ExplanationIt refers to the transfer of closing balance from various accounts to the general ledgerA general ledger is an accounting record that compiles every financial transaction of a firm to provide accurate entries for financial statements. The double-entry bookkeeping requires the balance sheet to ensure that the sum of its debit side is equal to the credit side total. A general ledger helps to achieve this goal by compiling journal entries and allowing accounting calculations. read more. The posting varies as per the size of the organization and the volume of transactions. Some large organizations record the monthly closing balance. The balance is directly transferred to a general ledger for small organizations because of the low volume of accounting transactionsAccounting Transactions are business activities which have a direct monetary effect on the finances of a Company. For example, Apple representing nearly $200 billion in cash & cash equivalents in its balance sheet is an accounting transaction. read more. This is also done where there are several branches of the organization, and separate accounts of branches are maintained or when the parent companyA holding company is a company that owns the majority voting shares of another company (subsidiary company). This company also generally controls the management of that company, as well as directs the subsidiary's directions and policies.read more maintains the accounts of its subsidiaryA subsidiary company is controlled by another company, better known as a parent or holding company. The control is exerted through ownership of more than 50% of the voting stock of the subsidiary. Subsidiaries are either set up or acquired by the controlling company.read more or associate company. It is more of a manual process and involves workforce work. In the case of posting, consolidation of accounts is also required. With the advancement of technology, posting has become a traditional process, and it is rapidly eliminated due to the availability of automated software. You are free to use this image on your website, templates, etc., Please provide us with an attribution
linkArticle Link to be Hyperlinked Steps in Posting in AccountingSteps in posting involve the following: Step #1 – Create the Sub-Ledgers and General Ledgers with Various TransactionsVarious accounts and transactions are to be recorded in their respective ledgers. Step #2 – Create the General LedgerThe general ledger is the ledger in which balances of all sub-ledgers and general journals are to be transferred. Step #3 – Enter the Name and Account in General Ledger with DetailsTransfer in general ledger takes place with the name of the account and amount carried forward in subledgerA subledger is a subset of several general ledgers used in accounting that may include all accounts receivable, payable, prepaid expenses, or fixed assets associated with financial transactions. It is extremely difficult to keep track of all transactions in a large organization's common ledger; therefore, a subledger is the ideal solution for recording entire transactions.read more or general journal along with entry details. Step #4 – Enter the Debit and Credit Balances in the LedgerDebit and credit balances are to be entered into the general ledger as per the balance in the account. The debit balanceIn a General Ledger, when the total credit entries are less than the total number of debit entries, it refers to a debit balance. A debit balance is a net amount often calculated as debit minus credit in the General Ledger after recording every transaction.read more increases the asset, whereas the credit balanceCredit Balance is the capital amount that a company owes to its customers & it is reflected on the right side of the General Ledger Account. Usually, Liability accounts, Revenue accounts, Equity Accounts, Contra-Expense & Contra-Asset accounts tend to have the credit balance. read more increases the liability in the accounts. Step #5 – Maintain the Account for each Period SeparatelyThe general ledger for each period is to be maintained separately to avoid double balancing or mess in the accounts. Step #6 – Correct any ErrorsThe final step is to cross verify the balances and recheck whether there are any mathematical errors; if any of the errors are found, rectify them to maintain proper records. Posting in Accounting ExamplesThe details of XYZ internationals are as under: XYZ international issues 20 invoices to its customers and records each transaction in the sales account and the respective debtor’s account. Also, the company purchased from 10 suppliers the records in purchases accounts and respective creditors’ accounts. In addition, some of the payable liability is recorded in the general journal account. The details are as under: Prepare General Ledger. Solution: Rules
Importance You are free to use this image on your website, templates, etc., Please provide us with an attribution linkArticle Link to be Hyperlinked
ConclusionPosting in the ledgerLedger in accounting records and processes a firm’s financial data, taken from journal entries. This becomes an important financial record for future reference. It is used for creating financial statements. It is also known as the second book of entry.read moreis the accounting process. The balances of the general journal and various sub-ledgers are to be transferred at various intervals, ranging from daily to yearly. It is very helpful and useful in large organizations, as keeping track of the balance becomes very easy. Also, with the posing in a ledger, the arithmetic accuracy of the accounts can be verified, and the balances can be analyzed thoroughly to maintain the proper and accurate records. Posting in the ledger is a manual process; hence workforce is needed. It ensures that all assets and liabilities are to be recorded properly. The balances of nominal accounts are directly transferred to the profit and loss account. The balances related to balance sheet items are to be transferred to the general ledger account. It helps keep the updated records, but with the advancement of technology and the availability of various software, the posting in balance has become the traditional concept. Recommended ArticlesThis has been a guide to What is Posting in Accounting & its Definition. Here we discuss the step to calculate the posting in accounting and examples and rules and importance. You can learn more about it from the following articles –
What are the 5 steps of posting?What Are the Five Steps of Posting in Accounting?. Enter Account Name and Number. ... . Post the Entry Details. ... . Enter the Debits and Credits. ... . Find the Running Balances. ... . Correct Any Errors.. What are the steps to post in general ledger?How to post journal entries to the general ledger. Create journal entries.. Make sure debits and credits are equal in your journal entries.. Move each journal entry to its individual account in the ledger (e.g., Checking account). Use the same debits and credits and do not change any information.. What are the 5 steps in recording a transaction in a journal?Journalizing Transactions: A Step-By-Step Guide. CLASSIFY BUSINESS TRANSACTIONS BY ACCOUNT. Take a look at each business transaction and classify it by the type of transaction. ... . DETERMINE THE ACCOUNT TYPE THAT'S INVOLVED. ... . APPLY THE FUNDAMENTAL ACCOUNTING EQUATION TO THE TRANSACTION. ... . JOURNALIZE THE TRANSACTION.. What is posting from the journals to general ledger?Posting to the general ledger involves recording detailed accounting transactions in the general ledger. It involves aggregating financial transactions from where they are stored in specialized ledgers and transferring the information into the general ledger.
|