Procedure for posting
The process
of transferring the debit and credit items from the journal to the ledger
accounts is called posting. The procedure of posting from journal to ledger is
as follows:
·
Locate the ledger account that is debited in the
journal entry. Open the respective account in the ledger, if already not
opened. Write the name of the account in the top middle. If already opened,
locate the account from the ledger index. Now entries are to be made on the
debit side of the account.
·
Record the date of the transaction in the date column
on the debit side of that account.
·
Record the name of the account credited in the
journal with the prefix ‘To’ in particulars column.
·
Record the amount of the debit in the ‘amount
column’.
·
Locate the ledger account that is credited in the
journal entry. Open the respective account in the ledger, if already not
opened. Write the name of the account in the top middle. If already opened,
locate the account from the ledger index. Now entries are to be made on the
credit side of the account. Record the date of the transaction in the date
column. Record the name of the account debited in the journal entry in the
particulars column with the prefix ‘By’ and write the amount in the amount
column.
Tutorial note
The name of the account in the top never appears in
the particulars column. In the particulars column the account entered is the
other account in the journal entry.
Pass journal entries for the following transactions
and post them in the ledger accounts.
2017
June 1 Basu
started business with cash Rs. 50,000
June 4 Purchased
furniture by paying cash for Rs. 6,000
June 7 Purchased
machinery on credit from Harish Rs. 10,000
June 10 Bought
goods for cash Rs. 4,000
June 18 Paid
insurance premium Rs. 100
Solution
Ledger accounts
In case of existing business enterprises, opening
entry is made at the beginning of the accounting period to bring into account
the balances of accounts which were not closed in the preceding accounting
period. The accounts not closed are capital, liabilities and assets appearing
in the balance sheet of the previous year. The entry passed is as follows:
Assets A/c
(individually) Dr. xxx
To
Liabilities A/c (individually) xxx
To Capital
A/c xxx
While posting the opening entry in the individual
ledgers, the term balance brought down (balance b/d) is used. The steps
involved in posting the opening entry are as follows:
Step 1: The items
debited in the opening entry are entered on the debit side of respective
accounts. The words ‘To Balance b/d’ are written in the particulars
column with respective amounts in the amount column, date being the first day
of the accounting period.
Step 2: The items
credited in the opening entry are entered on the credit side of respective accounts.
The words ‘By Balance b/d’ are written in the particulars column with
respective amounts in the amount column, date being the first day of the
accounting period.
Prepare
necessary ledger accounts in the books of Joy from the following opening entry:
In the books of Joy Journal entries
Solution
Ledger accounts
When a
journal entry has more than one debit or more than one credit or both, it is
called a compound entry. For items debited in the compound entry, entries are
made on the debit side in the respective accounts with the respective amount
debited. For items credited in the compound entry, entries are made on the
credit side in the respective accounts with the respective amount credited.
Posting of such entries to ledger accounts is explained in illustrations 3 and
4.
Journalise
the following transactions and post them to ledger. On May 20, 2018, Ram paid
salaries Rs. 15,000;
Electricity charges Rs. 8,000 and
wages Rs. 2,000.
Ledger accounts
On 15th
March, 2017, Ramesh paid Rs. 13,800 in full settlement of his account Rs. 15,000 due to his
creditor Dinesh. Pass journal entry and prepare ledger accounts.
In the books of Ramesh
Ledger accounts
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