Posting to the

General Ledger

Posting: the process of recording

amounts as credits and debits in the

pages of the general ledger from the

General Journal.

Posting to a T-account

Earlier we looked at ledger accounts in the form of a T.

The account name was on the top bar of the T and only the dollar amounts were recorded—debits under the left arm of the T and credits under the right arm of the T.

Posting to the Ledger

• In the real world, ledgers have many more elements. Typically businesses

use a style of ledger account called the balance column account.

• The balance column account has three money columns: one for debit

amounts, one for credit amounts, and a separate one to keep a running

balance.

Components of a Ledger

• The Account name is entered in the top left cell and the account number in the top

right. The account number comes from the ―Chart of Accounts‖.

• Next is the Date column. For multiple entries on same date each entry has its own

line.

• The Particulars column is usually blank except for when the balance is transferred

to a new page.

• The P.R.(Posting Reference) indicates the page number of the original journal entry

which contains the particulars for the transaction. - J4 means – General Journal

page 4.

Components of a Ledger continued

• The Debit and Credit columns record the increases and decreases in the account.

• The Balance is calculated (using a function) after each entry.

Note: If the Balance is contrary to the type of balance expected for an account, the

balance is shown as a negative. For instance, if the Bank is overdrawn, the software

will add a ‗negative‘ sign to the Balance figure.

Posting refers to the process of

transferring information from the General

Journal to the Ledger.

Let‘s post the following journal page to the

Ledger.

Posting

Sample Journal, ready to be posted.

6 Steps in Posting

Step 1 - Turn to the proper account in the ledger.

6 Steps in Posting

Step 2 - Record the date. Use the next

unused line in the account.

6 Steps in Posting

Step 3 - Record the page number of the journal in the

posting reference (P.R.) column. Write the letter

J, for journal, in front of this number.

6 Steps in Posting

Step 4 - Record the amount. Debit amounts are

entered in the debit column, credit amounts in

the credit column.

6 Steps in Posting

Step 5 – Calculate the new account

balance in the balance column. Use a function. Instruct Excel

to start with the previous

balance, add the current row‘s

debits, and subtract the current

row‘s credits.

One of many ways to write the

formula:

in F4 type

‗=F3 + D4 – E4‘

Next use the fill handle to copy

your formula to the cells below.

Confused? Go to Excel‘s help menu

and search for:

‗calculate a running balance‘

Step 6 – Record the account number from the ledger.

Enter this in the posting reference (P.R.) column

on the same line as the amount being posted.

6 Steps in Posting

Ledger

As you post the transactions, if you correctly copied the

formula in the balance column then the Bank account

recalculates itself to keep a running balance.

General Journal

The P.R. on journal page indicates that the amount in that row

has been posted to the appropriate ledger.

Why cross reference? Cross-referencing is the recording of the journal page number in the account and the recording of the account number in the journal.

Reasons for cross-referencing:

Entries in the accounts can easily be traced back to their source in the General Journal.

Entries in the General Journal can be followed through to the accounts in the Ledger where they have been posted.

If the posting process is interrupted, it is easy to tell where to begin again. Journal amounts that have been posted will have the account number entered.