Posting journal entries to general ledger accounts


  • Posting Journal Entries to Ledger Account and Trial
  • The General Ledger
  • Posting journal entries to ledger accounts. Made easy!
  • How to Post Journal Entries to the General Ledger
  • General ledger
  • T-Accounts
  • Posting Journal Entries to Ledger Account and Trial

    Chapter 2: The Accounting Cycle Search for: Posting to the General Ledger Organizing Journal Entries We have covered a lot of new words and concepts in this chapter, this video gives you a preview of what happens next when we organize the journal entry information: A journal entry is like a set of instructions. The carrying out of these instructions is known as posting. The video provides a clear description of where in the accounting cycle posting occurs.

    As stated earlier, posting is recording in the ledger accounts the information contained in the journal. The good news is you have already done the hard part — you have analyzed the transactions and created the journal entries. When you post, you will not change your journal entries. If you debit an account in a journal entry, you will debit the same account in posting.

    If you credit an account in a journal entry, you will credit the same account in posting. After transactions are journalized, they can be posted either to a T-account or a general ledger. Remember — a ledger is a listing of all transactions in a single account, allowing you to know the balance of each account. The ledger for an account is typically used in practice instead of a T-account but T-accounts are often used for demonstration because they are quicker and sometimes easier to understand.

    The general ledger is a compilation of the ledgers for each account for a business. Below is an example of what the T-Accounts would look like for a company. In contrast to the two-sided T-account, the three-column ledger card format has columns for debit, credit, balance, and item description. The three-column form ledger card has the advantage of showing the balance of the account after each item has been posted. It is very important for you to understand the debit and credit rules for each account type or you may not calculate the balance correctly.

    Notice that we give an explanation for each item in the ledger accounts. Often accountants omit these explanations because each item can be traced back to the general journal for the explanation.

    The following are examples of Ledger cards for the some of the accounts from the same company shown in T-accounts above see how you get the same balance under either approach. Notice in these ledger examples that Cash is an asset and a debit increases an asset and a credit decreases an asset. Accounts Payable is a liability account and Design Services Revenue is a revenue account but both accounts increase with a credit and decrease with a debit.

    Posting is always from the journal to the ledger accounts. Postings can be made 1 at the time the transaction is journalized; 2 at the end of the day, week, or month; or 3 as each journal page is filled.

    The choice is a matter of personal taste. When posting the general journal, the date used in the ledger accounts is the date the transaction was recorded in the journal, not the date the journal entry was posted to the ledger accounts. The accounting equation serves as an error detection tool.

    If at any point the sum of debits for all accounts does not equal the corresponding sum of credits for all accounts, an error has occurred.

    It follows that the sum of debits and the sum of the credits must be equal in value. Double-entry bookkeeping is not a guarantee that no errors have been made—for example, the wrong ledger account may have been debited or credited, or the entries completely reversed. If you would like to see what it looks like to move journal postings into a general ledger in Excel, watch this additional video.

    Licenses and Attributions All rights reserved content Posting to a Ledger. Authored by: ptionlinedivision. License: All Rights Reserved. Authored by: NotePirate.

    The General Ledger

    How to Post Journal Entries to the General Ledger February 26, Vic 5 Comments After journalizing your business transactions, that is, recording them in the general or special journals, the next step is to post those journal entries in the general ledger accounts.

    We will also use the sample journal entries made on that article in our discussion about posting entries from general journal to the general ledger here. So check out that post for your reference.

    What is the general ledger? The general ledger is a primary accounting record used by a business in tracking its individual account balances. While the general journal is where you record accounting transactions in a chronological order, the general ledger is where you post and group those accounting entries per account to easily track its balances.

    You cannot easily check the balance of the cash account in the general journal since it records entries according to the date of transactions along with other accounts. But you can easily track it in the general ledger cash account. The general ledger accounts are used in the preparation of the trial balance and the financial statements.

    The process of recording a debit or credit in the general ledger is called posting. Aside from using the general ledger, companies may also use a number of subsidiary ledgers or subledgers, such as accounts receivable and accounts payable subledgers.

    These types of ledgers are usually used by companies who need to keep track of their account balances per customer or per supplier. All the entries that are posted to these subledgers will transact through the general ledger account. For the purpose of our simple tutorial, we will only discuss about the general ledger. Sample general ledger forms The general ledger includes the name of the account e.

    Check out the following 2 different samples of a general ledger account. A general ledger account presented as a T account. A general ledger account presented with a balance column.

    We will use the second form for posting our sample journal entries to the general ledger here. You can also create the sample forms above using Microsoft Excel.

    All you need to do is to pick the entries from the general journal and post them in the general ledger per account.

    The carrying out of these instructions is known as posting. The video provides a clear description of where in the accounting cycle posting occurs.

    Posting journal entries to ledger accounts. Made easy!

    As stated earlier, posting is recording in the ledger accounts the information contained in the journal. The good news is you have already done the hard part — you have analyzed the transactions and created the journal entries.

    When you post, you will not change your journal entries. If you debit an account in a journal entry, you will debit the same account in posting. If you credit an account in a journal entry, you will credit the same account in posting. After transactions are journalized, they can be posted either to a T-account or a general ledger. Remember — a ledger is a listing of all transactions in a single account, allowing you to know the balance of each account.

    How to Post Journal Entries to the General Ledger

    The ledger for an account is typically used in practice instead of a T-account but T-accounts are often used for demonstration because they are quicker and sometimes easier to understand. The general ledger is a compilation of the ledgers for each account for a business. Below is an example of what the T-Accounts would look like for a company. In contrast to the two-sided T-account, the three-column ledger card format has columns for debit, credit, balance, and item description.

    The three-column form ledger card has the advantage of showing the balance of the account after each item has been posted. It is very important for you to understand the debit and credit rules for each account type or you may not calculate the balance correctly.

    Notice that we give an explanation for each item in the ledger accounts. Often accountants omit these explanations because each item can be traced back to the general journal for the explanation.

    General ledger

    Since so many transactions are posted at once, it can be difficult post them all. In order to keep track of transactions, I like to number each journal entry as its debit and credit is added to the T-accounts. This way you can trace each balance back to the journal entry in the general journal if you have any questions later in the accounting cycle.

    T-Account Format Explained The standard T-account structure starts with the heading including the account name. This section usually forms the top of the T. The left column is always the debit column while the right column is always the credit column. You can see that in the posting examples in the next section.

    How to Post Journal Entries to T-Accounts or Ledger Accounts Once journal entries are made in the general journal or subsidiary journals, they must be posted and transferred to the T-accounts or ledger accounts. This is the second step in the accounting cycle.

    T-Accounts

    The purpose of journalizing is to record the change in the accounting equation caused by a business event. Ledger accounts categorize these changes or debits and credits into specific accounts, so management can have useful information for budgeting and performance purposes.

    Since management uses these ledger accounts, journal entries are posted to the ledger accounts regularly. Most companies have computerized accounting systems that update ledger accounts as soon as the journal entries are input into the accounting software. Manual accounting systems are usually posted weekly or monthly.


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