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SESSION 3 - POSTING TO LEDGER ACCOUNTS (SAMPLE):
(Exerts from - NORMAL BALANCE)
TUTOR: . . . . . .
Let me give you an
example: Suppose the balance in the ledger account in figure 3-1 was mistakenly
thought to be a credit balance. This would cause the ending balance of $12,100, to be $8,300 ($10,200 - 1,200 =
$9,000 - 900 = $8,100 + 200) = 8,300. This is a difference of $3,800.
By not knowing what the "normal balance" of an account is, has caused many
students
hours of extra time on homework and a lot of frustration. This is why I can't
emphasize
enough that student’s take the time to learn what the "normal balance" of all
the
groups of accounts is.
(Exerts from - POSTING)
I want to go over the
transaction dated the 9th. In this transaction we returned some
equipment and supplies that we had purchased on credit. The journal entry was a
debit
entry to the account “Accounts Payable”. First we enter the day, then the
explanation
“return equipment and supplies”. Next we enter the $120 in the debit column of
the ledger
account. Because “Accounts Payable” normally has a credit balance we must
subtract the
amount from the balance. Notice here, (See Illustration 3-2 (cont.),page 36)
“Accounts
Payable” the balance in the account prior to this transaction is $1,950, so we
subtracted the
$120 from that balance to arrive at our new balance of $1,830 ($1,950 - $120) =
$1,830.
Now you do the other half of the transaction.