Posting

We now know about Journal entries. UNFORTUNATELY…they still do not give us the whole picture of the business’s finances. We need to provide more information!

The Balance Column Account We have looked at the two-sided ledger account. -Debits on the left -Credits on the right.

The Balance Column Account

Opening an Account Very often, we have to make an entry to an account that does not exist in the ledger. When this happens we have to open an account. We have to prepare a new one and put it in its proper place in the ledger. We need to give it a title and number for identification. If it is an asset…what number range would it get? What about an Expense?

Posting You have learned that each accounting entry is recorded in the journal. It is then transferred, or posted, to the ledger. Posting is the process of moving information from the journal to the ledger. Every dollar amount has to be posted separately. There are 6 steps:

Six Steps in Posting There are 5 steps in the Ledger: 1. Record the date. Use the next unused line 2. Record the page number of the journal in the P.R. column of the account. Write the letter J (for journal) in front of that number (J14 for example). Record the amount. Debit amounts are entered in the debit columns. Credits are entered in the credit columns. Calculate the new balance. Indicate whether the balance is debit or credit. Enter the new account balance you calculated into the balance column.

Six Steps in Posting One step in the journal 6. Record the number of the ledger account that received the posting. Enter this account number in the posting reference (P.R) column on the same line as the amount posted. This step is very important. It proves that the amount was posted. If you see an amount with no P.R. number, it was not posted, and the trial balance will not be balanced.

Six Steps in Posting This needs to be posted:

Cross-Referencing This is when we put the page from the journal into the accounts and when we put the account pages in the journal.. Why do we do this? 1. Entries in the journal can be followed to the accounts where they were posted. 2. Entries in the accounts can easily be traced back to their source in the general journal. 3. If the posting process is interrupted, it is easy to tell where to begin again. Journal amounts that have been posted will have the ledger account number entered.

Forwarding Procedure When an account is full, the account must be continued on a new page. Forwarding is the process of moving the account to a new account page by bringing the date and the balance

Accounting Cycle