 Hello, in this lecture, we're going to be concentrating on posting transactions, concentrating on the account of accounts payable and we will be recording the accounts payable here on the trial balance as well as recording it in the subsidiary ledger as well as taking a look at what the general ledger would be for transactions affecting accounts payable. So as we can see the subsidiary ledger is going to be broken out by vendor in this case accounts payable representing who we owe we owe money to folks those folks being vendors. And so we're just going to have these three vendors in the set. And then we also see that the general ledger is going to be in order by date. Every account of course has a general ledger account. However, we're just going to look at the general ledger account for accounts payable in order to compare and contrast it with the accounts payable account for the subsidiary ledger account here. So what we have on this worksheet is a trial balance where we're going to have the assets in green liabilities in orange and then the equity in the light blue and then the darker blue being the income statement revenue and expenses. We can see that we are in balance by the fact that the debits which are going to be represented with positive non bracket numbers minus the credits are equal to zero. That's what this zero represents meaning we are in balance. We can see that net income is going to be the revenue, the credit minus the debit of 309,000. That is revenue and not a loss in this case. We're going to post our activity here and end up with an ending balance to give us a quick recap of the effect on the trial balance accounts from these journal entries. We can also see that we have our adjusting or our balancing accounts up here as well in the form of assets, the green accounts equal liabilities plus equity. Okay, so let's see what we have over here. We're going to say we're going to start off on one one. I'm going to say purchase supplies on account from office depot. So going through our normal questions, we're going to say is cash affected? No, in this case, we purchased it on account. So that means that we have an IOU account. We owe someone money that account is called accounts payable. Now accounts payable is a liability liability that credit balances. We probably haven't worked with credit balances as often as some other types of accounts. Therefore, it might be easier to think about what we received first in order to determine whether we should debit or credit it. And that will help us out with which way we should go for the accounts payable. So let's think about the other half of the journal entry, which is we bought supplies. So supplies we see up here we have an asset for supplies. If we look at our trial balance and we're going to record it as an asset, not an expense in this case, because we're going to assume that supplies are large enough that they are material. We were going to record them as an asset, then count them at the end of the time period and then record the expense based on the count in terms of how much we have used. So right now we're going to buy it. It's an asset. Assets have debit balances. We got more of it. Therefore, we need to make it go up. How do we make something go up? We do the same thing to it, which in this case would be another debit. So I'm going to debit that. I'm going to put my cursor in G7. Right click and copy that account. Then put our cursor in C5. Right click and paste it 123. So I'm going to paste that there. Then the amount will be for 680. So 680 is the debit. Debits generally go on top. Then we're going to have the credit. If we have only two accounts affected, then we have to have an equal number of debits and credits. So if we have a 680 debit, we have a 680 credit. I'm going to represent the credit with a negative number here. So it's going to be a negative 680. So and then once we hit enter, it will format the cell for us automatically. So we'll select enter, puts brackets around the cell and formats it because of the formatting of the Excel account. Now we're going to see what account we need to put down here. We already said what it was. It's accounts payable. Does it make sense that we would credit accounts payable? Well, accounts payable is a liability. Liabilities have credit balances. The bad thing needs to go up because we owe more money. How do we make something go up? We do the same thing to it. If this is a credit balance account, the same thing would be another credit. So it does make sense that we would credit it. Therefore, I'm going to copy the accounts payable here. Right click and copy that account and paste it on the bottom in cell C6. Right clicking and pasting 123. So just the values only. All right. Now we're going to post this to three areas. The first of those three being the trial balance. I want to post it into this middle area in the trial balance to give a quick recap of what will happen from the beginning balance to the ending balance. Therefore, we're going to find supplies first. So here's supplies. That's what we're going to post. We're going to post it to the supplies here. We're going to post it to the blue area next to supplies in cell I7. So within I7, we're going to select equals and point to the 680. What's going to happen when we hit enter? The debit will go up in the debit direction because we're doing the same thing to it. And it should put us out of balance. So there it went up. Supplies goes up. And we, of course, are out of balance now. Then we're going to post the second half to accounts payable. Accounts payable is here. Accounts payable is here on the trial balance. We're going to be in the blue area next to accounts payable in I10. So within I10, we're going to select equals and point to the 680 there. What's going to happen when we post that? The zero is going to go up in the credit direction to 680 and put us back in balance down here. Like so. All right. So then we have that. And now we're going to post this to our two other locations. Why? Because the often the question is with accounts payable is how much do we owe people? Answer. Trial balance says we owe people 680 dollars. Then the next question, who do we owe because and when do we owe it? Because we got to write a check to somebody. And in order to answer that question, we need to track it not by date, but by vendor. That is the subsidiary ledger. So we're going to record this same information in the subsidiary ledger. And in this case, we are paying our bot stuff from Office Depot. Apparently, we're going to pay them later. So we're going to be in the same credit side. We're going to have the credit side here in Office Depot's account equals. We're going to point to that same 680 recording it again. And now we see that the total for all the vendors, the people that we owe adds up to 680, which ties out to the trial balance. Now we're also going to record this on the general ledger. Every account has a general ledger and the general ledger is going to be in order by date of transaction. So we're just going to compare the general ledger for the accounts payable, not showing the general ledger for all other accounts, just so we can have some comparing and contrast in between the standard general ledger and the added ledger that we need for an account like accounts payable being the subsidiary ledger. So in the general ledger, it's just going to be an order by date. We're just going to record the same information in U9 equals that same 680. So that's going to make it go up to 680. So we can see that the general ledger has 680 in it. The subsidiary ledger has 680 in it. The trial balance has 680 in it. Why do we need three of these things to show us the information? Because the trial balance gives us the amount we owe, but doesn't tell us who we owe it to. The general ledger gives it to us by date of when it happened, but doesn't tell us who we owe it to necessarily. And the subsidiary ledger does by breaking out who we owe by vendor. Okay, so then we're going to go down here and we're going to say the next account was going to be on 2-1, where it says paid office depot for purchase of office supplies. So we purchased it, now we're paying it. So that means is cash affected? Yeah, we paid with cash. So cash has a debit balance. We need to make it go down. We're going to make it go down by doing the opposite thing to it, which in this case would be a credit. So I'm going to copy the cash. I'm going to put that on the bottom. So here's the date. I'm going to be on like the bottom of the date down here in C9, right-clicking and pasting 1, 2, 3, just the values only. Then we're going to go in the credit column. We're going to represent the credit with a negative in this case, which will put brackets around it for our formatting in Excel of 680. There we have it. If we credit something, we're also going to debit something and the debits generally go on top. So up here in cell D8, we're going to put in the positive 680. And then the only question is, what should this account be that we are going to debit? And why are we going to pay someone money? Because we bought stuff, but we bought it in the past and we already recorded the stuff we bought being the supplies here. And now we're paying off the bill that we owe, designated by the IOU, the accounts payable. So the accounts payable has a credit in it. We know that we're going to debit it. Does that make sense? Yeah, well, accounts payable has a credit. We need to make it go down because we no longer owe it because we paid it. How do we make something go down? We do the opposite thing to it as what it is. If it's a credit, the opposite's a debit. Therefore, yes, it makes sense that we should debit it. So we're going to copy that account. We're going to put that up on top in cell C8, right-clicking and pasting 1, 2, 3. All right, we're going to record this to the three locations now. First of those locations being the trial balance. So we're going to record the accounts payable. So here's the accounts payable. Here's the accounts payable. There's something in accounts payable in the blue area. What's in there? E6 is in there. I don't want to delete that. I'm going to double-click on that, go to the end of it, and then add to it. So I'm going to put a plus sign here, adding to it, and then post it to the add 680. So we have E6 plus D8, and what's going to happen when we hit enter? It's going to go down to zero because we don't owe any money anymore. And then we're going to post the cash. So we're up here in I5 equals, and then we'll point to the 680 for cash. What's going to happen? It's going to go down, and we'll go back in balance down here. So enter, it goes down. We're back in balance. All right, so now we're going to post this same information to the subsidiary ledger. We're going to go over to the subsidiary ledger and Office Depot. We don't owe them any money anymore. Therefore, we're going to go down to L10 here in the debit side of Office Depot. Count in the subsidiary ledger equals pointing to the 680 debit. And once we hit enter, that 680 credit will go down to zero. So now we have zero for all the vendors again, and we are back in balance, and it ties out to the trial balance. And this is what, of course, a normal ledger account should look like. We racked up the bill, then we pay it. We're going to rack up a bill, then we pay it. That's what accounts payable looks like. And the same pattern, of course, will be in the general ledger, which will be by date only, not by vendor. So we're just going to record this same information in T10 equals this same activity, 680, bringing the balance down to zero. So now the general ledger zero, the subsidiary ledger zero, and the trial balance zero. All right, let's see what happens next. We're now on 2-2. We're going to skip a line. Received auto service on account to be paid in the future. All right, so we got auto service, and we're going to pay it in the future. And therefore, is cash affected? No, we're going to pay it in the future. So we got service, but we're going to pay it in the future. We owe money. What's the account that means we owe money in the future? Accounts payable. Accounts payable, though, is a liability account. It might be easier for us to think about what we received, and what did we receive? Auto service. Now, we might be thinking, well, auto could be an asset, but this is the service, which is probably an expense.