CHAPTER 12

1)Subsidiary ledger- a ledger that is summarized in a single general ledger account.
*It only contains accounts for vendors from whom items are purchased or bought on account which are accounts payable ledger.

2)Controlling account- an account in a general ledger that summarizes all accounts in a subsidiary ledger.

3) The controlling accounts are maintained in a general ledger

4) The balance of a controlling account equals the total of all accounts balances in its related subsidiary ledger.

5) Schedule of accounts payable and schedule of accounts receivable.

6) -General amount column totals ARE NOT posted.
-Special amount column totals ARE posted.

7) The Accounts Receivable accounts have a normal balance on the debit side because they are assets. Assets have a normal debit balance.

8) -The normal balance column has to be on the credit side, because of it being a liability

9)New page in the accounts payable ledger

1. Write the vendor name, African Importers, on the Vendor line.
2. Write the vendor number, 220, on the Vendor No. line.
3. Write the date, 20-, Nov. 1, in the Date column
4. Write the word Balance in the Item column.
5. Place a check mark in the Post. Ref. column to show that the amount has been carried forward from a previous page rather than posted from a journal.
6. Write the account balance, $8523.02, in the Credit Balance column.

10)Posting to the accounts receivable ledger.

1. Write the date, 3, in the Date column of the account.
2. Write the journal page number, 21, in the Post. Ref. column of the account.
3. Write the debit amount, $864.96, in the Debit column of the account for Children's Paradise.
4. Add the amount in the Debit column to the previous balance in the Debit Balance column ($318.00 + $1,182.96). Write the new account balance, $1,182.96, in the Debit Balance column.
5. Write the customer number, 120, in the Post. Ref. column of the journal. The customer number shows that the posting for this entry is complete.
   

IS ANYONE LISTENING?

SITUATION 1
Swamus Ryan like to be the first to know what is going on in the office. One of the reasons he is so well informed is that he looks through the papers on other employee's desk.

1. Swamus is doing the wrong thing because Riverside Payroll has a reputation of a good working place.
2. He is demostrating wrong ethical behavior because the paper work of others is private and it only involves the owner of those paper.
3. He is showing that he is not good enough to be in the working position because he depends on the other employers paper work to get information.

CHAPTER 11

SALES TAX


-A person or business to whom merchanside or services are sold is called a customer.


-A tax on a slae of merchandise or services is called a sales tax.


-The amount of sales tax collected is a business liability until paid to the state government.





SALES OF MERCHANDISE


-A sales of merchanside may be for cash or on account, it increases the revenue of a business.


-A sale in which cash is received for the total amount of the sale at the time of the transaction is called a cash sale.


-A sale in which a credit card is used for the total amount of the sale at the time of the transaction is called a credit card sale.





SALES INVOICE


- When merchandise is sold on account, the seller prepares a from showing what has been sold.


- An invoice describes the goods or services sold, the quanity, and the price.

WHAT IS THE DIFFERENCE?

PROPRIETORSHIP Vs. PARTNERSHIP

PROPRIETORSHIP

*A business owned by one person, also called a sole proprietorship

*All debts of the business are debts of the owner.

*The proprietor has the right to all the profits from the business and also responsibility for all the firm's liabilities.

PARTNERSHIP

*A business in which two or more persons combine their assets and skills.

*Each partner shares a fixed proportion of profits and losses.

*Both owners are equally and personally liable for the debts from the business.

PROPRIETORSHIP ADVANTAGES AND DISADVANTAGES

*In most cases, there are no legal formalities to forming or dissolving a business.

* A sole proprietorship often has the advantage of the least government regulations.

*This form of business will have unlimited liability, therefore, if the business is sued the proprietor is personally liable.

*The life span of the business is also uncertain.

PARTNERSHIP ADVANTAGES AND DISADVANTAGES

*You don't have to register with your state and pay an often hefty fee, as you do to establish a corporation or limited liability company.

*New partners can bring in new skills and experience that may help the business to make more profit.

*All partners are personally liable for business debts and liabilities.

*At some point, there most certainly will be disagreements in management plans, operational procedures, and future vision for the business.