3.8 Posting from Journal to Ledger

The process of transferring amounts entered in the journal to the proper ledger accounts is called posting. The aim is to classify the effects of all transactions on each individual asset, liability, equity, income and expense account.

The steps involved in the posting process are:

1. Locate in the ledger the account to be debited.

2. Enter the date the transaction occurred as shown in the journal.

3. Enter in the explanation column the name of the other ledger account(s) to which the opposite side of the entry will be posted

4. Enter the debit amount in the debit column of the ledger account.

5. Enter in the posting reference column of the ledger account the page number of the journal from which the entry is being posted.

6. Enter in the posting reference column of the journal the account number to indicate that the debit amount was posted.

7. If using running balance ledger accounts, insert the current balance in the account.

8-14. Repeat steps 1 to 7 for credit parts of the entry.

Steps 5, 6, 12 and 13 provide a cross-reference between the accounts in the ledger and the original journal entry.

Cross-referencing is a convenient way to locate additional information relating to an amount recorded in an individual account in the ledger.