POST TRANSACTIONS

General Ledger

The General Ledger, a principal book of accounts which is also called the “book of final entry”,
is the complete collection of all the accounts maintained by a company. The general ledger may
be in loose-leaf form, in a bound volume, or in a computer memory.
The reason for using another book of account to record transactions is in order to classify all the
recorded transactions to each respective account. A bookkeeper cannot depend on the journal
alone to get the number of transactions or the total amount for each account as the journal consists
of many entries for different accounts that are recorded in different time periods.
Each ledger account in the book is identified by an account title and an account number which
are written on top of each ledger to easily locate an account when posting journal entries. Each
ledger is divided into six columns with the following column headings:-
 Date – contains the date of transaction as recorded in the journal.
 Remarks – contains the brief explanation of the transaction (optional for our purposes,
except when there is a beginning balance, then a “Balance” remark should be written).
 Posting Reference (P/R) – contains the journal page in which the transaction was first
recorded.
 Debit – contains the amount of the debit entry.
 Credit – contains the amount of the credit entry.
 Balance* – contains a running balance of the transaction.

Sample Ledger Template

Account Title: Acct No.:

Balance
Date Remarks P/R Debit Credit
Debit Credit

* The Balance column is divided into two (2) sub-columns to differentiate the normal account
balance of a particular account.
Preparing the Ledger GENERAL LEDGER

Acct Title: CASH Acct No.: 101

In preparing the General Ledger, Date Remarks P/R Debit Credit
Balance
Debit Credit
each account ledger should be
identified properly (by each account
title and account number) and Acct Title: ACCOUNTS RECEIVABLE Acct No.:
Balance
105

Date Remarks P/R Debit Credit

arranged according to the manner in Debit Credit

which they are listed in the Chart of

Accounts, i.e., Asset accounts first, Acct Title: SUPPLIES Acct No.: 110
Liabilities accounts second, Equity Date Remarks P/R Debit Credit
Balance
Debit Credit
accounts third, then Revenue
accounts, and lastly, Expense
accounts. Acct Title: OFFICE EQUIPMENT Acct No.:
Balance
120

Date Remarks P/R Debit Credit

Debit Credit

Acct Title: ACCOUNTS PAYABLE Acct No.: 201

Balance
Date Remarks P/R Debit Credit
Debit Credit
Chart of Accounts

Acct # Account Title Acct Title: NOTES PAYABLE Acct No.: 205
Balance
Date Remarks P/R Debit Credit
101 Cash Debit Credit

105 Accounts Receivable

Acct Title: SAM, CAPITAL Acct No.: 301
110 Supplies Date Remarks P/R Debit Credit
Balance
Debit Credit

120 Office Equipment

201 Accounts Payable Acct Title: SAM, DRAWING Acct No.: 302
Balance
Date Remarks P/R Debit Credit
205 Notes Payable Debit Credit

301 Sam, Capital

Acct Title: SERVICE INCOME Acct No.: 401
302 Sam, Drawing Date Remarks P/R Debit Credit
Balance
Debit Credit

401 Service Income

501 Salaries Expense Acct Title: SALARIES EXPENSE Acct No.: 501
Balance
Date Remarks P/R Debit Credit
505 Utilities Expense Debit Credit

Acct Title: UTILITIES EXPENSE Acct No.: 505

Balance
Date Remarks P/R Debit Credit
Debit Credit

Acct Title: Acct No.:

Balance
Date Remarks P/R Debit Credit
Debit Credit
Transferring Journal Entries

Transferring journal entries (also called “Posting to the Ledger”) is the process of transferring
the recorded transactions from the journal to each respective ledger account in a second book
of accounts called the General Ledger (or simply, Ledger).
While the journal records the transactions in their chronological order, the ledger organizes the
information by accounts.
Using the general journal for the purpose of knowing the balance of an account could be very
inconvenient because accounts are not recorded as a group in the journal. Instead, accounts
are scattered randomly all over the pages of a journal and gathering information about a
particular account, one would need to scan all the pages of the journal to achieve this task. For
this purpose, the ledger complements the journal by providing the running balance of a
particular account.
Posting may be done daily, weekly or monthly depending on the needs of a business. The steps
to follow in posting transactions are:-
a) Locate the corresponding account in the ledger.
b) Transfer the following information from the journal to the respective account ledger:-
 Date
 Explanation
 Debit or credit amount
c) In the posting reference (P/R) column of the ledger, write down the page number of the
journal from where the journal entry originated.
d) Calculate the running balance for each transaction.
e) Follow the same procedures for the next entry to be posted.

* The entering of the journal page on the ledger is for the purpose of “cross-referencing – a
method used to enable a bookkeeper or an accountant to trace an entry (in case of an error)
from the journal to the ledger and vice-versa

.
Sample Illustration of Transferring Journal Entries

Page 1
Date
Particulars P/R Debit Credit
20xx
1 Apr 1 Cash 101 2 0 0 0 0 -
2 Sam, Capital 301 2 0 0 0 0 -
3 Initial investment.
4

Acct Title: CASH Acct No.: 101

Balance
Date Remarks P/R Debit Credit
Debit Credit
Apr 1 Investments GJ1 20,000 20,000

Acct Title: SAM, CAPITAL Acct No.: 301

Balance
Date Remarks P/R Debit Credit
Debit Credit
Apr 1 GJ1 20,000 20,000

Page 1
Date
Particulars P/R Debit Credit
20xx
5 3 Supplies 110 9 0 0 0 -
6 Cash 101 9 0 0 0 -
7 Bought supplies in cash.
8

Acct Title: SUPPLIES Acct No.: 110

Balance
Date Remarks P/R Debit Credit
Debit Credit
Apr 3 GJ1 9,000 9,000

Acct Title: CASH Acct No.: 101

Balance
Date Remarks P/R Debit Credit
Debit Credit
Apr 1 Investments GJ1 20,000 20,000
3 Paid supplies GJ1 9,000 11,000