All journal entries are similarly posted to accounts in general ledger. So the amount of the journal entry ($25,000) is written on the debit side of the cash account and credit side of the sales account. The debit part of the above journal entry is “cash account” and the credit part is “sales account”. The journal entry of the above transaction and its posting to ledger accounts is illustrated below: Transaction: On January 1, 2015, US company sold goods to customers for cash $25,000. To have a better understanding of the posting process and to illustrate the format of ledger accounts, we need to take a transaction, prepare a journal entry and then transfer it to the relevant ledger accounts. The amount of the account (or accounts) in the debit part of the entry is written on the debit side of the respective account and the amount of the account (or accounts) in the credit part of the entry is written on the credit side of the respective account in the general ledger. Both the parts essentially contain one or more accounts. The visual presentation of journal entries, which are recorded in the general ledger account is known as the T-Account T-AccountT Account is a visual. The information that has already been recorded in the journal is just transferred to the relevant ledger accounts in the general ledger.įor the purpose of posting to general ledger, we can divide a journal entry into two parts – a debit part and a credit part. No new information is needed to prepare ledger accounts. The process of posting journal entries to ledger accounts is very simple. The format of ledger account and posting process The book in which ledger accounts are maintained is known by various names such as ledger, ledger book or general ledger. Ledger accounts are a way of presenting and grouping transactions relating to a particular account at one place.
> Normal Balance using for Debit and Credit Treatment.Posting from general journal to general ledger (or simply posting) is a process in which entries from general journal are periodically transferred to ledger accounts (also known as T-accounts). It is the second step of accounting cycle because business transactions are first recorded in the journal and then they are posted to respective ledger accounts in the general ledger. Similarly, bring down the credit balance on the credit side be writing the words in the Description column “Balance b/d”.
Calculate the difference between the two sides.Find the total of debit side and find the total of credit side.This is Four Step process for Standard General Ledger Format. In the reference column of the ledger account the page number of the journal is noted.
In the reference column of the general journal the code or page number of ledger account are noted.The credit part of Journal Entry is recorded on the credit side of the relevant account by debit account name (Source).The debit part of journal entry is recorded on the debit side of the relevant account by credit account name (Source).The process of posting is simple and involves following Four Steps: