After newspaper entries space made, the following step in the accountancy cycle is to post the newspaper entries right into the ledger. Posting refers to the process of delivering entries in the journal into the accounts in the ledger. Posting to the ledger is the classifying phase of accounting.

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An accountancy ledger describes a publication that is composed of all accounts supplied by the company, the debits and credits under every account, and also the result balances.

This tutorial will administer examples the ledger accounts and will teach you just how the posting process works.


Books of final Entry

While the journal is well-known as books of initial Entry, the ledger is well-known as publications of final Entry.

The Posting Process

Let us highlight how audit ledgers and the posting procedure work using the transactions we had actually in the vault lesson. Click below to see the newspaper entries we will certainly be using.

Let's start. Take it transaction #1 first.

date 2020 Particulars Debit credit Dec 1    
Cash 10,000.00  
Mr. Gray, Capital   10,000.00

Now, go to the ledger and find the accounts. Post the quantities debited and credited come the appropriate side. Debits go to the left and credits to the right. ~ posting the amounts, the cash and also capital account would certainly look like:

Cash Mr. Gray, Capital
10,000.00   10,000.00
   

Explanation: First, us posted the entry come Cash. Cash in the journal entry to be debited so we put the lot on the debit side (left side) of the account in the ledger. Because that Mr. Gray, Capital, it was attributed so the amount is put on the credit side (right side) of the account. And that's it. Posting is simply transferring the amounts from the journal to the particular accounts in the ledger.

Note: The ledger account (or T-accounts) can likewise have areas for account number, summary or particulars, and also posting reference.

Let's shot to article the 2nd transaction.

  5    
Taxes and Licenses 370.00  
Cash   370.00

After posting the above entry, the influenced accounts in the ledger would look like these:

Cash Taxes and Licenses
10,000.00 370.00 370.00
   

There to be a debit to Taxes and also Licenses so we posted that in the left side (debit side) the the account. Cash was attributed so us posted the on the best side the the account.

Notice the after posting transaction #2, we now can obtain a much more updated balance because that each account. Cash now has a balance that $9,630 ($10,000 debit and 370 credit). Nice, right? short article all the various other entries and also we will have the ability to get the balances of every the accounts.

General Ledger Example

A general ledger has accounts that are broad in nature such as Cash, accounts Receivable, Supplies, and also so on. Over there is another type of ledge which we call subsidiary ledger. It is composed of accounts in ~ accounts (i.e., certain accounts that consist of a vast account).

For example, account Receivable might be consisted of of subsidiary account such as Accounts unification – customer A, accounts Receivable – customer B, accounts Receivable – customer C, etc.

Okay – let's go back to the general ledger. In the over discussion, us posted transactions #1 and also #2 into the ledger. If we article all 15 transactions (click below to see the entries) and also get the balances of each account in ~ the end of the month, the ledger would certainly look like this:


Cash Loans Payable
10,000.00 370.00  12,000.00
1,900.003,000.00  
3,200.008,000.00   
4,250.00 500.00 Mr. Gray, Capital
12,000.007,000.00  10,000.00
 1,500.00   3,200.00
 3,500.00  13,200.00
7,480.00 
   Mr. Gray, Drawing
Accounts Receivable  7,000.00
4,250.004,250.00  
3,400.00  
3,400.00 Service Revenue
  1,900.00
Service Supplies  4,250.00
1,500.00  3,400.00
   9,550.00
 
Furniture and also Fixtures Rent Expense
3,000.00  1,500.00
   
 
Service Equipment Salaries Expense
16,000.00  3,500.00
   
   
Accounts Payable Taxes and also Licenses
500.00 8,000.00  370.00
  1,500.00  
  9,000.00   

After every accounts are posted, we have the right to now derive the balances of every account. So exactly how much Cash do we have actually at the end of the month? As shown in the ledger above, the agency has $7,480 at the end of December.

How around accounts receivable? accounts payable? you can discover them all in the ledger.

Note: The above is a simplified and theoretical example of a ledger. In reality, companies have actually a lot much more than 15 transactions! castle may have hundreds or even thousands that transactions in one day. Imagine how an extensive the ledger would be. And, imagine the work necessary in posting that numerous transactions manually.

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With technical advancements however, most accountancy systems today carry out automated posting process. Nonetheless, the over example shows just how a ledger basically works.