Recording ( Posting ) to the General Ledger

Post to the general ledger

Content

Key to resources

Introduction

Formats for ledger accounts

Summary

This learning guide is based on the following resource:
Textbook
Duncan A (2006) Introductory Accounting, National Core Accounting Publications, Bondi

Key to resources

Resource / Textbook
1 / Chapter 4 ‘Recording transactions’, section 4.4
2 / Chapter 4, section 4.9
3 / Chapter 4, sections 4.4, 4.8 and 4.11
4 / Chapter 4:

self-testing exercises 2 and 3
end of chapter exercises, questions 14, 15 and 17 (b) to (d)

Introduction

The entry of transactions from the journal to the ledger is called postingand the transaction is then said to be posted to the ledger.

The use of ledgers, with accounts for each class or category of transactions, is the classifyingphase in the bookkeeping process.

Formats for ledger accounts

Ledger accounts were conventionally presented in the ‘T-account’ format.

The introduction of bookkeeping machines and, more so, with computerisation, saw the ‘running balance’ (or columnar) account format emerge. This format is now commonly in usage.

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Take a look at the ledger accounts for the T-account format as well as the running balance account format.

Note that the recognition of the debit (column) on the left and the credit (column) on the right still applies in the running balance account format.However, for instruction purposes, because it more clearly demonstrates the debit (left-hand side) and credit (right-hand side), the T-account format will be demonstrated initially.

Chart of accounts

An important adjunct to the ledger system is the chart of accounts.

The accounts in the ledger are not at random, but are in an organised manner according to a chart of accounts appropriate to the business. The accounts will usually be arrangedin accordance with the format of the balance sheet and the income statement.

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Complete the exercises indicated.

Summary

In this learning guide, you have looked at posting entries to the general ledger. You’ve also learnt that the accounts in the ledger are organised according to a chart of accounts appropriate to the business.

Post to the general ledger1