Basic ing- Ledger 5x68l

BASIC ING TOPIC: POSTING TO THE LEDGER T- - simplest form of an used to analyze the effects of the transactions on the s, hence it has two sides: one side is for recording increases and the other side is for recording decreases. At the center of the T is the title of the item. To illustrate:

ing Cycle Phase 1. Recording a. Analyzing b. Journalizing c. Posting- transferring the debits and credits from the journal to the ledger T- vs General Ledger T- Form is used in the classroom for preliminary analysis of transactions. In actual practice, a formal book of s is used containing not only the title, date and amount but also the page reference (to identify the entry source), the number and the balance of the . All s are compiled in one book called the general ledger wherein a separate page is maintained for each . Each page is called a ledger. Ledger vs Journal The journal does not replace the ledger. The journal provides a complete recording of a transaction in chronological order while a ledger shows in one particular all the changes (increases or decreases) that took place. General ledger- book of final entry

POSTING PROCEDURE A. Based on the first debit entry in the journal, look for the in the general ledger. B. On the debit side date column, copy the date. C. Copy the amount in the debit column. D. Insert the journal page number in the folio column or posting reference column of the ledger. E. Insert the ledger number in the folio column or posting reference of the journal. F. Repeat steps A to E for the next . Steps D and E, called cross reference, facilitates the tracing of an entry to and from the journal and leger. Also, if the F columns of the journal and the ledger are both filled up, it signifies that an entry has already been posted. The folio column in the journal will be gradually filled up as the postings are made. LEDGER BALANCES Balances of each in the general ledger should be determined at least at the end of each month. Observe the following rules: 1. Total the debit column and record it in small figures in pencil directly underneath the last debit amount. This is called pencil footing. It is done in pencil and in small figure only to distinguish it from the regular entry and to permit erasures if the figure is not correct. 2. Total the credit column and record it in small pencil figures directly under the last credit amount. 3. Extract the balance: if a debit balance, place it in the explanation column debit side in line with the last debit posting in small pencil figure and if a credit balance, place it in the explanation column credit side in line with the last credit posting 4. You need not pencil foot if there is a single debit or credit amount only. You need not extract the balance nor place it in the explanation column if the postings are on one side only.