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Steps in Ledger Posting

  • Opening entry: First of all, the opening balance (if any) has to be posted. Opening entry are entries for bringing all assets and liabilities as appearing in books on last day of previous year to new books of the New Year.

    Rule of passing opening entry is:

    Debit each asset account by writing ‘To balance brought down’ in particulars column on the debit side of any relevant account.

    Credit each liability account by writing ‘By balance brought down’ in particulars column on the credit side of the relevant account.

 

Note: Any excess of debits over credits represents capital balance.

  • Posting from Journals

    The amount to be debited is posted as follows:-
    • Enter the date of the transaction on the debit side of the relevant account
    • The title of the account to be credited is preceded by the word ‘To’
    • In Journal Folio (J.F.) column, enter the page number of the journal on which the journal entry has been passed
    • Amount column records the amount mentioned in the journal against the title of the account under consideration
    • For posting of the account to be credited, the above mentioned steps are followed but with one slight difference. Now, the recording is done on the credit side of the accounts, and in the particulars column, the title of the account to be credited is preceded by the word ‘By’.

Example: Let’s take a journal entry and see how the posting is done from journal to ledger. Let’s take an extract from journal book page 18 of Rajath Enterprises: The transaction recorded is - On 17 March 2014 - Purchase goods for ₹2,000/- cash.

 

Date

Particulars

L.F.

Debit ()

Credit ()

March 17

Purchase A/c             Dr.

 

2,000

 

To Cash A/c

(Being goods purchased on cash)

 

 

2,000

 


Posting the above journal in ledger has to be done in two accounts namely Purchase and Cash.

 

  • In Purchase account: First write the date in the date column as recorded in journal book.

    In journal entry above Purchase account is debited, so debit the purchase ledger account by respective amount against the account to be credited in particulars column, here it is Cash account. The title of the account to be credited is preceded by the word ‘To’

    In journal folio column, enter the page number of the journal where the journal entry is passed

Dr.

Purchase Account

Cr.

Date

2014

Particulars

J.F.

Date

Particulars

J.F.

March 17

To Cash A/c

18

2,000

 

 

 

 

  • In cash account: For posting of the account to be credited, the recording is done on the credit side of the accounts by following the same steps. In the particulars column, the title of the account to be debited is preceded by the word ‘By’.

Dr.

Cash Account

Cr.

Date

2014

Particulars

J.F.

Date

Particulars

J.F.

 

 

 

 

Mar. 17

By Purchase A/c

18

2,000

  • Posting of Compound Journal Entries: When in a journal entry, two or more accounts are debited and only one account is credited or vice versa, the entry is termed as compound journal entry. In case of posting of a compound journal entry, posting has to be made in all the accounts whether debited or credited in the entry. For example, if on 10th April cash received from Raj & Co. is ₹14,500. And discount allowed to them is ₹500, the compound entry and the ledger Accounts will be as follows:
     

Journal Entry in the books of Raj & Co.
 

Date

Particulars

L.F.

Debit ()

Credit ()

April 10

Cash A/c                           Dr.

Discount Allowed               Dr.

 

14,500

5,00

 

   To Raj & Co.
(Cash received and discount allowed)
   

15,000

 

 

Dr.

Cash Account

Cr.

Date

Particulars

J.F.

Date

Particulars

J.F.

April 10

To Raj & Co

 

14,500

 

 

 

 

                 

Dr.

Discount Allowed Account

Cr.

Date

Particulars

J.F.

Date

Particulars

J.F.

April 10

To Raj & Co

 

500

 

 

 

 

 

Dr.

Raj & Co.

Cr.

Date

Particulars

J.F.

Date

Particulars

J.F.

 

 

 

 

April 10

April 10

By Cash A/c

By Discount Allowed A/c

 

14,500

5,00





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