Accountancy · Ch 3 — Recording of Transactions - I
Posting from Journal
Posting from Journal
Posting from Journal
Posting is the process of transferring entries from the journal (the book of original entry) to the ledger. The journal records transactions in chronological order, but to see the complete effect on a single account — say, Cash or Sales — you need to bring all related entries together in one place. That is what posting does: it groups all transactions affecting a particular account so you can draw meaningful conclusions and continue the accounting process.
Posting is done periodically — weekly, fortnightly, or monthly — depending on the volume of transactions and the convenience of the business.
Steps in Posting from Journal to Ledger
Step 1: Locate in the ledger the account that is to be debited, as shown in the journal entry.
Step 2: Enter the date of the transaction in the date column on the debit side of that account.
Step 3: In the 'Particulars' column on the debit side, write the name of the account that appears as the credit in the journal entry. For example, if furniture was sold for cash ₹34,000, the journal entry is:
- Debit Cash Account
- Credit Furniture Account
When posting to the Cash Account (debit side), you write 'Furniture' in the particulars column — this tells you that cash came in from selling furniture. When posting to the Furniture Account (credit side), you write 'Cash' in the particulars column. The same logic applies to every journal entry.
Step 4: Enter the page number of the journal in the folio column (J.F.) of the ledger. At the same time, in the journal, write the page number of the ledger where that account appears. This cross-referencing helps in tracing entries.
Step 5: Enter the relevant amount in the amount column on the debit side.
The same procedure is followed for the credit side of the account that is to be credited.
An account is opened only once in the ledger. All entries relating to that account are posted on either the debit side or the credit side, as the case may be. You do not open a new account for each transaction.
Key Observations from the Posting Process
Notice how each journal entry generates two postings — one on the debit side of one account and one on the credit side of another account. For instance, the first entry (cash brought in as capital) posts ₹2,00,000 on the debit side of Cash Account and ₹2,00,000 on the credit side of Capital Account.
When a transaction involves a personal account (like Mohit Bros.), the posting works the same way. On June 20, goods are sold on credit to Mohit Bros. — Mohit Bros. is debited (becomes a debtor) and Sales is credited. Later, on June 28, when Mohit Bros. pays, Bank is debited and Mohit Bros. is credited, reducing the debtor balance.
In the particulars column of a ledger account, you always write the other account involved in the transaction — not the name of the account you are posting to. So in Cash Account, you write 'Capital', 'Sales', etc., not 'Cash'.