3 6: Posting to the General Ledger Business LibreTexts

The general ledger for each period is to be maintained separately to avoid double balancing or mess in the accounts. Transfer in general ledger takes place with the name of the account and amount carried forward in subledger or general journal along with entry details. Other benefits to using the accounting cycle include gaining a better understanding of business operations and improving decision-making abilities. A financial professional will offer guidance based on the information provided and offer a no-obligation call to better understand your situation. Someone on our team will connect you with a financial professional in our network holding the correct designation and expertise.

Why You Can Trust Finance Strategists

Ask a question about your financial situation providing as much detail as possible. Your information is kept secure and not shared unless you specify. Our mission is to empower readers with the most factual and reliable financial information possible to help them make informed decisions for their individual needs. It is worthwhile for transactions of a similar nature to be sorted out and accumulated in one place. Additionally, if an amount is paid to United Traders (thereby reducing the liability to United Traders), an entry is made on the debit side of the United https://www.bookstime.com/ Traders Account.

6: Posting to the General Ledger

The ledger for an account is typically used in practice instead of a T-account but T-accounts are often used for demonstration because they are quicker posting in accounting and sometimes easier to understand. The general ledger is a compilation of the ledgers for each account for a business. Below is an example of what the T-Accounts would look like for a company. In the context of posting, the double-entry system ensures that each transaction is accurately transferred from the journal to the ledger. For instance, when a company makes a sale, the revenue account is credited, and the accounts receivable account is debited.

• Entries relating to a particular account are all collected in that account, and so its position may be known when needed.
• Posting refers to the process of transferring an entry from a journal to a ledger account.
• This process has to be done to every single entry in the general journal.
• For low-volume transaction situations, entries are made directly into the general ledger, so there are no subledgers and therefore no need for posting.
• Any increase in an asset is recorded on the debit side of the relevant account, while any decrease in an asset is recorded on the credit side.
• While each entry in the ledger is different general rules of posting apply in most cases.

Why is Posting Important for Financial Audits?

Let’s see exactly how this transfer of information from the journals to the T-accounts is done. Posting journal entries may sound fairly complicated, but it’s actually simpler than you might think. In this lesson we’ll learn exactly what this entails and go through an example to illustrate how it’s done.

Automation increases efficiency and reduces errors in financial reporting. Posting has been eliminated in some accounting systems, where subledgers are not used. Instead, all information is directly stored in the accounts listed in the fixed assets general ledger.