Page 71 - DCOM101_FINANCIAL_ACCOUNTING_I

Unit 7: Posting to Ledger and Balancing

It is a fundamental book of accounts which mainly highlights the status of the accounts. Notes

Example: Plant & Machineries’ Ledger A/c should reveal the transactions of the sale and
purchase of the plant & machinery.
The journal entries that are recorded nothing but posting of the entries in the ledger book of
accounts. Posting/entering the journal entries are routinely carried out immediately after the
transactions.

Prior to discussing the posting of journal entries into the ledger accounts, everybody should
know the contents of the ledger. The ledger is segmented into two different categories.
The proforma of a Ledger account is given below:

Dr. Name (Title) Page No……. Cr.
Date Particulars L.F. Amount (`) Date Particulars L.F. Amount (`)

Journal entries are divided into two categories, viz:

1. Debit item of the transaction
2. Credit item of the transaction
Once the journal entries are identified for classification, the entries should be recorded in

accordance with the date order of the transactions in the respective pages.
While recording a transaction, normally a journal entry has got an impact on two or even three
different accounts.

7.2 Ledger Posting

It is a process of recording the transactions under one group from the early process of journalizing.
Without journalizing, ledgering is not meaningful. The process of ledgering involves various
steps. The process begins only at the completion of journalizing and ends at the end of balancing
of journal accounts.

Rules of Posting in Ledger Account

At the time of posting of transactions from Journal to ledger the following points/rules should
be kept in mind:

1. In the debit side of a ledger account, the word ‘To’ is used while in the credit side word ‘By’
is used.
2. All those accounts are opened in the Ledger which are given in the Journal.
3. All the debit items of an account given in the Journal are posted in the debit side of the
respective account. And all the credit items of an account given in the Journal are posted in
the credit side of the respective account in ledger.
4. The name of the account, in which the posting is being made, is not written. But the posting
is done by the name of the other account given in the opposite side of that entry in the
Journal.

5. At the time of posting if the page is full and account is not complete, its total is carried to
the next page and then remaining posting is done.

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