St.

Nicolas College BS IN HOSPITALITY MANAGEMENT

of Business and
Technology
ACCTG1-BASIC ACCOUNTING

POSTING ENTRIES

The Bureau of Internal Revenue (BIR) requires all Philippine-registered businesses to maintain records of
every business transaction through books of accounts. In this article, we focus on one of the basic ones in
Accounting: the General Ledger; after all, it is important to familiarize yourself with the nitty-gritty of your
records. Aside from compliance purposes, these documents help determine the financial health of your
business, which is something you should regularly monitor.

Use of the General Ledger in Accounting

When studying accounting, the first lesson always revolves around the double-entry system. Regardless if you
are using the cash or accrual method, every business transaction has a corresponding debit and credit listing.
These are maintained in the General Journal through journal entries.

In the course of running the business, transactions can reach hundreds to even thousands every month,
especially for large corporations. For easier financial statement preparation for Accounting, all these journal
entries are summarized in the General Ledger. This is why it is commonly referred to as the book of final entry.
It contains the total amount of each account for the month. Then, after summing up each account, accountants
use a Trial Balance to make sure that the debit transactions equal all credit transactions.

Filling Out Your General Ledger

Now that you’ve had an overview of how the General Ledger works in Accounting, here’s a step-by-step guide
to filling it out manually for your business.

Step 1: Finalize Journal Entries

Make sure to log all transactions for the month before preparing the General Ledger to prevent going back and
forth your different Accounting books. To maintain accurate records, it pays to set a regular schedule to post
journal entries. This saves you from tedious bookkeeping work every month end. In addition to this, having a
fresh memory of every transaction helps in proper recording, since you still remember the context behind every
receipt and invoice.

Step 2: Post Transactions to Your Ledger

After finalizing your journal entries, it’s time to open your General Ledger. In there, create separate pages for
each account. This means one for each asset, liability, owner’s equity, revenue, and expense account. Feel
free to consult your Chart of Accounts as you prepare these pages.

Once you are done, post each entry from your General Journal in its corresponding ledger page. Here’s a
sample transaction:
 St. Nicolas College BS IN HOSPITALITY MANAGEMENT
of Business and
Technology
ACCTG1-BASIC ACCOUNTING

Let’s say you paid in cash for your electric bill of P10,000 this October. Here’s how you posted this transaction
in your General Journal:

To transfer this Accounting transaction to your General Ledger, simply copy the entry into the appropriate page
for each account:

Step 3: Get the Final Amounts

Decided to continue down the manual route? We got you covered. The last step is to get the final amount for
each ledger account. To do so:

1. Get the total of all debit transactions.

2. Do the same with all credit transactions.
3. Then, subtract the two amounts.

Meanwhile, if you added a balance column similar to the example earlier (Tables 2 and 3), all you need to do is
take the last number as the difference. The difference must be recorded in its appropriate column. When doing
so, take note of which accounts are debit accounts and which are credit accounts.
 St. Nicolas College BS IN HOSPITALITY MANAGEMENT
of Business and
Technology
ACCTG1-BASIC ACCOUNTING

Take Table 4 below for an example. After collating all transactions, the balance of the business’ cash account
for October is ₱38,000. Since Cash is a debit account, this amount goes into the debit column in the Trial
Balance. In a similar manner, if the difference turns out to be negative, then it should go into the credit column.

Step 4: Check and Recheck

Finally, to make sure that every journal entry is accounted for, all these account totals will go into your Trial
Balance. Since we are using the double-entry accounting system, all debits must equal all credit transactions.
After all, every journal entry follows this rule.

However, when doing manual accounting work, errors prove to be quite unavoidable. In cases they don’t
balance out, you will have to check your total amounts, ledger entries, and maybe even go back to your journal
entries. Again, this is where having an automated accounting system does wonders. After all, with less manual
work comes a lesser chance to encounter accounting mishaps.

Recall

To summarize, in Accounting, preparing a General Ledger involves four steps:

Finalizing journal entries;

Posting entries to the ledger;

Getting the account totals; and

Checking and rechecking