Posting Journal Entries to
General Ledger Accounts
Chapter 7
The General Ledger
• Posting – the process of transferring
information from the journal to individual
general ledger accounts
• General Ledger – a permanent record
organized by account number to keep
balances in each account
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Four-Column Ledger Account Form
• In a manual accounting system, information
about specific accounts is recorded in a Ledger
Account Form
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Opening A General Ledger Account
1. Write the account name at the top of the ledger account
form
2. Write the account number on the ledger account form
• This procedure is performed each time a ledger page
is needed for a new account
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Starting a New page for an Existing Account
1. Write the account name at the top of the ledger account
form.
2. Write the account number on the ledger account form.
3. Enter the complete date (year, month, and day) in the Date
column.
4. Write the word Balance in the Description Column.
5. Place a check mark in the Post Reference column to show
the amount entered on this line is not being posted from a
journal.
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6. Enter the balance in the appropriate Balance Column.
When to Post
• Posting can happen any time as dictated by
the business’ policy. It is recommended that
businesses that use a manual system to record
transactions post daily. With an electronic
accounting system, transactions are
automatically posted once they are entered
into the journal.
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The Posting Process
1.
2.
3.
4.
5.
6.
7.
Enter the date of the journal entry in the Date column of the
account debited. (use the date of the journal entry not the date
on which posting was done
The Description column on the ledger account is usually left blank
Enter the location of the journal entry in the Post Reference
column. Ex G1 means General Ledger Page 1
Enter the debit amount in the Debit column of the ledger account
Compute and record the new balance
Return to the journal and add the account number of the account
you just posted to to the Posted Reference column of the journal
Repeat the process for each account listed in the journal
*This is Step 4 of the Accounting Cycle*
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Computing a New Account Balance
• Debits are added to debits
• Credits are added to credits
• If the transaction has both a debit and a credit
they are subtracted and the difference is put
into whichever column started highest.
• For our purposes, there are no negative
account balances
Step by Step
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Showing a Zero Balance in a Ledger
Account
• Draw a line across the center of the column
where the normal balance would appear.
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Journal After
Posting
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Complete General Ledger
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The Trial Balance
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• Proving the ledger – the process of adding all debit
account balances for a debit total and adding all the
credit account balances for a credit total and
comparing the debit and credit totals to make sure
they are the same
• Trial Balance – the formal way of proving the ledger;
it’s a list of all account names and their current
balances
• If a trial balance is “out of balance” there is an error on
the Journal, Ledger, or Trial Balance Sheet and must be
found and corrected on any/all documents affected.
Completed Trial Balance
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Finding Errors
A Trial Balance Sheet that is “in balance” is not necessarily free of errors. It simply
means that debits and credits were posted equally.
Finding Errors
4. Check that you did not leave out
1. Add the debit and credit columns
any accounts. Check to see if any
again
existing account currently have the
2. Find the difference between the
balance of the amount of
debit and credit columns. If the
difference
difference is 10, 100, 1000 and so
5. One of the balances could be
on you probably make and addition
recorded in the wrong column.
error
Divide the difference by 2 and look
3. If the difference is divisible by 9
for a balance of that amount that
then you probably made a
may be in the wrong column (debit
transposition error which means
or credit)
you flipped 2 numbers 29 instead
6. If you have not found the error,
of 92
recompute the balance in ledger
*Slide Errors are when you moved
account
the decimal place while transferring
7. Lastly, check that the amounts in
numbers. Ex 1800 was put in as 180
the general ledger transactions
or 18000.
match those of the journal and that
they are in the correct columns.
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Correcting Errors
• Never erase an error
• Three types of errors
1. Error in journal entry that is not posted
*Draw a line through the error and write the correction
above it
2. Error in posting to the ledger when the journal entry is
correct
*Draw a line through the error and write the correction
above it
3. Error in a journal entry that is posted
*make a Correcting Entry to undo the account that was
wrongly affected and then enter the account that should
have been affected
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Correcting Entries
• On November 15
the accountant
for Roadrunner
found an error in
a journal entry
make on
November 2. A
$100 check to
pay the
electricity bill
was journalized
and posted to
the Maintenance
Expense account
by mistake.
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