What is Posting?

Posting From Journal to Ledger Accounts

The procedure of transferring an entry from a journal to a ledger account is known as posting. It involves transferring of debits and credits from journal book to the ledger accounts, if an account in a journal entry has been debited it will be posted in the ledger account by entering the same amount on the debit side/column of the respective ledger account, similarly if an account in a journal entry has been credited it will be posted in the ledger account by entering the same amount on the credit side/column of the respective ledger account.

In the world of ERPs posting has been automated and reduced to just a click of button. Posting is an important part of accounting since it helps to keep an updated record of all ledger balances & at the same time it can help a user to track how the ledger balances have changed over a period of time.

 

Example

Journal Entry for Furniture worth 1,000 Bought in Cash

Example Journal Entry for Posting

 

Steps of Posting the Above Journal Entry in Ledger Account

  • Identify ledger account of the 1st account used in journal entry (debit), in this case it will be “Furniture A/C”
  • Mention date of transaction under the head “Date”
  • On the debit side of ledger account under the head “Particulars” with the prefix “To” write name of the account which has been credited in the journal entry, in this case it will be “Cash A/C” (Refer to the image below)
  • Under the head “Amount” enter the currency value of debit as mentioned in the journal entry
  • Identify ledger account of the 2nd account being used in the journal entry (credit), in this case it will be “Cash A/C”
  • Mention date of transaction under the head “Date”
  • On the credit side of ledger account under the head “Particulars” with the prefix “By” write name of the account which has been debited in the journal entry, in this case it will be “Furniture A/C” (Refer to the image below)
  • Under the head “Amount” enter the currency value of credit as mentioned in the journal entry

 

Illustration of Journal being posted in Ledger

 

>Read Preparing Trial Balance From Ledger