Use the first two money columns on either side for the entry of the amounts. Underline these entries through the four money columns. When posting these summary entries, the items “General” on either side will be checked as the details composing them have already been posted.
On the next line write in the Explanation columns on either side, “Net Cash as above,” and extend the total amounts of cash receipts and cash disbursements into the Net Cash columns on their respective sides. Balance the cash book by entering “Balance” on the disbursements journal and extending the amount in the Net Cash column. Show totals at the same level on both sides and draw double lines through all columns on both sides except the Explanation columns. Bring the cash balance down in the receipts journal.
Post completely all books of original entry. When posting the general journal, be very careful to post to the indicated controlling accounts. [See Assignment III, Instructions], for the method to be followed.
Take a trial balance of your general ledger and record it under date of January 31, beginning on page 16 of the journal blank. Write “Trial Balances, 19—” at the top of the page and in the small space over the money columns “January 31.” From the general ledger, copy the names of all accounts, whether or not there are as yet any entries in them, in the order there shown. Do not include the individual customers’ and creditors’ accounts in the above list, for these are taken care of by the inclusion of their controlling accounts. Be careful to write the account name at the extreme left of the explanation space, close to the date column. Leave one line at the bottom of page 16 and at the top of page of 22 for “Totals” and “Totals Forward.”
Since one page is not sufficient to complete the record, continue it on page 22, there recording the rest of the accounts and heading the page and columns as on page 16. The intervening pages will be used as shown in [Assignment VI].
Prove the controlling accounts against their subsidiary accounts. To make this proof, at the top of page 30 of the general journal, write “Balances of Accounts Receivable, 19—” and list the names of all customers’ accounts, writing the account name to the extreme left of the explanation space, close to the “Date” column. Place the words “January 31” in the small space over the first money column, in which the balances of accounts receivable for January will be recorded. Do not use the second money column on this page; this will be used for February balances.
Beginning on page 34, make a similar list of creditors’ accounts. The instructions covering the listing of accounts receivable apply here also, with the exception that the words “Accounts Payable” are to be substituted for “Accounts Receivable.”
List the individual account balances of customers’ and creditors’ accounts for each month, as described above, and record the total of each list in their respective columns. These totals must agree with the balances shown in the corresponding controlling accounts, i.e., the total of customers’ accounts outstanding for January must be equal to the balance of the controlling account, “Accounts Receivable,” shown in the general ledger. A discrepancy between a controlling account and its subsidiary accounts must always be located and corrected.
V
Summarized transactions for February were: