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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

What Would You Say?

You are the new bookkeeper for a small business. The bookkeeper whose job you are taking is training you on the business’s manual system. As he journalizes, he writes the account number in the Post. Ref. column because he believes it’s easier. His thinking is that, when he posts, he won’t be bothered writing the account numbers. How would you explain why he should not write the account number in the Post. Ref. column immediately and instead should enter the account number after he has posted the amount to the ledger?

To determine

Explain the reason for not writing the ledger account number in the posting reference column of journal, without posting the entry in the ledger account.

Explanation

Ledger: Ledger is a book in which the accounts are summarized and grouped from the transactions recorded in the journal.

Posting transactions: The process of transferring the journalized transactions into the accounts of the ledger is known as posting the transactions.

Reasons:

  • ■ In the process of posting transactions, the page number of the journal is marked in the Posting Reference column of the ledger account, and likewise, the ledger account number is marked in the Posting Reference of the journal. The page number of journal recorded in the Posting Reference column of ledger account denotes the page number from where the amount is recorded...

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