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CHAPTER 6: POSTING FROM THE JOURNALS

A ledger is a collection of ALL the accounts kept by a business.

Format of a Ledger Account:

Since a business will have many Ledger Accounts, it makes the accounting system of the firm more efficient if similar accounts can be grouped/classified together. Hence, the ledger can be broken into 2 separate ledgers namely:

General Ledger

Subsidiary Ledger

All impersonal accounts

All personal accounts

Can be sub-divided into: (a) Sales Ledger - containing all the personal accounts of the customers who have bought goods on credit; (b) Purchases Ledger - containing all the personal accounts of the suppliers who have sold stock on credit

Posting is thus the process of transferring journal entries to the ledger accounts. This process involves a very good knowledge of the rules of double-entry system.

Summary:

Totals from the Sales & Purchases Journals are posted at the end of the month

Totals from the Sales Returns & Purchases Return Journals are also posted at the end of the month

Only the totals of the Discount Allowed & Discount Received column of the Cash Book are posted at the end of the month (will be covered in Term III)

Only the affected accounts of the debtors & creditors are posted daily

All the accounts affected in the General Journal are posted daily