that contains more than one item. 3. Examine the ledger to see whether any accounts foot up the same on each side. Such accounts should be omitted from the trial balance. Trial Balance of Totals. The simplest method of making a trial balance of the ledger is a trial balance of totals. A trial balance of the totals of the Model Ledger follows: Trial Balance. Jan. 31,19~ It will be noticed that all the accounts in the ledger are listed in the trial balance except that of S. N. Good, which balances. Value of the Trial Balance. The trial balance tests the equality of the debits and credits of the ledger. It also furnishes information on which to base certain statements made out at the end of each financial period. The trial balance does not prove the absolute correctness of the ledger. It does not prove the correctness of the entries in the original books. A sale may have been figured out incorrectly. The trial balance does not show this mistake. The wrong account may have been debited or credited. The trial balance does not show this. A debit may have been posted to the debit side of the wrong account. The trial balance does not show the bookkeeper that an error of this kind has been made. In your practice work you may obtain a trial balance of your ledger and yet find that some mistakes have been made which the trial balance does not test. Trial Balance of Differences. The trial balance of totals already explained is the easiest one for the beginner to understand but is not used as much as a trial balance of differences. A ledger in balance is an equation. The same amount may be sub |