What are posting references in a journal?

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Posting Reference

A posting reference column is used to indicate that the entry is posted in the respective ledger accounts and it links the journal with the respective ledger account. The abbreviation used for posting reference is “PR”. It is also called a folio.

 

Purpose of PR Column

When an entity transacts in a large number on daily basis it becomes a troublesome task then for the bookkeeper to ascertain whether the entries are posted in appropriate ledgers. And it may so happen that the entry is posted twice. Later on, tracking that transaction and correcting the same becomes a tedious and time-consuming job.

Hence, to avoid these issues it’s recommended to maintain a posting reference column. Thereby simplifying the job of a bookkeeper.

It can be seen in the third column of the journal book generally. You can also see the same in the image inserted below;

Posting Reference column

Example

When an entity purchases an immovable property for an amount of 100,000 it shall be recorded in the books of accounts as;

Understanding with the help of an example

 

The reference of the page number of the journal book shall be given in the respective ledger accounts to interlink the same. The ledger given below indicates the same;

Interlinking journal book with ledger account

 

Similarly, Cash Account shall also have a PR column wherein the reference of the page consisting of the primary journal entry shall be given. The below-given image presents the same

Posting Reference