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unit-6-ledger

Unit-6 Ledger

In this unit you will learn about the second stage i.e., recording in the ledger.

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Explain the rules regarding posting of journal entries into ledger accounts.

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Learning Pundits Content Team

Written on Jun 25, 2019 12:54:25 PM

The journal entries form the basis for recording in the ledger accounts, and the process of entering transaction in the ledger is called 'Posting'. When a journal entry has to be posted in the concerned ledger accounts, the following procedure is adopted.

1.Every journal entry will have to be posted into all those accounts which have been debited and credited in the journal entry. For example, for cash sales, Cash Account is debited and Sales Account is credited in the journal. When this entry is posted in the ledger, it must be posted in Cash Account as well as in Sales Account.

2.Posting will be made on the debit side of the account which has been debited in the journal, and the credit side of the account which has been credited in the journal. In case of above example of the cash sales, posting will be made on the debit side of Cash Account, as it has been debited in journal and the credit side of Sales Account, as it had been credited in the journal.

3.Whether the posting is made on the debit side or the credit side, first of all the date of the transaction (as given in the journal) will be entered in the date column. The method of recording the date in the ledger account is the same as in journal.

4.While posting on the debit sick of an account, in the particulars column we shall write the name of the account which had been credited in the journal and add the word 'To' before the name. Similarly while posting on the credit side of an account, we shall write the name of the account which has been debited in the-journal and add the word 'By' before the name. In case of the above example, we shall write 'To Sales A/c' in particulars column on the debit side of Cash Account; and 'By Cash A/c' in particulars column on the credit side of the Sales Account.

5.The journal entries contain 'narration'. But it is not required in the ledger accounts. Similarly, there is no need to draw a line between the two entries in an account as is done in the journal. Note that posting in the ledger account is considered complete only when both the debit and the credit aspects of all journal entries have been posted.

6.In the folio column, we shall mention the page number of the journal where the concerned journal entry appears. At the same time, the page number of the ledger accounts will be entered in the 'L.F.' column in the journal so as to complete the cross reference.

7.The amount involved in the journal entry shall be entered in amount columns of both the accounts.