BUSINESS 

TRANSACTIONS
AND THEIR ANALYSIS
AS APPLIED TO ACCOUNTING
CYCLE OF A
SERVICE BUSINESS

LESSON 7: POSTING TO LEDGER AND TRIAL

BALANCE 
LEDGER

• A grouping of entity's accounts is referred to as a ledger

• A general ledger is the "reference book" of the accounting system and
is used to classify and summarize transactions, and to prepare data for
basic financial statements.
• Each account has its own record in the ledger.
• Compared to journal, a ledger organizes information by account.
The accounts in the general ledger are
classified into two general groups:
1. Balance sheet or permanent accounts (asset, liabilities
and owner's equity)
2. Income statement or temporary accounts (income and
expenses). Temporary or nominal accounts are used to
gather information for a particular accounting period. At
the end of the period, the balances of these accounts are
transferred to a permanent owner's equity account
CHART OF
ACCOUNTS
• A listing of all accounts and
their account numbers in the
ledger.
POSTING

• Posting means transferring the amounts from the journal

to the appropriate accounts in the ledger. 
• Debits in the journal are posted as debits in the ledger,
and credits in the journal as credits in the ledger.
STEPS IN POSTING 
1 2
Transfer the date of the Transfer the page number
transaction from the journal from the journal to the
to the ledger. journal reference (J.R.)
column of the ledger.
3 4
Post the debit figure from the Enter the account number in
journal as debit figure in the the posting reference column
ledger and the credit figure of the journal once the figure
from the journal as a credit has been posted to the ledger.
figure in the ledger.
LEDGER ACCOUNTS AFTER
POSTING 
• Each account balance is determined by footing (adding) all the debits
and credits.
• If the sum of an account's debit is greater than the sum of its credits,
that account has a debit balance.
• If the sum of its credits is greater, that account has a credit balance.
TRIAL BALANCE

• It is a list of all accounts with their

respective debit or credit balances.
• It is prepared to verify the equality of
debits and credits in the ledger at the
end of each accounting period or any
time the postings are updated
PROCEDURES IN PREPARING TRIAL
BALANCE

List Obtain Add Compare

List the account titles in Obtain the account balance Add the debit and credit Compare the totals.
numerical order. of each account from the columns.
ledger and enter the debit
balances in the debit
column and the credit
balances in the credit
column.